The Victorian Government have confirmed that the Victorian wagering license will again go to Tabcorp, as part of a newly signed twelve year deal between the parties.

Tabcorp will pay a licensing fee of $410 million to operate and control the exclusive and lucrative pari-mutuel betting market (the tote) throughout the state from August next year until 2024.

British bookmakers Ladbrokes and Tattsbet (the company that holds the wagering licences in Queensland, South Australia and Northern Territory)  both attempted to secure the license – however it was always favoured to go to Tabcorp because if it didn’t win the renewal it would have been entitled to a $597 million refund from the Victorian government.

The new deal does not start until August next year, which gives Racing Victoria plenty of time to negotiate with Tabcorp about how revenue will be shared between the various stakeholders in the racing industry.

“Racing Victoria welcomes the Victorian government’s decision to award the new wagering and betting license to Tabcorp and the government’s continuing commitment to delivering a ‘no less favourable’ outcome for the Victorian racing industry,” said Racing Victoria Chief Executive Rob Hines.

“We look forward to holding discussions with Tabcorp over the coming weeks to finalise the terms of the new joint venture agreements. As the negotiations will be subject to a commercial in confidence process, we are unable to make any further comment at this stage.”

Tabcorp Chief David Attenborough said that Tabcorp remained committed to the Victorian racing industry.

“We are commmited to operating a strong and wagering business in Victoria. We will continue to invest in product innovation, our retail distribution and technology,” Attenborough said.

“Tabcorp has a proven track record of working with the Victorian racing industry and other stakeholders to grow industry returns and we look forward to working with the three codes of racing to ensure Victoria remains one of the world’s premier racing jurisdictions.”

The granting of the license prolongs the monopoly Tabcorp have held over on and off course betting since the 1960’s. Tabcorp now controls wagering in 626 agencies and on 87 race tracks in Victoria. That is in addition to the fact that they hold the New South Wales wagering license as well which sees the company control a further 1976 agencies and venues in that state.

Although there is provision in the new deal for Tabcorp to do so, David Attenborough said that Tabcorp would not be moving into the controversial betting exchange market.

“We have always had concerns about the integrity of betting exchanges and we are yet to see a betting exchange operate successfully in Victoria,” Attenborough said.

Under the current agreement, Racing Victoria gets a 50 per cent split of profits generated by race betting, however this level will fall to 25 per cent under the new agreement.

However Victorian racing minister David Napthine said the shortfall would be made up through new tax measures. The taxes paid by racing punters falls from 28.2 per cent to 16.69 per cent, while the amount of tax paid by gaming machine users has increased.

“It is up to the three racing codes to distribute the money but the provision is certainly there for greater prize money. There is no reason why prize money shouldn’t increase.” Napthine said.

Racing Victoria will receive a minimum of $337 million from Tabcorp in 2013, and $342 million in 2014.

Tabcorp faces one more test in their quest to maintain the wagering monopoly that they have owned in Victoria for the best part of 50 years. Corporate bookmaker Sportingbet are currently challenging the legitimacy of Tabcorp’s retail monopoly, with a court decision on the matter to be handed down in the near future.