eBet, a loyalty and tracking systems business catering to gaming venues, has been acquired by Venue Digital Technology Pty Ltd in a deal worth AUS$62 million. Led by former Tabcorp and Tatts Group executive Frank Makryllos, Venue Digital Technology will take over eBet’s operations, which include approximately 525 venues and over 30,000 electronic gaming machines across New South Wales and Victoria. In addition, Tabcorp’s Max Regulatory Services (MRS) has been awarded the exclusive Tasmanian Monitoring Operator Licence, enabling it to monitor all Electronic Gaming Machines (EGMs) in hotels and licensed clubs within the state.
eBet Acquisition and Tabcorp’s Strategic Focus:
The sale of eBet aligns with Tabcorp’s strategic direction and its transformation strategy. The company aims to simplify its Gaming Services business while focusing on an integrity services model. The potential sale of eBet was previously announced alongside Tabcorp’s FY22 results, and the agreement’s swift execution allows the company to move forward with its strategic plans. By divesting eBet, Tabcorp aims to streamline its operations and concentrate on growing both its Wagering & Media and Gaming Services businesses.
Max Regulatory Services Awarded Tasmania Monitoring Operator Licence:
Tabcorp’s MRS has secured the exclusive Tasmanian Monitoring Operator Licence, granting it the responsibility of monitoring all EGMs in Tasmanian hotels and licensed clubs for the next 20 years, starting in July of the following year. As part of the agreement, MRS will make an upfront licence fee payment of $2 million to the Tasmanian government. Additionally, an additional grant of $1 million will be paid into the Community Support Fund over the licence’s term. The contract emphasizes the shift towards an independent, third-party monitoring model, reflecting the evolving regulatory landscape in the gaming industry.
Financial Details and Completion Timeline:
eBet reported an EBITDA of $4.4 million and an EBIT loss of $2 million in 2022. The completion of the eBet sale is expected by the end of the first half of FY23, subject to obtaining necessary probity approvals and no material adverse change occurring. Tabcorp stands to receive a break fee of $3 million (up to $10 million in certain circumstances) if the agreement is terminated due to the buyer’s failure to obtain the required probity approvals or complete the sale. The transaction is projected to result in a pre-tax gain on sale of approximately $39 million upon completion.
The sale of eBet to Venue Digital Technology signifies Tabcorp’s strategic focus on its core businesses and commitment to transformation. As Tabcorp pivots towards an integrity services model, the acquisition provides an opportunity for Venue Digital Technology to enhance its presence in the gaming industry. Simultaneously, Tabcorp’s Max Regulatory Services secures the exclusive Tasmanian Monitoring Operator Licence, solidifying the company’s position as a trusted provider of gaming monitoring services. These developments reflect the ongoing evolution of the gaming sector and highlight the importance of regulatory compliance and integrity in the industry.