Firms set to compete for Australian gaming opportunities
Posted by Gavin Smith on 28 May 2009 at 10:05
An international scrap looks likely to break out as gaming companies bid to buy lotteries, wagering licences, and betting agencies being sold by Australian regional governments.
The Financial Times reports New South Wales, Tasmania and Victoria are offering the deals, which could provide an opportunity for overseas firms to gain ground in the Australian market.
The paper says Tab Corp, an Australian gaming operator, has found Australians spend more per capita of their entertainment money on gaming than any other nationality, from horses to casinos.
The Financial Times also said the sales will provide a welcome boost for state governments battling falling tax revenues and a struggling Australian economy.
New South Wales alone is looking to splash AUS $57 billion on a capital expenditure programme over four years, but faces a drop in the amount of tax it gets from the federal government over the same timespan.
Among interests up for sale is Tote Tasmania, valued at AUS $500m by some analysts, and possibly in new hands later in the summer.
Companies interested so far include Ladbrokes, Betfair Australia, Tabcorp and Tatts, the Financial Times adds.
Also among deals on the table is a 30-year licence to run New South Wales Lotteries, worth about AUS $600 million and going up for sale later this year.
Interest in this deal is again high, with the paper saying the same players interested in the Tote Tasmania are likely to contest the auction along with the US-based lottery unit of Italy’s Lottomatica.
Victoria's state government has decided to end an exclusive deal on a wagering licence it had with Tabcorp, and a licence effective from 2012 will be up for grabs.
According to the Financial Times report, rivalry could already be developing "between the state governments over the auctions", with an unnamed source quoted as saying: "Tote Tasmania is a fast-growing business and turnover [bets taken] is expected to rise by 70 or 80 per cent next year. It's very cash generative and attracting a lot of business from Asia."
Goldman Sachs JB Were is advising the government of New South Wales on the lotteries sale, while Deloitte is acting for Tasmania on the Tote Tasmania sale.
