Tatts Group has been told it must pay back more than $540 million ($391 million) to the Victorian Government after losing an appeal in The High Court of Australia.
Tatts will also have to pay the state’s costs for the appeal, costs from earlier court hearings and interest, which has yet to be determined.
Tabcorp and Tatts took on the Victorian Government after state reforms in 2012 which took away their long-standing poker machine duopoly in Victoria. In 2014, the government was ordered to pay more than $450 million in compensation to Tatts after the group cited a termination agreement. Shadow treasurer Michael O’Brien said it was one of the “greatest financial disasters in Victoria’s history.”
However, the High Court ruled on Wednesday in favor of the Victorian Government, saying Tatts and Tabcorp were not entitled to compensation.
In an announcement from Tatts Group following the ruling, the group said the “expected financial impact in the 2016 full year accounts will be payment to the State of the additional interest plus costs,” as it was not recognized as income in Tatts’ financial accounts when the initial compensation was awarded to them.
“Following repayment to the State, the group’s net debt to EBITDA ratio is still comfortably serviceable considering the group’s cash flow, profitability and future opportunities.”
Tabcorp made a similar claim in 2014, which was rejected, and appealed the decision, however, it was also rejected on Wednesday.