Australian gambling group Tabcorp Holdings Limited announced an agreement to sell its eBet business and revealed details of a new monitoring license in Tasmania.
The eBet Sale Agreement
Australian Securities Exchange (ASX)-listed Tabcorp and Venue Digital Technology Pty Ltd, a company led by Frank Makryllos, entered into an agreement for the sale of the business supplying loyalty and tracking systems to gaming venues in Victoria and New South Wales, eBet, for AU$62 million ($41.5 million) in cash, subject to working capital requirements and other minor closing conditions.
“The transactions announced today allow us to simplify our Gaming Services business as we pivot to an integrity services model,” said managing director and chief executive officer of Tabcorp Adam Rutenskild, outlining the developments as necessary for the “urgent implementation” of the company’s transformation strategy in line with its “bold ambitions to grow” in both Wagering and Media and Gaming Services businesses.
The sale of eBet is expected to be complete by the end of the first half of FY23 and will be subject to obtaining necessary probity approvals and no material adverse change occurring with the business.
In case the agreement is terminated for failure of the buyer to obtain the necessary probity approvals or to complete the sale, Tabcorp will be entitled to receive a break fee of AU$3 million ($2 million), rising to AU$10 million ($6.7 million) in certain circumstances.
The eBet business subject to the sale agreement accounted for AU$4.4 million ($2.9 million) in FY22 EBITDA and an EBIT loss of AU$2 million ($1.34 million) and the sale of the business is projected to result in a pre-tax gain on sale of approximately AU$39 million ($26 million) upon completion.
“The potential sale of eBet was disclosed at the release of our FY22 results and we are pleased to have entered into the agreement swiftly and in line with our new strategic direction,” Rutenskild concluded.
The Tasmanian Monitoring License
In the same ASX filing, Tabcorp confirmed details of a new Tasmanian Monitoring Operator Licence awarded to Max Regulatory Services (MRS) to allow it to monitor electronic gaming machines (EGMs) in hotels and licensed clubs in Tasmania.
For the 20-year license commencing from July 1, 2023, MRS will pay an upfront license fee of AU$2 million ($1.34 million) to the Tasmanian government, as well as an AU$1 million ($669,000) grant to the Community Support Fund.
The award of the license in Tasmania is in line with the opportunity for the business to benefit from the government’s shift towards an independent third-party monitoring mode.