Tabcorp wanted to extend Victorian licence for 30 years, confidential documents show

Under the name of Project Midnight, the wagering company sought significant concessions in the state. The Andrews government is considering issuing multiple betting deals.

The Victorian licence has become less lucrative as online bookmakers make inroads against the monopoly operator Tabcorp. Picture: David Caird

Tabcorp confidentially proposed a three decade extension to its exclusive Victorian wagering agreement, and a “positive obligation” from the government to “have the licence remain competitive”.

The proposal was submitted to the Victorian Justice Department on July 23 – two months after expressions of interest were due.

The details of Tabcorp’s bid to keep control of the lucrative contract, and to ensure that it would not face higher gaming taxes, are contained in internal documents obtained by The Australian.

Dated August 2 and marked “strictly private and confidential … not for distribution”, the documents were prepared as part of Tabcorp’s Project Midnight, its efforts to renegotiate wagering licences across multiple states.

It notes “political engagement strategies” were focused on Western Australia and Queensland.

Tabcorp holds the exclusive rights to offer retail betting and is given special rights to promote its products at racecourses. While this gives the company a de facto monopoly on offcourse betting, the rise of international corporate bookmakers – who allow customers to bet using a mobile phone app – has eroded its advantage.

The company won a 12 year licence in Victoria in 2012, paying an upfront premium of $410m.

The state had asked for proposals for a new licence starting in 2024, but in April abruptly pulled the process. Sources said the government was unhappy with all the proposals made, including the bid from Tabcorp.

An update in the Project Midnight documents notes of the Victorian expressions of interest: “30 yr term … need positive obligation the Government to maintain relationship … and have the licence remain competitive”.

“Would want a ‘hand back’ licence or seek compensation &/or clawback of upfront premium payment if we’re put in uncompetitive position – eg from the onerous nature of VIC reg approval process, (point of consumption tax) increases etc,” it notes.

But new documents circulated by the Victorian government to interested parties shows it is considering issuing not one exclusive licence in the state after 2024, but up to three for 10 or 20 years.

“The Department is exploring a number of alternatives to the current licence model prescribed by the Act,” the new expressions of interest documents distributed last week read. The new expressions of interest process will end in August, and in February successful respondents will be given the opportunity to make a formal bid. Ladbrokes, owned by corporate bookmaker Entain, is likely to make a submission.

Tabcorp – which demerged its lucrative lotteries and Keno business into The Lotteries Corporation in May – was successfully in seeking to broaden the POCT in Queensland. That change, announced this month, means the corporate bookmakers pay more tax. Tabcorp stands to benefit by about $30m annually, according to analyst estimates. It is also pushing for changes in NSW, where the government will in this week’s budget increase the POCT, a move opposed by the bookmakers and their lobby, Responsible Wagering Australia.

Tabcorp has also embarked on a public campaign with the Australian Hotels Association, Community Clubs Victoria and Clubs NSW to increase the consumption taxes paid by the corporate bookmakers. Tabcorp argues that it is paying double the fees and taxes, which is also making pubs and clubs less competitive compared with wagering using apps.

A Tabcorp spokesman said the company had “submitted an EOI in May last year in compliance with the Victorian government’s timeline”. “The Victorian government requested further information and Tabcorp complied with that request,” he said.

“The new licence needs to be good for racing, good for pubs and clubs, good for the state, and good for punters by levelling the playing field. Currently Tabcorp pays higher wagering taxes and fees than online operators which disadvantages not only Tabcorp but local pubs and clubs.

“We would like all wagering operators to pay the same wagering taxes and fees – that’s fair.”

Earlier this month, RWA accused Tabcorp of turning to “sneaky backroom deals” in a bid to stop competition. “They aren’t interested in ‘fair play,’ only deals that entrench their monopolies,” the group said. “What Tabcorp really wants is to strengthen its commercial monopoly without paying a premium.”