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In a bid to boost its moribund fortunes and beat-off circling Great White sharks, Tabcorp, Australia’s premier gambling company, has decided that less is more and voted to de-merge its principal lottery and totalizator verticals.
Tabcorp shareholders have overwhelmingly approved the move, which is expected to receive the legal stamp of approval from the New South Wales courts this Friday, May 20.
The Ozzie thoroughbred, which can trace its gaming origins back to the country’s regularization of betting on horse racing in 1881, will continue to run its totalizator operations–essentially sports wagering, media and gaming services–under a “New Tabcorp” brand; while demerging its lotto and keno vertical, to be rebranded as “The Lottery Corporation”.
With impending legal approval, The Lottery Corporation should be able to begin trading on the Australian ASX stock market on May 24.
“This is an important milestone in repositioning the group’s portfolio and setting up Tabcorp and The Lottery Corporation for future success,” said Tabcorp Chair Steven Greggs.
Tabcorp–which recorded revenue of AUS$5.68 billion (£3.21bn/US$3.93bn/€3.77bn) in its last full financial year, ending June 30, 2021–launched a major review into possible restructuring at the start of last year.
A shiver of Great White sharks–among them Apollo Global Management, Betmakers and Entain–were circling the Ozzie whale at the time, posting several aggressive individual bids to acquire the operator for up to AUS$4 billion (£2.26bn/US$2.77bn/€2.65bn).
These offers were rejected out of hand for massively undervaluing the company, but Tabcorp leaders realised that change was a given necessity.
The Lottery Corporation is now poised to pursue growth through a cluster of new strategies, encompassing enhanced digital penetration and games innovation.
Meantime, in further positive news, it’s reported that New South Wales racing boss Peter V’landys has settled a potentially disruptive AUS$11 billion lawsuit (£6.22bn/US$7.62bn/€7.3bn) with Tabcorp that could have torpedoed the demerger.
In March, V’landys asserted the Tabcorp super-shift would be a “financial disaster” for the racing industry.
But last week he revealed: “We have come to an arrangement where we are supporting the demerger because now we have a buffer against the exposure of any losses to the NSW Racing industry.”
It’s believed that New Tabcorp has agreed to pay NSW Racing some AUS$10 million a year (£5.65m/US$6.93m/€6.64m) to cover possible financial losses far into the future.
Indubitably, Tabcorp’s racing days are far from over.