Tabcorp resolves its ATO dispute, gains $45m

The news: Tabcorp will recognise an after-tax benefit of approximately $45 million for FY24 after resolving a dispute with the Australian Taxation Office over income tax treatment of payments for various licences and authorities.

The numbers: Australia’s largest gambling company Tabcorp has been refunded approximately $83 million by the ATO, representing 20% of the disputed tax liabilities and interest. As part of the settlement, Tabcorp is required to pay around $37 million to The Lottery Corporation under the terms of their demerger agreement in March last year.

The context: The settlement includes an agreement that Tabcorp treats future licence fees payable in respect of renewals of relevant existing licences as being of a capital nature, which the company does not believe will have any material effect on future results.