Victoria to Consider Awarding Three Wagering Licenses

Tabcorp presently enjoys a monopoly on legal gambling in Victoria. The company has an exclusive license for sports betting until 2024 and is currently in the process of trying to renegotiate its license. However, Tabcorp’s monopoly may be coming to an end.

According to recent reports, Victoria’s government is considering allowing non-exclusive deals with multiple operators. If this happens, up to three licenses could be issued for sports wagering in the region, which some operators call advantageous to customers.

Victorian Government Looking at Offering Additional Licenses

According to a report in the Financial Review, Victoria’s government is considering a new approach for its wagering license. Tabcorp holds an exclusive deal in the region until 2024 and is looking to renew. Intralot is also bidding for an exclusive licensing deal. Negotiations are at a standstill, and the government is looking at potentially offering three licenses rather than one.

According to the report, Sportsbet and PointsBet are interested in a non-exclusive licensing deal with Victoria. Both companies are in the process of submitting bids, with both proposals due this past Thursday. Sportsbet is among those advocating for multiple licenses in the region.

In 2019, Sportsbet told the Victorian government that competition creates a better experience for online gamblers. They argued that customers could enjoy similar benefits in retail wagering if a more liberal licensing approach were taken.

Recent Legal Changes May Make Exclusive License More Valuable

The value of the wagering license has been in flux in the last couple of years. Initially, the value of the license was perceived as decreased due to the rise of online wagering. However, that may change due to the push to ban gambling advertising during live sports.

Should a total ban occur, advertising in clubs and retail outlets becomes more valuable. The Financial Review pointed to Italy as a prime example of a market where branding in retail outlets is vital and more valuable.

In 2011, Tabcorp paid $410 million for its exclusive license in Victoria. Estimates for a new two-decade license vary. JP Morgan estimates that a license is worth $750 to $800 million, while Taylor Collison believes the license is worth $600 to $900 million.

Tabcorp Expected to Bid for Both Scenarios

The most favourable outcome for Tabcorp would be to secure an exclusive two-decade deal. Some analysts believe that if an exclusive agreement is reached, it will garner favourable terms for Tabcorp. Intralot is the only other company to be seriously bidding for the exclusive contract, and at this point, they appear only to be interested in an exclusive deal.

Tabcorp is expected to hedge its bets and offer a proposal for both outcomes. If the government decides to go the three license route, Tabcorp will bid to be one of the three licensees. Of course, they could modify their current offer to make it more attractive and eliminate the potential competition.

A Decision Will Not Come Before October

While bids are already submitted, a final decision is still a way away. Ad Astra oversees Victoria’s licensing process and has been working for the last year toward a conclusion. According to sources speaking to AFR, a decision will not be made until October.

Ultimately, it will likely boil down to which proposals will net the government the most money. Tabcorp has a history of paying massive sums of cash to keep its monopoly intact. If the company can continue to do so, they will be the clear favourites. However, we could see the government wanting to go a different direction that could bring more choices and potentially greater protections to punters.