The loyalty and tracking systems business for gaming venues, eBet, has been sold to Venue Digital Technology Pty Ltd, which is led by former Tabcorp and Tatts Group executive Frank Makryllos, in a deal worth AUS$62m ($41.7m/€41.5m/£36.4m). The company has about 525 venues on its books and more than 30,000 electronic gaming machines across New South Wales and Victoria.
At the same time, Tabcorp’s Max Regulatory Services (MRS) has been awarded the new exclusive Tasmanian Monitoring Operator Licence, through which it will monitor all Electronic Gaming Machines (EGMs) in hotels and licensed clubs in the state.
Adam Rytenskild, Tabcorp’s managing director and chief executive, said: “The transactions announced today allow us to simplify our Gaming Services business as we pivot to an integrity services model.
“This continues the urgent implementation of Tabcorp’s transformation strategy. We have strong momentum and bold ambitions to grow both our Wagering & Media and Gaming Services businesses.
“The potential sale of eBet was disclosed at the release of our FY22 results and we are pleased to have the agreement swiftly and in line with our new strategic direction.”
Tabcorp outlined the strategies for each segment of its business earlier this year following the planned demerger of its lottery operations from wagering, media and gaming services.
Under the 20-year Tasmania licence, which begins next July, MRS will pay the Tasmanian government an upfront licence fee of $2m along with an additional $1m grant over the term of the licence to be paid into the Community Support Fund.
Tabcorp said: “The contract reaffirms the opportunity for the business as governments move toward an independent, third-party monitoring model.”
Tabcorp said that eBet generated EBITDA of $4.4m and an EBIT loss of $2m in 2022. The sale is targeted for completion by the end of H1 FY23, subject to necessary probity approvals being obtained and no material adverse change occurring.
Tabcorp would be eligible to receive a break fee of $3m (up to $10m in certain circumstances) where the agreement is terminated due to the buyer failing to obtain the necessary probity approvals or failing to complete the sale.
It said the sale is expected to result in a pre-tax gain on sale of approximately $39m on completion.