‘The Entain AU3.5 billion dollar offer if accepted will see the firm acquire an additional 44% Australian sports betting market share!’ (Image by Patty Jansen from Pixabay)
Early this morning the revised Entain AU3.5 Billion offer for Tabcorp was confirmed amounting to what is US$2.7 billion to acquire the ‘Wagering & Media’ arm of the business.
British-based iGaming giant Entain, formerly GVC Holdings, initially made an AU$3 billion offer for Australian-owned Tabcorp in February this year. At the time, Tabcorp’s ASX/TAH shares were hovering around the AU$4.00 mark. Yet, as is common when an already successful corporation opens negotiates, shares tend to gain momentum post big. In the case of Tabcorp, its shares skyrocketed 25% nearing AU$5.00.
Entain probably expected the share price hike and has now come back with a bid 17% higher than the previous offer. Although the percentages do not match, the 17% increased bid is likely because Tabcorp share increases were partly due to the original offer from the UK firm. Should interest wain or Tabcorp decide not to take Entain up its offer, share prices will probably drop off 10%. As such, the additional half a billion Australian dollars appear to be a fair offer to reflect current stock market movements.
On the Entain online news page, confirmation of the bid has been made official by the PLC while Tabcorp also confirms that it received the bid which is subject to a lengthy list of conditions!
Entain Aims to Become Market Leader in Australian Sports Betting
If Entain lands the Tabcorp deal, this would make the brand the market leader in horse racing and sports betting in the Australian market. The company already has a 4% market share via its Ladbrokes operations, but Tabcorp dominates the market with a whopping 44% market share. And it doesn’t take a genius to figure out the total market share Entain will own should this deal go through. A huge 48% and with Entain’s expertise, the company could push this number to over 50%. This would add to the already rising Entain share prices which this month rose from 1,510 GBP to today’s current valuation of 1,710 GBP!
Tabcorp also has other interested parties looking to purchase its whopping 44% share of the Australian horse racing and sports betting market, with Fox Corporation eyeing up a potential deal!
Conditions of the Entain Bid:
- Due diligence
- Arranging financing
- Regulatory Approval Confirmations
- Third-party approval
Is Online Sports Betting Legal in Australia?
Currently, Australian law forbids online casinos to operate in the country, but the same laws do not apply to sports betting online as long as the company offering these services has a license from the Australian government. This license falls under the wing of the Interactive Gambling Act of 2001.
Tabcorp currently holds such a license which is exactly why one condition of the Entain bid pertains to ‘Regulatory Approval Confirmations i.e., proof that Tabcorp has a license to offer sports betting services as well as online sports betting under the Interactive Gambling Act of 2001. Of course, as Entain is a UK-based firm, and the Australian government will only issue a license to an Australian company, Entain will need to get around the legal frameworks within the country, but as Tabcorp is an Australian-based firm, as long as the company continues to pay taxes, it should be plain sailing for Entain.
Companies such as Unibet, founded in Earl’s Court London and part of the UK firm Kindred operates in Australia via its Sydney headquarter. Also, Betfair, now part of the UK firm Flutter Entertainment is another UK firm offering betting services in Australia, while Bet365 is another UK brand and operates out of Melbourne!
UK Sports Betting Firms In Australia
- Flutter Entertainment (Betfair/Paddy Power)
- Entain (Ladbrokes)
- 888 Holdings plc. (888sport)
- Bet365
- Betfred
- William Hill (Now US-Owned)
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