SBC News Tabcorp secures approval to spin-off Tatts lottery business

Tabcorp secures approval to spin-off Tatts lottery business

Directors of the Australian lottery, gaming and wagering corporation Tabcorp have ‘unanimously recommended’ that shareholders vote in favour of the proposals to demerge its Tatts lottery and keno operations from its gaming and wagering business.

Publishing its ‘Demerger of The Lottery Corporation – Briefing Presentation’, the firm detailed the proposed new business structure which would see Tabcorp separate into two ASX-listed entities, named The Lottery Corporation and New Tabcorp.

Introducing what it labelled as the ‘next phase’ in Tabcorp’s evolution, the board of directors noted that creating two separate companies would be beneficial to shareholders, given that it would create two ‘focused executive leadership teams’ and afford both businesses to create a tunnel-visioned outlook on the profile of both entities.

It laid out its vision for the new lottery business, explaining that, despite the demerger, it would create ‘Australia’s leading lottery and Keno operator with a portfolio of exclusive and/or long-dated licences’ including a 20-year contract in Victoria.

Meanwhile, the demerged lottery and keno business would be an omnichannel business with an emphasis on ‘strong digital growth’. Currently, it offers a strong omnichannel experience with Keno distributed in 3,409 venues and digitally, with strong growth in digital uptake experienced in FY20-22.

The 3,863 lottery retail venues and a digital platform ensure that the company will have a 7000+ strong retail presence whilst maintaining fast digital growth.

Under the proposals, The Lottery Corporation would have posted revenues of $3.21bn in FY2021, and an EBITDA of $611m, selling around 600m tickets to 8.3m customers throughout the year.

The Lottery Corporation would seek growth by embarking on a multi-pronged approach, including innovating its game portfolio; enhancing the customer experience; increasing its digital presence as part of its omnichannel strategy; evolving its retail footprint and pursuing new license and acquisition opportunities.

Potential disadvantages were also spelled out to shareholders, including the reduction in size and diversification of existing Tabcorp and that the two new businesses would not possess the same credit profile as the existing business.

Unveiling The Lottery Corporation’s board and executive leadership team, Tabcorp has placed Sue van der Merwe as its lottery lead, serving as Managing Director and CEO of the newly formed firm. Steven Gregg will act as an independent Chairman with non-executive duties, whilst Adam NewmanPatrick McGlinchey and Antony Moore join the ELT as Chief Financial Officer, Chief Legal and Risk Officer and Chief Channel Officer respectively.

Moving forward, Tabcorp outlined the plan for the demerger. It will hold a Demerger General Meeting and Scheme Meeting on May 12 before listing The Lottery Corporation on May 24.

Finally, should shareholder approval be received, the demerger will be effective from June 1 and The Lottery Corporation shares will be available for trade from June 2.

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