The ACT TAB was unlikely to meet its debts because the Vitab deal, the ACT Auditor-General reported yesterday. The report said ACTTAB had lost $3.5 million arising from the Vitab agreement and was now unlikely to meet its obligation to repay the Government which had underwritten the loss.
Under the agreement ACTTAB gave the Vanuatu-based Vitab access to its betting pool (which in turn was linked to Victoria’s) in return for a percentage of turnover. The deal turned sour when Victoria cut the ACT out of its pool and ACT dividends fell or became erratic. Vitab then sued ACTTAB which settled.
Co-incidentally yesterday, the Government introduced a Bill to eliminate the automatic fixed percentage-of-turnover payments that go from ACTTAB to the ACT racing industry and the ACT Government. Instead the Government could raise or lower the percentage.
The Deputy Leader of the Opposition, Tony De Domenico, unsuccessfully moved amendments so that the percentage going to the racing industry would be preserved. The Bill passed with the support of Independents.
Mr De Domenico said the Government would be forced to reduce payments to the industry because of the Vitab affair.
The Government said its Bill was to enable ACTTAB to meet possible extra competition from the newly privatised Victorian TAB.
At present all Australian TABs have an informal agreement to pay punters about 85 per cent of turnover. That agreement need not be adhered to by the privatised Victorian TAB which could raise the percentage given to punters, paying them on average better dividends. This would then attract interstate telephone bets.
The Auditor-General’s report said it had undertaken an analysis of “”ACTTAB’s ability to remain financially viable in light to the $3.3 million debt which was raised to settle the Vitab contract. . . . Based on current rates of interest the annual payments related to the Vitab loan will be approximately $600,000 per year. If profits remain at their current level it is unlikely that cash generated from operations will be sufficient to meet repayments of the loan.”
At the time the Vitab deal was made public a year ago, the then Minister for Sport, Wayne Berry, described it as “”a good deal for the ACT”.
He told the Legislative Assembly that all was well with the deal when the Victorians had threatened to withdraw access to their pool, prompting a successful no-confidence motion in him in April after which he resigned.
The new Minister for Sport, David Lamont, recontracted with the Victorians for access to their pool, but it was on condition that the ACT’s link with Vitab was severed. He did this which resulted in Vitab suing and a settlement being made.
Former Prime Minister, Bob Hawke, was a shareholder in Vitab and helped promote the company in its deal with ACTTAB. His share of the gross pay-out is estimated to have been about $300,000.
The turnover of ACTTAB is about $100 million a year, of which about $85 million goes to punters and the rest is split between the racing industry, administration and government.