Bookmaker Tabcorp set for record jump on winning Victorian wagering license

By Rishav Chatterjee

(Reuters) - Shares in Australia's Tabcorp were on track for their best day ever on Monday after the bookmaker said it had won sole rights to a new licence for betting and wagering in the state of Victoria for the next 20 years.

The racing and wagering giant said it would pay an indicative value of A$864 million ($578.53 million) for the licence, which it has held since 1994.

Shares of the firm jumped as much as 24.8% to A$0.918 as of 0213 GMT and were set for a record intraday surge, emerging as the top gainer on the ASX 200 benchmark.

Tabcorp will pay a licence fee of A$600 million to Victoria's government in June and 19 annual payments of A$30 million commencing Aug. 16, 2025.

Local media had earlier reported about a bidding war between bookmakers, which also included betting giant Sportsbet.

"Significantly, the terms of this agreement will place Tabcorp on a level playing field with our competitors for the first time in Victoria," Managing Director and CEO Adam Rytenskild said.

Media had speculated that Sportsbet had originally placed a higher bid to split the licence with Tabcorp in a move for both the companies to operate betting shops in Victoria.

Analysts at Jefferies term the exclusive licence win as a "positive outcome" for Tabcorp, as the company sees an annual earnings before interest and tax (EBIT) uplift of A$132 million.

"A positive outcome for Tabcorp all round," Jefferies noted, adding it should alleviate investor uncertainty on the licence outcome after media reports suggested that Sportsbet had outbid the company as well as discussion on shared licence outcomes which could have been "operationally messy."

Tabcorp's had reached its existing agreement with the Victorian government in 2011 and paid A$410 million as an upfront fee to exclusively operate retail outlets in pubs and clubs.

($1 = 1.4934 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru)