News from Australia that Tabcorp, the country’s largest gaming and betting company, is to split its casino sector from its other gambling businesses has met with mixed reactions. The resulting two independent companies listed on the Australian Securities Exchange could bring about takeover moves that would consolidate Australia’s gambling industry. Analysts believe that Crown could bid for the new casino company and Tattersall’s the wagering company.

After taking control of Sydney’s Star Casino less than two years ago, American Larry Mullin will now run the casino company. The wagering, gaming and keno businesses, which will retain the Tabcorp name, will be run by David Attenborough who joined Tabcorp in May having been CEO of South Africa’s Prumelela Gaming and Leisure and having worked for Ladbrokes. Tabcorp commented it had been considering a demerger for around three years and decided the time was now right. Tabcorp also announced today that it would raise $430 million from the issue of new shares at $6.25 each to provide ‘funding certainty’ for casino growth initiatives and to ensure that both entities had appropriate capital structures.

Tabcorp chairman John Story said “The demerger will create two large ASX-listed entities able to pursue their separate strategies, with casinos to benefit from material capital investments, and the wagering, gaming and keno businesses well positioned within a rapidly evolving retail and online environment.” Already Tabcorp casinos are undergoing major expansion and refurbishment, including $960 million being spent on Sydney’s Star Casino and $175 million on the Gold Coast’s Jupiters. (E-10.18.10)



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