Tabcorp files $687m pokies suit against Victoria; Tatts 2012 profits up 15.9%


tabcorp-lawsuit-victoria-tatts-groupAustralian betting operator Tabcorp unveiled a new identity for its Victorian and New South Wales TAB brands this week. The new logos feature identical type with a different color background – trad green for NSW and heritage blue for Victoria. Tabcorp CEO David Attenborough said the new logo “unifies our brands, reflects our continued innovation and aims to create a closer and more emotional connection with our customers.” Er, no offense, but if that’s what passes for innovation in Australia, we’re getting a better understanding of AC/DC’s approach to lyric writing…

Perhaps we shouldn’t needle Tabcorp too much, lest they hit us with a lawsuit to match the $686.8m doozey they’ve just filed against the state of Victoria. Tabcorp filed a writ with the state Supreme Court on Friday morning seeking a “refund” it claims to be owed after Victoria’s previous government decided in 2008 not to renew the video poker machine (pokies) license Victoria signed with Tabcorp back in 1994. Tabcorp and Tatts Group held a duopoly on some 27,500 pokies in Victoria until last week, when individual pubs and clubs became eligible to assume operation of the machines. Unlike Tatts, which filed its own suit last week seeking $490.5m for Victoria’s failure to award it a new pokies license, Tabcorp is arguing that the 1994 agreement required Victoria to refund the total sum Tabcorp paid in 1994 regardless of whether the contract was renewed or not. (Seriously, if those are indeed the terms Victoria agreed to, we want to bring along Tabcorp’s negotiators the next time we lease a car.) Premier Ted Baillieu said Tabcorp’s action amounted to suing “the people of Victoria” and that his government would “very strongly defend the state’s position and act in the interest of all Victorians.”

Meanwhile, Tatts has reported its fiscal 2012 results, which saw net profits rise 15.9% to $319.1m on earnings of $650.2m. The aforementioned pokies operation was Tatts most profitable, contributing $225.1m (+13%) to earnings. Tatts Lotteries operations grew 15.8% to $202.6m, boosted by the 2010 acquisition of NSW Lotteries, while wagering and betting earnings were also up double digits to $136.3m. Tatts’ UK slot machine and online gaming operation Talarius has seen revenues rise after three years of decline, but increased VAT and unfavorable foreign exchange rates prevented the division from turning a profit. With the Victorian pokies revenue stream now closed, analysts are projecting Tatts’ 2013 fiscal year will produce earnings of $590m and profits of $210m, numbers outgoing CEO Dick McIlwain says “don’t frighten us.” To keep the cash flowing, McIlwain suggested Tatts would bid for South Australian Lotteries. Bottom line, McIlwain says Tatts has “one of the best lotteries businesses you could imagine, and a strong wagering business, so it all looks pretty good going into the future.”