ACT News

Government green lights ACTTAB sale to Tabcorp

The competition watchdog won't block betting giant Tabcorp's $105 million purchase of ACTTAB from the ACT Government. 

The Australian Competition and Consumer Commission  will not oppose Tabcorp Group's proposed acquisition of the underperforming betting agency which has 53 outlets in the ACT.

Tabcorp's purchase of ACTTAB for $105 million has been approved by the ACCC.
Tabcorp's purchase of ACTTAB for $105 million has been approved by the ACCC. 

The company already owns former government TABs in New South Wales and Victoria.

In July the ACT government announced its long planned sale of ACTTAB as part of a 50-year deal with Tabcorp, prompting an ACCC review to consider whether punters could receive less favourable odds, increased commission fees or otherwise degraded betting products.

Other regulatory and licensing approvals are still required for the deal but ACCC Commissioner Jill Walker said it could go ahead as Tabcorp would continue to face strong competition from other industry players. 

"The ACCC considered that ACTTAB has not been a vigorous competitor in wagering markets and the proposed acquisition would only result in a marginal increase in market concentration," Dr Walker said.

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The review found that while Tabcorp and ACTTAB both offer telephone and online betting for punters around Australia, there was limited direct competitive overlap in Canberra retail outlets.

Both companies have exclusive licences to supply off-course betting services in their original locations, ACTTAB in the ACT and Tabcorp in Victoria and NSW.

Dr Walker said the sale would not have a material impact on the national supply of industry pooling services in Australia.

"The ACCC determined that Tabcorp would continue to be competitively constrained by the corporate bookmakers and other state-based operators." 

On Friday, ACT Auditor-General Maxine Cooper launched a review into the conduct of government agencies involved in the sale process

Dr Cooper's report, due to be released by the end of the year, will consider the conduct of the sale, including government planning, administration and communication processes. 

It will also assess whether there was appropriate consideration of bids and tenders received from potential buyers, including against agreed sale criteria and legislative, policy and financial requirements and considerations.

Industry and racing figures criticised the sale process, including one who labelled it "a sham process" as all but three companies were excluded from bidding. 

Tabcorp will have 50 years as the exclusive owner of the ACT totalisator licence and receive a sports bookmaking licence for 15 years with a 50-year extension.

It will receive ownership rights over Keno and Trackside betting for the 50 years and will pay tax of 1 per cent of sports bet turnover and no tax on tote betting. 

Tabcorp will also pay an annual licence fee to the government of $1 million, indexed for CPI.

Just 20 of ACTTAB's outlets will continue to operate, including shopfronts and facilities at pubs and clubs. 

Tabcorp agreed to keep about 130 staff on existing conditions for three months after the sale and offered sponsorship for the local racing industry of at least $300,000 a year for 10 years.

ACT Chief Minister Katy Gallagher welcomed the ACCC decision and said the sale price had exceeded the government's expectations. 

"I was quite pleased to see there will be a performance review into the sale of ACTTAB," Ms Gallagher said.

"This is all about maintaining community confidence and trust in our processes and certainly from the very first stages of the decision to sell ACTTAB I was very clear about the probity guidelines I wanted in place." 

Ms Gallagher said she did not believe industry criticism of the sale process was valid and that she had excluded herself from any meetings or discussions with possible buyers.