TOTE Tasmania sold to Tattsbet

The transaction is expected to deliver total upfront proceeds to the State of approximately us$ 118.4 million, including a potential us$ 15.4 million cash refund for GST owed to TOTE, which is expected to be received prior to completion of the sale.
 
In addition, TOTE may be entitled to certain future GST benefits of up to us$ 43.6 million, which Tatts has agreed to remit to the Government as and when they are received. The transaction is subject to various regulatory approvals, including ACCC.
 
On completion, the proceeds of the sale will be used to repay TOTE’s outstanding debt to the Tasmanian Public Finance Corporation and, post completion, there may be an adjustment to reflect changes in TOTE’s adjusted net assets from 30 June 2011 to the date of completion.
 
The Premier Lara Giddings said the sale was fair and reasonable price given the significant commercial risks associated with the business. “This sale is a great outcome for the people of Tasmania and will mean the State will no longer be directly exposed to the significant risks associated with ownership of a betting agency in an increasingly competitive wagering market,” Ms Giddings said.
 
The State will also continue to receive the annual wagering levy from TOTE which is over us$ 6.5 million per annum (indexed to Hobart CPI).
 
The Tasmanian Racing Industry funding arrangements will be unaffected by the sale of TOTE as there are no direct funding links between the TOTE and the Tasmanian Racing Industry. However, as part of the transaction, the State has negotiated an agreement with Tatts to maintain certain service obligations, including the provision of ongoing access to the TattsBet pool, wagering on Tasmanian racing and a free to air racing radio service.
 
Ms Giddings said that Tatts has a strong track record as a leading wagering and lotteries operator in Australia. Tatts is currently the licensed totalisator and fixed odds wagering operator in Queensland, South Australia and the Northern Territory, and operates lotteries in Queensland, NSW, Victoria, Northern Territory, ACT and Tasmania.
 
“Tatts is the only operator in Australia to have successfully acquired and fully integrated state owned pari-mutuel wagering businesses following the acquisitions of SA TAB and NT TAB. This will ensure a smooth transition and integration of TOTE into the Tatts business.”
 
Following the transaction, TOTE customers will have access to the full range of TattsBet products, including both its pari-mutuel and fixed odds offerings, and will see improvements to the retail network. Tatts will also support local employment and will continue to operate TOTE’s call centre in Tasmania.
 
TOTE customers will also continue to benefit from player protection and harm minimisation measures regulated by the Tasmanian Gaming Commission under the Gaming Control Act. The transaction is expected to complete by the end of March 2012.