Tabcorp resolves Australian Tax Office dispute for AUD$83m refund

Tabcorp Holdings has received an AUD$83m refund from the Australian Tax Office (ATO) after settling a dispute with the government body.

The operator, one of the market leaders in Australian betting and gaming via its TAB sportsbook brand, had been at loggerheads with the ATO regarding income tax treatment of payments for ‘various licences and authorities’.

The $83m refund represents 20% of the disputed tax liabilities and interest, which Tabcorp maintains it has paid in full to the relevant Commissioner.

However, Tabcorp will not receive the full reimbursement, with its share of the refund amounting to $45m after tax, which will be recorded in its next full year financial statement on 30 June 2024.

This is because the company is required to pay $37m to The Lottery Corporation under the terms of the separation agreement between the two. The Lottery Corporation had initially functioned as the Tatts lottery and keno division of Tabcorp, but the latter announced plans for a demerger in March 2022. 

Both companies now trade separately on the ASX exchange, with Tabcorp reporting revenues of $2.43bn (€1.45bn) in its latest financial accounts for the 2022/23 trading year (1 July 2022-30 June 2023).

As part of the resolution with the ATO, Tabcorp has had to agree to new terms regarding treatment of future licensing fees, which it must now regard as ‘being of a capital nature’ – although the firm “does not believe that this will have any material effect on future results”.

It has not been all positive news for Tabcorp recently, however, as the company found itself the subject of the largest fine in the history of the state of Victoria earlier this month for a legacy compliance issue dating back to 2020.