According to reports, Tabcorp is currently in an advantageous position to retain its exclusive betting licence in Victoria, potentially at a company-friendly price, as more doubts regarding the bidding process have emerged because of some uncertainty in terms of customer data ownership. At the same time, the racing industry in Victoria is getting increasingly concerned that a low Tabcorp offer would cast a shadow on the joint venture with the licence holder.
The state government of Victoria has received preliminary interest from a number of potential bidders for the operating permit, including Entain, Sportsbet, Tabcorp and Betr. Local officials, however, are getting more and more concerned about accessing customer data.
With access to a vast customer database, which Tabcorp claims it currently owns, the company has a major advantage and its competitors are getting more unlikely to join in a competitive bidding process and take over the operating permit from Tabcorp, investing hundreds of millions of dollars and starting a retail gambling business in Victoria from the very start.
As already revealed, Tabcorp could pay approximately AU$500 million to retain the exclusive betting rights in the state of Victoria. This amount, however, is not considered sufficient by the local authorities, considering the fact that the joint venture between Victorian racing and the company generates between AU$220 million and AU$250 million worth of EBITDA (earnings before interest, tax, depreciation and amortisation). According to some estimates, the intrinsic value of the joint venture could be between AU$1.5 billion and AU$2 billion.
Customer Data Issues Emerge as the Apple of Discord During the Betting Rights Bidding Process
The joint venture between the state of Victoria and Tabcorp is set to expire in August 2024. In return for the right to exclusively operate land-based sports betting outlets and TABs in local clubs and pubs, the Australian gambling operator paid AU$410 million in 2011.
Previously, some local Government officials have shared hopes for strong competition for the operating permit, with most gambling companies having already revealed they were interested in taking part in the bidding process. However, reports say that Tabcorp’s rivals have been vigorously protesting about the aforementioned customer data issues, with many of them sharing that they see almost no point in bidding for the licence without having any access to customer information originating from the current joint venture.
According to experts cited by The Australian, the controversy regarding the interpretation of the existing joint venture contract and customer data ownership could result in litigation in case the already delayed bidding process is once again impeded. It is still possible for interested companies to make a move for the licence and file a submission, although they are a bit overdue, considering that the already existing deal between Tabcorp and the state of Victoria is set to expire in August 2024. The local gambling operator – the Victorian Gambling and Casino Control Commission (VGCCC) – unveiled the competition for a project manager role for the bidding process only last week. The application process is set to close in a few days, on February 20th.
In its turn, the lack of a competitive process for the licence could increase the pressure on funding to Victorian racing, which has been locked in a lengthy battle with counterparts from New South Wales (NSW).
- Author
Daniel Williams
