Tatts, Tabcorp sue Vic govt for $1.2bn

24 Aug 2012, 6:01 pm   -   Source: AAP
Gaming firm Tabcorp is seeking $686.8 million in compensation from the Victorian government. (AAP)

Gaming firm Tabcorp is seeking $686.8 million in compensation from the Victorian government. (AAP)

The Victorian government says it will fight claims for $1.2 billion filed by gambling companies Tatts and Tabcorp over the ending of licences.

The Victorian government has been hit with $1.2 billion in legal claims from gambling companies Tabcorp and Tatts Group after they lost their duopoly over the state's poker machines.

Tabcorp filed a writ on Friday claiming $686.83 million after its poker machine licence expired this month, following a similar legal claim by Tatts for at least $490 million.

Premier Ted Baillieu vowed to vigorously defend the legal action, saying it would be taxpayers who paid the price if the suits succeeded.

"The Victorian government will very strongly defend the state's position and act in the interest of all Victorians," Mr Baillieu told reporters.

"Put together ... we are talking about a sum of up to or even more than $1.2 billion, $1.2 billion that would otherwise go to schools, to hospitals, to police, to pre-schools and kindergartens and to community services in general."

Tatts and Tabcorp held a duopoly to operate up to 27,500 poker machines outside Melbourne's Crown Casino until the licences expired on August 15 and the rights to operate the poker machines were passed on to the pubs and clubs.

Tabcorp is seeking a $686.83 million payment from the state, arguing that when the government privatised the Victorian TAB and listed Tabcorp on the Australian Securities Exchange in 1994 it enacted a law that guaranteed Tabcorp a payment when its 18-year licence expired.

The company said the government's statutory requirement increased the attractiveness of Tabcorp as an investment when it was floated.

"The Gaming and Betting Act 1994 provided for a payment by the State of Victoria to Tabcorp on the grant of new licences, irrespective of whether Tabcorp was the new licensee," a Tabcorp statement said.

The then Labor government announced in 2008 it would not pay any compensation to the gaming companies upon the expiry of their licences.

The premier at the time, John Brumby, did not explain the basis for the decision, Tabcorp said.

Asked why the government was following the previous government's decision not to acknowledge the debt in its budget papers, Mr Baillieu said he would not speculate on the claim or the defence of the claim.

He blamed the lawsuits on the previous government's decision not to renew the licences.

"A $1.2 billion impact on our budget would have a significant impact on the state's ability to provide services," Mr Baillieu said.

Tabcorp said the payment was due on Thursday, a week after the new licences commenced.

The Tabcorp writ is different from Tatts' claim, which seeks compensation following the expiration of its gaming operator's licence under an agreement made in 1995.

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