Added: July 31, 2014
The Australian Capital Territory provincial government has sold its ACTTAB betting agency to local bookmaking group Tabcorp Holdings. This was reported in the Australian media. The sale price was said to be A$105.5 million. Local press reports speculated on the reasons of the sale. ACTTAB turnover is more than A$100 million per year. But the profit is not commensurate with this turnover. In the 2012-2013 financial year ACTTAB delivered only A$1 million profit for the provincial government.
Tabcorp Chief Executive Officer David Attenborough reacted to the news, describing the purchase of ACTTAB as a unique opportunity. He said that Tabcorp would leverage its capabilities and provide a better product to the customers of ACTTAB. Tabcorp aims to deliver the best outcome for the racing industry and other stakeholders including its venue and community partners. The long term advantages to Tabcorp from this deal are immense. They include a 50 year exclusive totalisator licence, a sports bookmaking licence for 15 years with further rolling extensions to a total term of 50 years and ongoing approvals to offer Keno and Trackside products.
This was a win-win deal for both parties. ACT Treasurer Andrew Barr said the sale price received had greatly exceeded expectations. He said that in the short run the receipts would be used by the ACT Government to produce a boost to the budget. But Barr said that there are longer term measures also in place. The government will put the proceeds through the Commonwealth’s Asset Recycling Scheme and ultimately invest that in new assets and infrastructure for the Australian Capital Territory.
More than 100 full-time employees work in both the ACTTAB head office and in the 53 retail outlets around the territory. Their future is secure because as part of the deal Tabcorp has agreed to employ all existing staff. Tabcorp has also made other commitments as a part of the deal. The bookmaking group will give A$3 million to the racing industry, A$4 million in sponsorship for sport and A$50,000 to the ACT problem gambling fund. The company will also pay the government an annual licensing fee of A$1 million per year. This means that Tabcorp will have to generate significantly larger profits from ACTTAB than the provincial government has been doing. This is expected to come through low tax liabilities. Tabcorp will pay a tax of 1% of sports bet turnover and no tax on tote betting.
