BUSINESS

Tabcorp Q1 revenue up; appeal court overturns Sportsbet’s Betbox judgment

TAGs: Australia, Betbox, Sportsbet, Tabcorp, Victoria

tabcorp-sportsbet-betbox-australiaAustralian betting outfit Tabcorp saw revenue from continuing operations rise 2.9% to $488.9m (US $508m) in the three months ending Sept. 30 (Tabcorp’s fiscal Q1 2013). The rise came despite a 2.4% fall in wagering revenue to $384.6m. That drop came courtesy of Tabcorp’s new betting license in the state of Victoria – since Aug. 15, profits from horseracing are now split 50:50 with the Victorian racing industry, compared to Tabcorp’s former 75% share. (If the old arrangement had been in place, Tabcorp’s wagering revenue would have risen $20m instead of falling $10m.) Fixed-odds betting was up 30.3% to $94.7m while TAB racing game Trackside rose 8.7%.

Keno revenue rose 17.7% to $53.9m on the strength of a new license in Victoria and continued strong performance in New South Wales and Queensland. Luxbet, Tabcorp’s Northern Territory online and telephone betting outfit, recorded a 52.8% rise to $8.1m. Tabcorp’s racing broadcasting business was up 6.2% to $49.5m. Tabcorp Gaming Solution, which helps clubs, pubs and hotels manage their pokie operations, brought in $13.1m. Not included in Tabcorp’s continuing operations revenue is the $130.2m generated by the discontinued Tabaret division, which saw revenues slump by 54.2% following the loss of the valuable Victorian pokies concession on August 15. A little more than a week after losing the pokies duopoly it formerly held with Tatts Group, Tabcorp filed a $687m suit against Victoria for compensation.

TABCORP AND VICTORIA BEAT BACK BETBOX
Tabcorp and Victoria may be duking it out in one court, but they were fighting side-by-side in another. Late last week, a federal appeal court overturned an August 2011 Federal Court judgment that allowed betting operator Sportsbet to install and operate internet-connected Betbox betting kiosks in Victoria pubs and other retail spaces. Sportsbet, which held a gaming license in Australia’s Northern Territory, had successfully challenged Victoria’s assertion that the kiosks qualified as a ‘retail’ betting outlet, since the machines neither accepted nor paid out money, but merely allowed punters to place wagers via online accounts they’d already established with Sportsbet. Both Victoria and Tabcorp – which held what it believed to be an exclusive off-course wagering license in Victoria – filed an appeal of that judgment in February.

In overturning the Federal Court decision, the appeal court determined that by installing a Betbox in a hotel, Sportsbet had effectively established a physical presence in Victoria and was conducting off-course wagering in a state in which it was not licensed to do so. Sportsbet failed to prove that Victoria’s laws were discriminatory in a protectionist sense, rather than merely the kind that has a negative effect on Sportsbet’s bottom line. Not being subject to the restrictions that came with Tabcorp’s exclusive license gave Sportsbet an unfair competitive advantage in Victoria. Removing the exclusivity of Tabcorp’s license, while still requiring it to kick back a healthy chunk of change to Victorian racing – something Sportsbet wasn’t compelled to do – would result in market distortion. As a result of the judgment, Sportsbet was ordered to pay the costs of Victoria’s and Tabcorp’s appeals, although Sportsbet can still ask the court to overturn this most recent ruling, so this could go into extra innings.

One final point of interest: the preface to the appeal court judgment reads like excerpts from a speech by the American Gaming Association or the European Gaming and Betting Association, each of which love to complain about the nightmares of the US turning into a “patchwork quilt” of individual state gaming legislation, or the “27 mini-markets” currently complicating matters in Europe. The Aussie judges said it is “a blight on our nationhood and a travesty of sensible administration and good government that there are eight different regulatory regimes concerning gambling in Australia, with an overlay of federal intervention, both actual and threatened.” Truly, it’s a small world after all…

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