SA: SA TAB price tag too low says state opposition

AAP General News (Australia)
08-15-2001
SA: SA TAB price tag too low says state opposition

ADELAIDE, Aug 15 AAP - The $43.5 million price TAB Queensland (TABQ) paid for the SA
TAB was staggeringly low, the South Australian opposition said today.

But the deal announced today was welcomed as a saviour by SA's racing industry, despite
the certainty of some job losses.

TABQ said today it had reached agreement with the SA government in a deal to be finalised
in January next year.

TABQ will receive a 99-year, off-course totaliser licence with a 15-year exclusivity period.

The agreement also includes a provision ensuring the racing industry receives $42 million
over three years indexed from July this year, including a $10 million payment today.

About 67 SA TAB workers will lose their jobs under the deal.

"Over 90 per cent of the people who are currently employed by SA Tab will be unaffected
by our acquisition unless they choose to take packages," TABQ chief executive Dick McIlwain
said in Adelaide today.

"But we won't be forcing that particular issue with staff."

SA Government Enterprises Minister Michael Armitage hailed the sale as an "answer to
all of the doomsday merchants".

"In government hands (it) is a stand alone, small TAB amongst giants - the value and
case for the sale is unquestionable," he said.

However, Opposition Leader Mike Rann said the sale price was "staggeringly low".

"The last recorded operating profit of the TAB to June 2000 was $56.1 million," Mr Rann said.

"So the government is selling this for well below its annual operating profit.

"How does that make any sense?"

The purchase followed an agreement between the SA government and the state's racing industry.

A wagering tax of six per cent plus GST will be applied to the wagering revenue of
the company while SA's racing industry will receive 39 per cent of the commission revenue
from race wagering.

SA TAB generates betting sales in excess of $600 million annually from 380 retail outlets
throughout SA and a telephone betting centre in Adelaide.

SA TAB's betting pools will be joined with the Queensland and Northern Territory pools
in January to produce annual sales in excess of $2.2 billion, representing 23 per cent
of the national off-course totalisator market.

The acquisition is expected to be earnings per share positive within the first year
of operation and will be funded from TABQ's existing cash holdings.

AAP sl/las/de

KEYWORD: TABQ NIGHTLEAD

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