The starting gun has fired in the contest to secure the $400m-plus racing licence in Victoria, with major industry players including Tabcorp, Sportsbet, Ladbrokes and PointsBet believed to be lining up for the right to run wagering in the state.
Expressions of interest documents for the Victoria wagering and betting licence are now out in the market.
The licence expires in 2024 and is currently up for renewal.
It is currently held by Tabcorp after being issued to the Australian-listed racing group by Victoria Racing for $410m in 2012.
Tabcorp was in a 50-50 joint venture with the Victorian racing industry, comprising Racing Victoria, Harness Racing Victoria and Greyhound Racing Victoria.
Investec is understood to be aiding Victoria Racing with the current negotiations.
First round bids will be due next year.
Major industry players are believed to be In the mix.
PointsBet, chaired by former UBS and Citi banker Brett Paton, is listed in Australia and has a $2.2bn market value, while Ladbrokes Coral is an industry giant based and listed in London and owned by GVC Holdings.
Sportsbet is an Australian online bookmaker licensed in the Northern Territory with more than 1.25 million customers.
After being purchased by Paddy Power in 2010, it is now owned by Flutter Entertainment, which was created through a merger of Paddy Power and Betfair.
The licence offers Tabcorp, an Australian listed gambling giant, the opportunity to conduct on and off course wagering and betting across the industry, along with approved sporting and other events in Victoria.
This is in addition to the right to conduct the simulated racing game Trackside.
While Tabcorp will no doubt be eager to see that the licence remains in its hands, the question is whether multiple non-exclusive licences will be offered by Victoria Racing rather than just one licence, should Tabcorp not pay up to retain its rights to hold the betting licence in the state.
Tabcorp generated $371m in earnings before interest, tax, depreciation and amortisation from its wagering and media division for the 2020 financial year, down 19.5 per cent for the previous corresponding period after being impacted by COVID-19.
It reported at least $1bn worth of writedowns on its wagering, media and gaming services divisions.
The company’s performance has disappointed investors since it carried out its $11bn merger with Tatts in 2017, with some hoping that Tabcorp would improve the performance of the Tatts wagering business and that as a combined entity, earnings would be higher.
Tabcorp is reportedly in the crosshairs of private equity firms, with suggestions that digital betting pioneer Matthew Tripp would run the wagering arm for a privately held fund in a deal that could value the division at $3bn.
There has also been talk that a Hong Kong-based group has shown interest, while Ladbrokes has been keeping a running file on Tabcorp throughout the year.
Ladbrokes was in line to buy Tabcorp’s wagering business when Kohlberg Kravis Roberts made a bid for the business some time ago.
Some market analysts believe Mr Tripp could be making efforts to bring together a consortium to buy Tabcorp.
Victoria is moving to once again monetise its racing licence as the West Australian government has also flagged a sale of its TAB operations, which are expected to be worth more than $300m.
Tabcorp is also expected to compete strongly for that licence.
Advisory firm Investec is also working on that transaction for the West Australian government.
Tabcorp is Australia’s largest wagering group and already operates TABs throughout the country except in Western Australia.
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