Peter V’landys looms as the kingmaker in any Tabcorp deal

Peter V'Landys. Picture: Jonathan Ng

Racing NSW boss Peter V’landys has a succinct response when asked by The Australian about Tabcorp’s wagering business now being a takeover target: “I’ve set up a bank account in anticipation.”

V’Landys is not being flippant and his status as the most powerful person in horse racing – and potentially all of sport given he is also the NRL chairman – is important.

In short, he looms as a kingmaker in any deal for Tabcorp and suitors better start knocking on the door of his Druitt Street offices in the Sydney CBD.

Entain, the owner of the Ladbrokes and Neds brands in Australia, has emerged as a suitor and there is also private equity interest.

So there is no doubt Tabcorp’s wagering business is in play, but there is devil in the detail in any corporate action that could take place. Namely, why Tabcorp finds itself in this position in the first place and the significant hurdles any suitor would need to overcome – which is where V’landys comes in.

Firstly, Tabcorp’s lotteries business – which it got in its $11bn merger with Tatts Group in 2017 – has performed brilliantly and shareholders love it.

But the company’s wagering arm (and the media arm which is built around the Sky Racing channel) keeps losing market share to digitally-focused corporate bookmakers rivals like Sportsbet, Ladbrokes Bet365 and now even the US-centric market darling Pointsbet.

Yes, Tabcorp was hit hard by the closure of pubs and TAB outlets during the COVID-19 but the fact is more punters want to bet on racing and sport on their mobile phones and the corporate bookies are better at it.

Yet the TAB brand is significant and put a renowned operator like Matthew Tripp, a digital betting pioneer, in charge and the turnaround of that business would well and truly be on.

Tabcorp also has important long-term monopoly retail wagering deals in place in NSW, Queensland, the ACT and elsewhere, and is the incumbent licence holder in Victoria. The deal gives some long-term revenue certainly, even if digital wagering is growing.

But that is where the regulatory hurdles come in. Nothing is insurmountable with some dollops of money, but a change of control of Tabcorp for example and the 99-year wagering licence in NSW is voided. There is also the need to get legislation changed in NSW given a cap on Tabcorp’s shareholders that does not allow more than 10% to be in one hand.

So a suitor would need to talk to governments and it would need to strike deals with racing authorities for any deal to eventuate.

That is why the likes of Victorian and NSW racing authorities crucial. Win them over and the bidders could be on their way.

And therefore V’Landys sniffs an opportunity. He has significant influence in the corridors of political and sporting power. He already famously got a $235m government funding package for equine influenza, $100m from a High Court win over the bookies, $70m in tax parity from the state among his many wins over the past 15 years.

Suddenly there’s potential for him to do another deal for NSW racing in a Tabcorp break-up. No wonder the bank account has been opened.