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TASMANIAN GOVERNMENT PLANS ON TASMANIAN TOTE

The Tasmanian government treasurer, Michael Aird, has published plans for the disposal of the Tasmanian Tote in order to increase funding to the horse racing industry. In a statement released this week, Aird said that relevant legislation will be presented to Parliament in the autumn which will amend the Gaming Control Act 1993 to bring the Tote under the authority of the Tasmanian Gaming Commission prior to its sale through a competitive bidding process.
 
The process would include the appointment of an independent probity adviser who will oversee the sale process to ensure it is conducted openly and fairly.
 
“The divestment will help in improving Tote’s competitive position compared to the other privatised TABs in New South Wales, Queensland, Victoria and South Australia,” Aird said. “Maintaining a wagering business in public ownership is not a core function of Government.
 
“The proceeds of the sale, which we hope will be finalised by the end of June 2009, will be reinvested into other state assets.
 
“The sale of Tote is consistent with most other Australian States and Territories which have also sold their wagering businesses with only Western Australia and the Australian Capital Territory still with government-owned totalisators”.
 
Aird said the government would work to ensure, where possible, that Tote Tasmania staff retained their jobs and existing conditions under private ownership. “All accrued entitlements for staff at the sale date will be preserved,” he said, revealing that with the transfer of its racing functions to the Tasmanian Racing Board, Tote Tasmania employs around 100 full time staff.
 
“Bidders will be asked to submit their intentions regarding employment levels and employment terms and conditions. These submissions will then be considered when evaluating overall proposals," said Aird.
 
The amendments envisaged to the Gaming Control Act will subject Tote Tasmania to regulation by the Tasmanian Gaming Commission, consistent with other wagering operators such as Betfair, and will also result in Tote Tasmania paying wagering tax directly to the Consolidated Fund.
 
“The Tasmanian Racing Board, the body that is now responsible for distributing funding to the industry, will be funded from the State Budget," explained Aird, adding that the sale of Tote Tasmania will provide opportunities to increase funding to the Tasmanian Racing Industry.
 
“I can guarantee that the Tasmanian Racing Industry will not be worse off by these arrangements," Aird promised. “The Tasmanian Government will separately fund the racing industry and over the coming months a long-term funding model will be developed in consultation with the new Tasmanian Racing Board and Tote Tasmania.
 
“The clear aim in developing the funding model will be to increase funding to the industry and ensure its long-term sustainability.”
 
The Tasmanian government believes there are three principles that will be central to any future funding model for the Tasmanian Racing Board:
 
* Sustainability and revenue predictability for the Tasmanian racing industry
 
* Funding for an appropriate level of capital works; and
 
* Funding to enable the Tasmanian Racing Board to develop the Tasmanian racing product.
 
Tote’s capital commitments, including A$6 million for lights at Tasman Park in Launceston, would not be affected by the sale.
 
Aird remarked that the timing for the sale of Tote was appropriate. “While economic conditions are volatile, good assets can still be sold with a strong return,” he said.
 
“Tote Tasmania is a unique business and I am sure it will attract significant buyer interest despite the volatile markets because, importantly, most of the likely bidders still have access to capital.”
 
Aird has appointed Deloittes as the government's financial adviser and Clayton Utz as its legal adviser. Any interested bidders should direct their queries to:
 
David Willington
Director
Deloitte Corporate Finance Pty Limited
Level 3, 225 George Street
Sydney, NSW, 2000
Australia



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