On December 18, shares in Tabcorp, a leading Australian gambling company, soared after the firm secured an exclusive 20-year wagering and betting license in the State of Victoria. The indicative value of the license was set at A$864 million, approximately 578.53 million US dollars. Tabcorp, which has owned the license since 1994, saw its shares jump 24.8% to A$0.918, marking a record intraday surge and making it the biggest gainer on the ASX 200 benchmark.
As part of the agreement, Tabcorp will pay a fee of A$600 million to the Victorian State Government in June the following year and an additional nineteen yearly payments of A$30 million starting from August 16, 2025. Adam Rytenskild, CEO and Managing Director of Tabcorp, hailed the agreement, noting that it puts the company on a level playing field with its competitors in Victoria for the first time.
The bidding war for the license involved local bookmakers, with Sportsbet initially making a higher offer to share the license with Tabcorp. Analysts at Jefferies see the exclusive license as a positive outcome for Tabcorp, projecting an increase in yearly earnings prior to tax (EBIT) and interest of A$132 million. This news eases uncertainties for investors, who were concerned following media reports that Sportsbet had outbid Tabcorp. In addition, the betting and racing giant had entered into an existing contract with the Victorian State Government in 2011.
In other news, Tabcorp announced the appointment of Mark Howell, from Coles Group, as its CFO prior to June 2024. The news of securing the exclusive license has brought much optimism to the company and its investors.