Tabcorp has announced that its resale agreement with online lottery ticket retailer Jumbo Interactive has been extended until 2013, with the latter also set to pay new fees as a result.
The news follows on from last week’s report in the Sydney Morning Herald which stated that Tabcorp was looking to renegotiate the deal following a two week Jumbo trading suspension ahead of a proposed move to Western Australia.
Jumbo chief executive and founder Mike Veverka was quoted: “The next 10 years will see a lot of advances in the lottery industry both in Australia and abroad. The new 10-year reseller agreements are the longest ever term in Jumbo’s history and provide a basis for continuing expansion.”
Jumbo runs the OzLotteries website which sells tickets for Tabcorp’s Powerball, OzLotto and TattsLotto under an agreement that could have been terminated by either party in May 2023.
During the trading halt, Jumbo told investors it was in negotiations over its resale operations in Western Australia before updating its message to state it was in negotiations over ‘operations including in Western Australia’.
This new deal, which does not cover either Western Australia or Queensland, includes a $15m extension fee and a new annual service fee scaling of up to 4.65 per cent in 2024.
Simon Shields, fund manager at Monash Investors, which holds Jumbo as one of its top-five investments, added: “In a sense it’s like getting a licence from the government for a casino – you’ve got to pay for that in some way, and this is how they’re paying for it,” he said, adding that he was happy with the outcome.”
As reported by the Brisbane Times, Jumbo had previously stated that it was still in discussions with lottery operator Lotterywest regarding the selling of tickets in Western Australia.