InvestSMART

Small and ailing, ACTTAB up for sale

Australia's smallest government-owned gaming business is to be sold because the ACT can't inject the cash needed to make the ailing betting agency competitive again.
By · 23 Nov 2013
By ·
23 Nov 2013
comments Comments
Australia's smallest government-owned gaming business is to be sold because the ACT can't inject the cash needed to make the ailing betting agency competitive again.

The ACT government on Friday said ACTTAB will be sold, possibly as early as next year after a study by PricewaterhouseCoopers outlined a compelling case for the sale of the business with just over 100 staff.

Treasurer Andrew Barr says the government hopes to conduct a competitive bid process to achieve a fair and reasonable sale price after getting the agreement of the ACT Legislative Assembly next week.

Mr Barr would not nominate a likely sale figure.

ACTTAB continues to turn a profit but has reported declining revenues in recent years as it is too small to operate as a stand-alone business.

Mr Barr said ACTTAB needed a capital injection that could not come from the territory budget.

Technology had fundamentally changed the business, as had the arrival of aggressive corporate bookmakers such as Tom Waterhouse.

The most active punters were now males aged 25-35 who did most of their betting on smartphones rather than in shopfronts.

"The smallest TAB in the country is simply not in a financial position to compete with businesses on an international scale," Mr Barr said in Canberra.

ACTTAB reported $1 million profit last year, down as the organisation turnover has progressively sunk to about $100 million.

The profit partly offsets the government's $7 million support for the ACT racing industry.

The successful bidder will need to show how it would support the local racing industry.

Mr Barr said there would be job losses among ACTTAB's staff, two-thirds in administration and the rest in the shopfronts.

The Legislative Assembly is likely to agree to the sale. When it was flagged earlier this year the opposition said that it was well overdue.
Google News
Follow us on Google News
Go to Google News, then click "Follow" button to add us.
Share this article and show your support
Free Membership
Free Membership
InvestSMART
InvestSMART
Keep on reading more articles from InvestSMART. See more articles
Join the conversation
Join the conversation...
There are comments posted so far. Join the conversation, please login or Sign up.

Frequently Asked Questions about this Article…

ACTTAB is being sold because the ACT government cannot provide the necessary capital injection to make the business competitive again. The business has been facing declining revenues and needs investment that the territory budget cannot support.

ACTTAB continues to turn a profit, reporting a $1 million profit last year. However, its revenues have been declining, and its turnover has decreased to about $100 million.

Technology has fundamentally changed the betting industry, with most active punters now betting on smartphones rather than in shopfronts. This shift has made it difficult for ACTTAB, the smallest TAB in the country, to compete on an international scale.

The sale of ACTTAB is expected to result in job losses among its staff, with two-thirds of the employees in administration and the rest in shopfronts potentially affected.

The successful bidder for ACTTAB will need to demonstrate how they will support the local racing industry, which currently receives $7 million in support from the government.

The most active punters for ACTTAB's services are males aged 25-35, who primarily engage in betting through smartphones.

The ACT government plans to conduct a competitive bid process to achieve a fair and reasonable sale price for ACTTAB, pending agreement from the ACT Legislative Assembly.

ACTTAB faces challenges such as declining revenues, the need for a capital injection, and competition from aggressive corporate bookmakers, making it difficult to operate as a stand-alone business.