Victorian betting license may not stay with Tabcorp if non-exclusive deal is approved

June 15, 2023 2:28 am.by Kevin Pitstock

The quest for a new Victorian wagering licence holder, which has been a long-standing issue for the Victorian government, could be nearing its end with the prospect of a non-exclusive retail licensing arrangement becoming increasing likely.

It appears there’s potential for a departure from the traditional exclusive arrangement, with several gambling operators potentially sharing the licence.

The incumbent retail license holder, Tabcorp, however, continues to advocate for exclusivity, especially within the domain of pubs and clubs, for the upcoming two decades.

Previously, only two parties, Tabcorp and Athens-based Intralot, exhibited interest in bidding for the highly sought-after, exclusive Victorian wagering licence.

However, recent developments have suggested that the Victorian government might be considering awarding up to three separate licences within the state.

This alternative approach has drawn attention from two additional operators seeking a more affordable entry into the market.

Industry insiders have revealed that Sportsbet, a subsidiary of London-listed Flutter Entertainment, and local bookmaker PointsBet, are showing interest in this non-exclusive, more affordable licence.

Both operators are anticipated to submit their bids by today’s Thursday deadline.

Entain, the parent company of Australian bookmakers Ladbrokes and Neds, recently withdrew from the process publicly.

The firm expressed concerns over the clarity of its potential access to a customer database, meticulously built up by Tabcorp over the years.

Some industry insiders speculate that this might be a strategic move to diminish competitive tension and possibly attempt a second takeover of Tabcorp.

However; insiders close to Entain insist that the withdrawal is due to the flawed process, and there are no active discussions currently.

Any potential acquisition would be contingent on changes to NSW legislation, which currently restricts any entity from owning more than 10% of Tabcorp.

It’s worth noting that the Victorian wagering licence was previously considered an extremely valuable asset.

This is because it granted the holder the exclusive rights to sell specific products and manage betting in shops and pubs in one of the country’s largest wagering markets.

However, with the advent of online betting, the value of these physical outlets has decreased as fewer punters frequent TAB outlets and pubs to place bets, with most preferring mobile sports betting apps.

On the flip side, the looming threat of a blanket ban on gambling advertising during live sports broadcasts is expected to increase the value of the wagering licence.

In markets such as Italy, where advertising of gambling is banned, the physical branding in retail stores, pubs, and clubs becomes significantly more valuable.

Tabcorp, which paid a $410 million upfront payment in 2011 for the licence, despite holding it since 1994, was the last entity awarded the licence. T

he firm retains the exclusive rights to sell specific products and operate betting in shops and pubs.

While maintaining this exclusivity is desirable, Tabcorp is anticipated to oppose bids for a scenario where the licence is shared.

Most brokers expect the ASX-listed group to secure favorable terms overall, should it secure an exclusive licence.

Intralot, headquartered in Athens and operating lotteries worldwide, is the only other operator expected to bid for licence exclusivity.

The firm, a significant player in Victoria until 2014, exited its Keno and scratchies businesses and later took legal action against the state, alleging that it was misled and prohibited from competing with the largest operator in Victoria, Tattersall’s.

Sportsbet has a history of advocating for multiple licences, having communicated to the Victorian government in 2019 that competition in online betting had created a “better overall experience” for customers.

The firm suggested that the same benefits could be extended to retail wagering customers if there were a liberalisation in the retail licence structure.

However Sportsbet, who terminated all affiliate agreements in April 2022, and churned that saved money in to Tik Tok and social media advertising; have been the most visible and aggressive gambling advertising offenders, which has prompted the calls for the looming strict gambling advertising bans.

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