Claiming a position as one of the world’s largest gambling and entertainment groups, Tabcorp announced at its November AGM that it was embarking on the next phase of growth. With a combination of wagering, media, gaming, network games and casinos, the company could be considered a good match for the diversity of the Virgin brand. Recently it has been suggested that Macau may be the fertile ground for a joint casino venture between Tabcorp and Richard Branson’s Virgin.

Tabcorp has said it aspires to being a world leader in gambling and entertainment and the Macau of the moment appears to be ‘must have’ for the gaming industry. The major problem for what could be a marriage made in heaven is the non-existence of any more gaming concessions in Macau. Many analysts feel that operating under one of the present concession holders would have very limited economic value for the two parties.

According to reports, the proposed joint venture would entail Tabcorp contributing to building costs and running the casino with the Virgin brand a marketing tool as it has recognition in China. Tabcorp previously considered bidding for a Singapore integrated resort licence, but in December 2005 decided not to proceed owing to increased development costs, construction and revenue risks and the potential returns and time lines for the project.

At the AGM Tabcorp Chairman Michael Robinson promised that “Tabcorp will only invest in businesses where value can be realised for the benefit of the Company and its shareholders.” Investment in Macau is becoming increasingly risky as overcapacity, competition and rapidly rising construction costs come into play. A Tabcorp operated Virgin casino may be a step too far for both companies, or could prove to be a good bet. Neither company is yet commenting on the possibilities. (E-02.02.07)

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