Tabcorp believes UBET was entitled to withhold an alleged $11m in fees from RQ last year.
Betting giant Tabcorp believes its subsidiary UBET was entitled to withhold an alleged $11 million in fees from Racing Queensland last year as an offset to the state’s new wagering tax.
Tabcorp, which was served with a damages claim from the administrator in June, said details revealed in the Supreme Court of Queensland on Wednesday confirmed RQ was seeking compensation for an alleged underpayment by UBET.
The claim relates to the extent to which Queensland’s new point of consumption tax is borne by UBET or RQ, and impacts fees calculated under two contractual arrangements.
Tabcorp said it was preparing a formal defence but maintains it will “defend the charges vigorously”.
The gambling company says previously redacted court documents show RQ is alleging an $11 million underpayment by UBET between the introduction of the tax in October, through to December.
The claim is then extended across the potential impact across the 25-year term of the deed between the two parties, Tabcorp said in its release to the ASX.
Tabcorp said UBET disagreed with how the fees were calculated and believed it was entitled to be “made whole” for the impact of the tax for the duration of the agreement.
Tabcorp also said RQ is also seeking repayment from UBET for reduced top-up fees between 2018 and 2020 – an offset introduced to help UBET account for the impact of the tax.
The company said it believed no such repayment was required under its deed of understanding with RQ, as the claim would mean UBET “bears the full wagering tax increase in that period”.
Tabcorp shares slipped 0.11 per cent to $4.605 at 1143 AEST on Wednesday, but have still gained 7.23 per cent so far in 2019.