Tabcorp to appeal decision blocking firm from almost AUS$700m of compensation

ralian operator Tabcorp is lodging an appeal against a judge’s decision that blocked the firm from receiving almost AUS$700m from the state of Victoria.

Tabcorp, along with fellow operator Tatts Group, first took legal action against the state government in 2012 after they lost their duopoly over the operation of poker machines outside the Crown casino in Melbourne, with pubs and clubs operating the state’s nigh on 30,000 poker machines instead.

Based on a statutory provision included in legislation from 1994, the firms claim that when they lost their rights to operation the state was obliged to pay a compensation payment.

After a long-running court battle, on 26 June Justice Kim Hargrave found that Tatts was entitled to their appeal and entitled to a compensation payment of AUS$451.2m plus AUS$89m worth of interest and costs.

His ruling was based on a 1995 agreement between Tatts and the state government, which included a clause allowing for compensation if its poker licence was terminated.

However he rejected Tabcorp’s claim for $686.8m on the basis that no new licences were given out when the duopoly was broken up.

Tabcorp is now appealing this Supreme Court judgement, while the state of Victoria is appealing the Judge’s ruling in favour of Tatts. The dual appeals mean the ending of proceedings is still a long way off.

The firm argues that when the government privatised the Victorian TAB and listed Tabcorp on the share market in 1994 this enacted a law that would guarantee Tabcorp a payment when its 18-year licence expired.

In a statement to the stock market the firm said it is determined to pursue its claim with interest.

The statement said: “Tabcorp’s claim is that the state of Victoria was obliged to make the payment to Tabcorp in August 2012 when Tabcorp’s Gaming and Wagering Licences expired and new licences were granted.

“The claim is based on a statutory provision included in legislation from 1994 when the state privatised the Victorian TAB and listed Tabcorp on the Australian Securities Exchange.

“Tabcorp’s initial public offering (IPO) was underpinned by this statutory entitlement, the terms of which were clearly set out in the prospectus.”

Lawyers for the parties will now appear in the Victorian Court of Appeal at a later date.