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Tabcorp on the fence about UK lotteries

Thu, Jan 30, 8:15am by William Brown

Australian gambling giant Tabcorp is disinclined to launch a bid to become the next operator for the United Kingdom’s national lottery, ahead of the bidding process kicking off this year.

The Sydney Morning Herald reports that the British Gambling Commission appointed investment bank Rothschild to engage with potential bidders interested in taking over the licence to run the national lottery when it expires in 2023.

Interested companies had been given until January 22 to respond to a consultation ahead of the start of the tender process.

Sources familiar with the matter on Tuesday indicated Tabcorp was “unlikely to participate” and was more focused on priorities in Australia.

One domestic priority for Tabcorp is the Western Australian TAB, gaming analysts said, after the WA government launched a process to privatise it in September.

Tabcorp is considered the most logical contender for the licence, but will face competition from foreign-owned online wagering companies operating in Australia.

Morgan Stanley analyst Elise Kennedy said a successful purchase of the WA TAB by Tabcorp seemed plausible, “as it is the only reported bidder with an existing retail footprint in Australia, and it stands to have the most financial benefit.”

ASX-listed Tabcorp recently merged with Tatts Group to become the nation’s largest gambling company, holding licences for lotteries and retail betting in every state and territory except Western Australia.

But Ms Kennedy warned the upside of acquiring the WA TAB may be limited and could “stretch Tabcorp’s balance sheet depending on the price paid and how a purchase was financed.”

Tabcorp’s first foray into the crowded United Kingdom market in 2016 – launching online betting service Sun Bets was a joint venture with Rupert Murdoch’s The Sun newspaper – ended less than two years later when Tabcorp decided to exit.

Although Tabcorp paid $71 million to Mr Murdoch’s News Corp to leave the loss-making business, Tabcorp chief executive David Attenborough said the negative Sun Bets experience would “in no way” deter the company from considering other overseas moves.

“International businesses aren’t wrong,” Mr Attenborough said in 2018.

“The Sun Bets business is not making the money that it needs to.”

As well as overseas lottery licences, Tabcorp has been eyeing possible moves into the United States after a recent Supreme Court ruling cleared the way for the opening of hugely lucrative new wagering markets.

Some estimates suggest American punters placed up to US$195 billion a year on underground sports betting nationally.

Several state jurisdictions, including New York, New Jersey, Delaware, Oregon and Rhode Island, have already moved to permit wagering to varying degrees since the court’s decision.

In the United Kingdom, parties in the running for the licence to run the national lottery for the next seven to 10 years, include Canada’s Camelot, which has operated the lottery since its inception in 1994, British billionaire Sir Richard Bransom and Novamedia, which runs the People’s Postcode Lottery.

In response to questions about the United Kingdom’s national lottery, a Tabcorp spokesman on Tuesday said the company did not comment on licencing or merger and acquisition processes.

TAB to use facial recognition in its stores

Australia’s biggest bookmaker is set to roll out nationwide software to prevent underage gamblers using their outlets.

Just Horse Racing reported in December that Tabcorp will use artificial intelligence-powered video cameras in their outlets after trialling them in Melbourne during the past three months.

Satisfied with the results, Tabcorp are set to install the cameras in more than 400 TAB outlets across Australia, in what they say is a prevention method for underage gambling in their stores.

TAB outlets currently have no method of preventing underage gamblers betting with cash on the electronic betting terminals, which has prompted this move, however it could also be used to alert TAB workers to restricted punters.

The cameras work by identifying persons walking into the TAB stores and if that person looks to be under the age of 25, a worker in the store would be alerted so they can approach them and identify their age.

Many punters on social media believe it has nothing to do with underage gamblers, but instead profiling punters, so they can stop betting syndicates and notable winners betting with cash who would otherwise be restricted on their online products.

The TAB app already uses facial recognition to allow punters to login to their accounts without a password.

It is unknown how much data is stored, but the TAB could already have a large database of punters profiled.


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