Tatts (TTS)

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#11
Tatts boss confident as Spring Carnival off and running

Jessica Gardner
620 words
30 Oct 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Gaming giant Tatts Group will bring its new wagering brand to market in mid-November, at the tail end of the ­all-important Spring Racing Carnival.

Chief executive Robbie Cooke denied it was a missed opportunity to spruik the new look during the busiest betting season, saying the plan was always to wait until a new website was unveiled before launching the brand.

Mr Cooke said despite the coming changes the Brisbane-based company would be a serious competitor as the Carnival ramps up with Derby Day this Saturday and Melbourne Cup next week. "We're spending as much on marketing this year for the Cup as we spent last year and the year before," he said. "It's not like we're not in the game. We will have a good Cup period, I'm very confident."

In a trading update delivered at the $4.8 billion company's annual general meeting on Wednesday, Mr Cooke said wagering revenue had increased 1 per cent in the three months ended September 30. This was a turnaround from the 2 per cent fall the division delivered in the 2014 financial year, he said.

"We haven't ramped up our [marketing] spend by any means, [so] the 1 per cent in that context I'm okay with," Mr Cooke said.

Tatts has been working since March 2013 on an overhaul of its brands with Hulsbosch, the agency responsible for the facelift put in place at airline ­Virgin Australia.

The company's much larger lotteries division, which accounts for 67 per cent of revenue, had a stronger first quarter, lifting sales by 12 per cent.

Mr Cooke said strong growth in ­lottery sales was underpinned by a run of large jackpots, which encourages people to buy tickets. In the first three months of the year Tatts has offered 10 jackpots of over $15 million, compared with 8 similar-sized jackpots in the same period last year. "It sets us up really nicely for the year," he said.

Mr Cooke said even without the favourable run there is "a strong underlying performance in the business".

"The jackpot runs are the cream."

Tatts shares gained 0.9 per cent, or 3¢, to close at $3.36 on Wednesday. The stock has gained 7.4 per cent in the past year, but is down from a 12-month high of $3.62 hit in August. The benchmark S&P/ASX200 index has gained less than 1 per cent in the time, while Tatts' nearest gaming rival Tabcorp has gained 10.8 per cent.

At Tabcorp's AGM on Tuesday, chairman Paula Dwyer said the ­company was in talks with the Coalition to push for a ban on offshore unlicensed wagering operators accepting bets from Australians. Ms Dwyer warned that integrity of sport was at risk and revenue was being siphoned away.

Mr Cooke said he would support moves to look into the problem, but was not convinced of its severity. "I have seen commentary [about Australians betting offshore], but I haven't seen the hard evidence to support those ­numbers," he said.

Chairman Harry Boon said Tatts had received its $540 million in ­compensation from the Victorian ­government over the loss of its pokies licence that ceased in 2012. However, the payout had not been recognised as income while an appeal was ongoing.

Mr Boon also said some shareholders had asked why Tatts does not merge or sell its wagering operations to ­Tabcorp. "We are at the start of a very exciting journey in growing the Tatts wagering business for the benefit of all shareholders," he said in response.

Key points


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#12
http://www.asx.com.au/asxpdf/20141204/pd...dvf11s.pdf

Tio Bei Pio also have to keep waiting... LOL Aussie system...

Wait a long while...

Tatts wins $540m claim from govt
MICHAEL RODDAN AND AAP DECEMBER 04, 2014 6:30PM

The newly sworn in Victorian government will pay Tatts Group $540 million in compensation, after the Victoria Court of Appeal dismissed the government's appeal.

The Victorian government's battle with two gaming firms over huge compensation claims for the expiry of poker machine licences cames to a head on Thursday, with the unanimous decision handed down in the late afternoon.

The Court also ordered the state to pay Tatt's costs of the appeal, plus $89m in interest and costs.

Tatts welcomed the decision, which it said upholds an agreement entered into with the state of Victoria in 1995.

Tatts and Tabcorp lost their duopoly over the operation of poker machines outside of Melbourne's Crown casino in August 2012, following a state government decision four years earlier.

The government was in June ordered by the Supreme Court to pay Tatts $540 million in compensation, while Tabcorp's application for about $687 million was dismissed.

The government appealed the Tatts ruling. Tabcorp also appealed its loss in the Supreme Court, but had its appeal dismissed today. Tabcorp said it is reviewing the judgement to determine whether it will seek special leave to appeal to the High Court.

Tatts says the compensation has not been recognised as income in the group's financial accounts, having been treated as unearned income and a current liability, and won't be recognised in the financial accounts until the matter is finally concluded, dependent on whether the Victorian government lodges an appeal of the decision.

The government has 28 days to lodge a special leave application in the High Court.

Vested
GG
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#13
Judges slam Victorian govt on gambling reform
Jessica Gardner
602 words
5 Dec 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

A trio of Court of Appeal judges has slammed the conduct of the Victorian government over the reform of the state's gambling sector, casting a shadow over new Premier Daniel Andrew's election victory this week.

A Victorian Court of Appeal judgement on Thursday upheld a $540 million compensation payment for Tatts Group but rejected a similar claim for $687 million by Tabcorp.

The finding would "do little to enhance the state's reputation for reliability and commercial morality in its dealings," the judges said.

The two gaming giants have been fighting the state after the Brumby government took away their duopoly to operate poker machines.

The companies were given 18-year licences by the Kennett Coalition government in 1994 to operate the state's pokies, outside of Crown Resorts' Melbourne casino.

However in 2008 the then Labor Brumby government decided to make management of the 27,500 pokies in the state's pubs and clubs the responsibility of venue operators, as opposed to Tatts and Tabcorp. This is how the system operates in NSW. The new regime began in August 2012.

Amendments to gaming legislation were made by the Brumby government, which acted on advice that it would not be liable to pay compensation.

Tabcorp, which was previously the state-owned wagering operator, argued it had a right to a payment whether or not it was awarded a new licence, as per its 1994 prospectus. The judges said the state had created an expectation "by its stated intentions" that this would be the case.

"The state not only created expectations but profited from the reliance placed upon those expectations by members of the investing public," the judges said, referring to the prospectus as well as a letter from then state Treasurer Alan Stockdale to Tabcorp in 1994.

Mr Stockdale is now the president of the Liberal Party.

"The Treasurer's letter and the prospectus created the expectation that compensation would be paid upon the expiry of the licences after 18 years," the judges said.

"The forecast returns and the forecast balance sheet were prepared upon the basis of that expectation," they said. "Members of the public invested in reliance upon the expectation which the state created and actively encouraged."

Tatts' claim was successful because it argued on a contractual, rather than a statutory basis, that it was entitled to compensation. It referred to an agreement it entered into with the Gaming Minister in 1995 that provided for a termination payment.

The judges said Tabcorp never sought, nor achieved a binding agreement on termination payments. "It put its trust in the state," the judges said. "That trust was misplaced."

Tatts told the market it "welcomes the decision" but will not recognise the money as income until the matter is finally concluded.

Tabcorp said it would review the decision. The parties have 28 days to lodge a special leave application in the High Court of Australia.

In June the Supreme Court ordered the government to pay Tatts $540 million in compensation, while Tabcorp's application for about $687 million was dismissed. The government appealed the Tatts ruling and Tabcorp appealed its loss.

Both companies have outperformed the broader market in the past year. Compared to a 2 per cent rise in the S&P/ASX200, in the past 12 months Tabcorp has gained 21 per cent and Tatts has climbed 11 per cent.

Tatts shares closed down 1.7 per cent to $3.44 on Thursday, while Tabcorp shares lost 0.9 per cent to close at $4.18.


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#14
Citi rates TTS as Neutral
5 Dec 2014

The Court of Appeal has upheld the original ruling of Victoria's Supreme Court, meaning that Tatts is able to retain its $451m compensation claim. Citi has already incorporated the claim into estimates. A $3.35 target and Neutral rating are retained.

Deutsche Bank rates TTS as Hold

Deutsche Bank views the ruling from the Victorian Court of Appeal in favour of compensation for Tatts as a positive for the company but expects the claim amount to be taxable and that the Victorian government may seek leave to appeal.

The broker maintains a Hold rating with the stock trading in line with valuation and target of $3.45. Valuation incorporates a 13c per share compensation, equivalent to 50% of the net amount under the judgment.

JP Morgan rates TTS as Neutral

The Victorian Court of Appeal has dismissed the government's appeal against Tatts' compensation claim. JP Morgan has now fully incorporated the probability that Tatts will receive compensation. A Neutral rating is retained and the target is raised to $3.80 from $3.56.

UBS rates TTS as Buy
116 words

The Victorian Court of Appeal has upheld the Supreme Court judgment in favour of Tatts, which argued for compensation from the government for the loss of its Victorian gaming licence. The government is expected to seek leave to appeal.

UBS believes Tatts is a high quality defensive stock with stable earnings and low capex requirements. A buy rating and $3.45 target are retained.
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#15
Vic premier ponders next Tatts move
AAP
152 words
6 Dec 2014
couriermail.com.au
NLCRMW
English
© 2014 News Limited. All rights reserved.

Newly elected Daniel Andrews treads carefully with verdict still fresh.

Victoria's new premier is considering his next move after gaming firm Tatts won a $540 million compensation payout from the state government.

Tabcorp and Tatts sought compensation after losing their duopoly over poker machines outside Melbourne's Crown Casino in 2012 following a government decision in 2008.

The Tatts ruling was for $450 million including interest of more than $90m.

An appeal by the government was dismissed in the Court of Appeal on Thursday, as was a Tabcorp appeal for more compensation.

New Premier Daniel Andrews said on Friday officials were working through the judgment but hesitated to say much more.

"I need to be obviously cautious," he told reporters.

"The judgment was only handed down yesterday.

"We're looking at it very carefully and we'll have more to say about that soon."


News Ltd.

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#16
Everything to lose Losing the lottery will hurt small business

KUE HALL
506 words
6 Dec 2014
Woologoolga Advertiser
APNWOO
English
Copyright 2014 APN Newspapers Pty Ltd. All Rights Reserved.

Newsagents fight to keep lottery sales out of supermarkets’ hands

WHERE people can buy lottery products may not seem like a pressing issue but Woolgoolga Newsagency’s Geoff Rogers knows better.

The business owner is urging locals to get behind a campaign.

The campaign aims to have Tatts Group commit to keeping the Franchise Agreement for Lotto products to newsagents and not allowing supermarket giants cash in, or face devastating effects to local business.

NSW Lotteries was sold to the Tatts Group in 2010 and as part of that sale all agency agreements were renewed for a five-year period.

That period ends on April1, 2015 and concerns are rising that Coles and Woolworths want to take a stake in selling the products.

Mr Rogers said this would be disastrous for local businesses across the state.

“It’s a big deal. We recently had a meeting with Coffs Harbour MP Andrew Fraser and other business owners in the area and it varied for each business but each said lottery products make up between 45–65% of our income,” Mr Rogers said.

“Let’s say they decide to change the agreement – that’s going to take away half our business and that flows on – probably two-thirds of our staff are here to deal with lottery sales.

“That also brings people in the door, who buy magazines, cards and newspapers.”

Mr Fraser has supported a petition circulating all local newsagents.

“If the Woolworths/Coles duopoly is given the go-ahead to sell lottery products, this could mean the closure of some local newsagents and the end of home-delivered newspapers,” he said.

“Additionally, it could mean the end of the employment for scores of young people who deliver these papers.

“Coles and Woolworths are already selling newspapers, which has had an adverse impact on sales in local newsagencies.”

He said changes could force small newsagents to shut up shop, potentially impacting on the already difficult conditions for gaining employment in regional areas.

“They also have a much lower rate of employment than local newsagents and there is great concern among newsagents that if they lose the sole right to sell lottery products, some local newsagents will be forced to close,” he said.

Mr Fraser said it was simple for residents to show their support by signing a petition calling for better protection of newsagents.

“The petition is available at all local newsagencies and I urge concerned residents to sign the petition to show their support for small business.”

While many residents will be happy to see Woolworths open in Woolgoolga for the convenience it affords, the point the newsagents are making is that such a big company already has plenty of power to attract customers with thousands of other products and they don’t need the boost a contract with Tatts would provide.

It’s also not about depriving Coles and Woolworths of the opportunity to increase their business, simply giving small operators a fairgo.


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#17
Bad news as agents feel pressure

Digby Hildreth
462 words
6 Dec 2014
Tweed Daily News Weekend Edition
APNDNQ
English
Factiva.Gateway.Messages.Archive.V1_0.ELink Copyright 2014 APN Newspapers Pty Ltd. All Rights Reserved

New deal will make life harder

NEWSAGENTS are facing a “slow death” from the financial squeezes Tattersalls are proposing to put on their businesses, said one concerned Tweed agent, who asked not to be named.

With their profits gutted and “saleable goodwill” shrunk, many agencies will go to the wall, he said.

Agents still coming to grips with the possibility of losing Lotto ticket sales to supermarkets are to be further hit with a draconian franchise agreement to take effect on July 1.

“There are a lot of big changes in it, which will spell the end of many newsagents,” the man said.

The new agreement would require agents to carry out – and pay for – a retail image upgrade, replacing the blue with new red and white branding.

The minimum cost for a small agency would be about $22,000. For others it could be as much as $40,000.

Upgrades would be required every seven years.

“Under the old government set up, the state chipped in for such work, but Tatts expects us to pay the whole lot,” he said.

Further imposts upon the agents’ income come from charges for use of the Lotto machines, and a further “franchise fee” for signing up with Tatts.

But the new agreement contains no guarantee that the right to sell Lotto, Powerball and “Jkpot” tickets would not be given to nearby outlets such as supermarkets, the man said.

Agents receive a commission of just over 8% on ticket sales, which will be reduced to 6% after the fees are paid – a loss of tens of thousands of dollars a year.

Newspaper publishers and suppliers of stationery and greeting cards are also concerned at the possibility of newsagents closing.

The privatisation of NSW Lotteries in 2010 was accompanied by a five-year agency protection period during which all existing arrangements with agents were to be maintained. That protection ends on April 1.

Head of the Newsagents Association of New South Wales and ACT (NANA), Andrew Packham, said the proposed franchise deal contained “a number” of significant and concerning elements which would make many agencies unviable.

NANA is touring the regions to listen to agents’ concerns about the end of the protection period and formulate a plan of action.

They have launched an online and in-store petition to enable agents to let the public know the seriousness of the situation, Mr Packham said, and to call on the State Government to indefinitely extend the agency protection period.

The lapse of protection was likely to have long-lasting and devastating consequences for existing agencies and the broader local small business community as well, he said.


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#18
Tatts keen on buying WA’s TAB

Kim Macdonald
330 words
6 Dec 2014
The West Australian
TWAU
English
© 2014, West Australian Newspapers Limited

Queensland-based gambling company Tatts Group says it has a “strong interest” in buying WA’s TAB if the State Government puts it on the market.

It is the first time the Tatts Group, which owns the Queensland, South Australian, Northern Territory and Tasmanian TABs, has confirmed it wants to buy the WA agency, though it has for some months been considered a likely bidder.

Tatts Group chief executive Robbie Cooke said the group had made frequent visits to WA in the past six months to learn more about the local industry and talk about its capabilities ahead of a potential sale.

“We are letting people know we are here, we are talking to people about our active interest so that if a sale process happens, we would be delighted to participate,” Mr Cooke said.

He said that if Tatts Group was successful in buying WA’s TAB, it would bring it under UBET, the new national master brand covering its formerly State-owned wagering services. UBET would help the former TABs compete with corporate bookmakers such as tomwaterhouse.com, Mr Cooke said.

TABs have been losing market share to corporate bookmakers, many based in the NT, where they are subject to lower licensing fees and do not have to make industry contributions like TABs.

“You have one brand that is trying to compete nationally against corporates who have an unfair competitive advantage in terms of their contribution back to the industry and therein lies the challenge,” Mr Cooke said.

“You need ability to scale off a technology investment on the digital side, you need one website to run across wider geography.”

If successful in buying the WA agency, the retail stores would be radically changed.

Mr Cooke said UBET was a big step away from traditional TAB stores.

“It’s about a digital heavy, interactive heavy, vision-heavy experience and trying to engage with the younger demographic,” he said.


West Australian Newspapers Limited

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