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In a decisive culmination to a prolonged bidding war with Sportsbet, Tabcorp has emerged as the sole victor, clinching the coveted Victorian wagering licence for the next two decades. Having held the licence since 1994, Tabcorp confirmed the success of its bid in a statement to the ASX, revealing a substantial deal valued at over $860 million, marking the end of its existing arrangement set to expire next August.
Adam Rytenskild, the Chief Executive of Tabcorp, expressed the significance of the new licence, deeming it stronger than its predecessor and superior to licences in other jurisdictions. Highlighting the stringent retail exclusivity and a government commitment to maintaining this exclusivity throughout the 20-year term, Rytenskild asserted, "It really is the best licence in the country now.
The financial terms of the deal are equally robust, with an upfront payment of $600 million scheduled for June, followed by $30 million in annual fixed payments from 2025 to 2043. This structure, amounting to a total payment of $1.1 billion, surpasses earlier valuations, including JPMorgan's estimate of between $750 million and $800 million. Notably, the payments are not inflation-linked, anchoring the deal's value at a formidable $864 million.
Rytenskild emphasized that these terms reflect an acknowledgment of the transformative impact of online bookmaking on the wagering landscape. As Tabcorp sets sail into the next year with this substantial victory, the deal not only secures its standing in the industry but also sets a precedent, according to Rytenskild, establishing the standard for retail licences in the future.
Tabcorp's triumph in securing the exclusive Victorian wagering licence for the next two decades marks not only the end of a protracted battle with Sportsbet but also a defining moment for the company and the industry at large. With a deal valued at over $860 million, surpassing earlier estimations, Tabcorp not only solidifies its position in the market but sets a high standard for the future of retail licences.
The resounding success, outlined by Chief Executive Adam Rytenskild, underscores the strength of the new licence, boasting stricter retail exclusivity and a government commitment to maintaining this exclusivity throughout the lengthy term. The financial terms of the deal, including an upfront payment of $600 million and annual fixed payments totaling $1.1 billion, emphasize Tabcorp's commitment to navigating the evolving landscape of wagering, particularly in the wake of transformative changes brought about by online bookmaking.
As Tabcorp charts its course into the future, this victory not only propels the company forward but also establishes a benchmark for what lies ahead in the realm of wagering licences. The deal's recognition of structural shifts in the industry indicates a forward-looking approach, positioning Tabcorp as a trailblazer in navigating the dynamic challenges and opportunities that define the ever-evolving world of wagering.