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Gambling Giants Tatts and Tabcorp Win and Lose

Gambling Giants Tatts and Tabcorp Win and Lose

This week, Tatts won major compensation from the Court of Appeal of the Supreme Court of Victoria.

Gambling Giants Tatts and Tabcorp Win and Lose

Tatts and Tabcorp had a week of wins and losses with the Victorian Government this week.

Despite this, tax bills were also reinstated bringing losses to gambling giants, Tatts and Tabcorp.

Yesterday, the appeal by Treasurer Michael O’Brien was upheld by the Court of Appeal of the Supreme Court of Victoria.

O’Brien was appealing a ruling which was made a year ago which significantly reduced the levies of $42 million to be paid by both Tatts and Tabcorp.

The core of this case is around the Government’s application of a ‘Health Benefit Levy’ (HBL) to Tatts and Tabcorp for FY13.

Both companies had argued that this levy did not apply to them since their duopoly on the State’s poker machines had already ended on 15 August 2012.

While this decision by the Supreme Court was positive for both companies, unfortunately a decision handed down by the Victoria Supreme Court a few days ago brought a major loss to Tabcorp.

Kim Hargrave, the Supreme Court judge, ruled on the action which was launched by Tatts and Tabcorp in 2012. Both companies were seeking compensation after the Brumby Government stripped them of their poker machine licenses.

In her ruling, Justice Hargrave ruled that Tabcorp would not receive the $686 million claim for compensation. Tatts was however awarded $451 million plus interest.

This amount is expected to exceed $540 million and will impact the Victorian budget negatively.

Thanks to an agreement between Tatts and the Kennett Liberal Government made in 1995, where Tatts paid substantial license fees fin order to gain control of their poker machines, the outcome from the Supreme Court was positive for this gambling company.

It is believed that Tabcorp and the Victorian Government are considering appeals.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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