Tabcorp has been refunded a total of A$83m by the Australian Taxation Office after the operator disclosed that a resolution had been reached regarding an ongoing dispute.
This related to the income tax treatment of payments for various licences and authorities, which Tabcorp had confidently declared had been paid to the Commissioner in full. Each proceeding brought by the taxpayers will be dismissed.
As part of the settlement, the ATO will return the aforementioned sum, which is said to represent 20 per cent of the disputed tax liabilities and interest.
However, the company will pay approximately $37m to The Lottery Corporation under the terms of a separation deed dated March 25, 2022.
This saw Tabcorp document the terms of a demerger of TCL, the unit that operates the Tatts Lotto and Keno business across Australia’s six states, from the group’s gaming and wagering division.
After first being disclosed in July 2021 following a “thorough and rigorous assessment of all relevant structural and ownership options”, the aim was to forge two standalone ASX-listed companies, with distinct operating profiles, strategies and growth opportunities.
As a result of its TLC payment, Tabcorp is set to recognise a benefit of approximately $45m after tax in its financial statements for the year ending June 30, 2024. This will be treated as a significant item.
“The settlement also included an agreement in relation to how Tabcorp will treat future licence fees payable in respect of renewals of relevant existing licences,” the company updated.
“Subject to agreed limitations, Tabcorp must treat the fees as being of a capital nature. Tabcorp does not believe this will have any material effect on future results.”
Largest fine in Victoria
This comes off the back off Tabcorp being the latest target of regulator action within the Australian state of Victoria for a major system outage during the 2020 Spring Racing Carnival.
Last week, the Victorian Gambling and Casino Control Commission’s enforcement crusade continued with a A$1m fine being imposed on Tabcorp, the largest received by the company within the state.
Set against the backdrop of a 2021 royal commission and numerous recent financial sanctions and gambling reforms, the scale of the fine, the VGCCC said, reflects a failure to comply with directions to provide information concerning the issue. This left the group’s wagering and betting system unavailable for around 36 hours.
Tabcorp suffered the outage on Saturday 7 November 2022, however, due to an obligation for the WBS to be continuously available, the Victorian Commission for Gambling and Liquor Regulation, the VGCCC’s predecessor, commenced an investigation.
The regulator noted that its directions were issued after the company was not voluntarily forthcoming with provision of adequate information concerning the outage.
