Jumbo Interactive Resumes Trading, Extends Partnership with Tabcorp | KOSEC

Industry News

& Articles

Jumbo Interactive Resumes Trading, Extends Partnership with Tabcorp

Facebooktwitterlinkedin

Two weeks after it entered a trading halt on 15 June 2020, Jumbo Interactive has now resumed trading. Specifically, Jumbo extended its 15-year relationship with Tabcorp Holdings Limited after signing a binding sheet on 28 June 2020. The new agreement will now expire in July 2030. More notably, the relationship between Jumbo and Tabcorp dates to that of 2005. Jumbo operates the renowned www.ozlotteries.com, Powerball and TattsLotto under agreements with Tabcorp. Subsequently, Tabcorp became Jumbo Interactive’s major shareholder in 2017.

More broadly speaking, Jumbo’s sustained growth within the online lotteries business is in part attributed to Tabcorp’s existing portfolio of lottery games. Thus, the renewed agreement will enable Jumbo to jump on international lottery opportunities all while capitalising on its lottery SaaS (Software as a Service) platform.

Despite the benefits,  there exist several binding terms that form the key aspects of the agreement. Foremost, Jumbo will need to fork out an upfront extension fee of $15 million payable to Tabcorp. On top of that, an additional expense relates to the service fee that comprises 4.65 per cent of ticket subscription price. Yet should agreements fail to form within 60 days from 28 June 2020, the duration of the deal risks the possibility of a revised expiry date.

Nevertheless, the revised agreements will cover New South Wales, Victoria, Northern Territory, South Australia, ACT and Tasmania. Meanwhile, Jumbo remains to be in discussions with Lotterywest surrounding arrangements for its Western Australian customers. The group constitutes close to 10.5 per cent or $33 million of ticket sales in FY19. Nevertheless, should discussions fail to translate into an agreement, Jumbo will look towards other feasible options to maximise the value of its current customer base.

CEO and Founder of Jumbo, Mike Veverka believes that within the next decade, the local and global lottery industry will undergo massive changes. Therefore, the newly implemented 10-year agreement, which is the longest ever term in the firm’s history, will provide a platform for continued expansion. However, investors did not regard the announcement to be favourable.

This is because Jumbo’s shares concluded its first day back at trading 13 per cent lower to $9.90. Top concerns surrounding the decision to extend its partnership relate Jumbo’s ability to maintain a healthy balance sheet. More recently, in the middle of June, the S&P Dow Jones Indices has made changes in the Quarterly Rebalance. Specifically, effective 22 June 2020, Jumbo will no longer be part of the S&P ASX 200 Index.

Nevertheless, Jumbo Interactive sticks to its guidance previously announced on 1 April 2020, confirming its expectations for 39 large jackpots. Despite the considerable decline in large jackpots for FY20, the firm stands to benefit from the pandemic. This is because as consumers turn to online avenues during the COVID-19 pandemic, sales on a like-for-like basis surpassed expectations.

By Caroline Wong 

Click here for a 7 days access to our Lotus Blue Portal.

Caroline Wong

Caroline Wong is a Research Analyst at KOSEC – Kodari Securities. She writes on markets and focuses on ASX Top 300 companies. Email Caroline at c.wong@kosec.com.au.

Comment on this company

Latest Stories

BHP Enters Option Agreement To Discover Copper Deposits

On the 24th of September, BHP Group Limited (ASX: BHP) has entered an option agreement with…..

Brickworks Releases Full Year 2020 Financial Results

Brickworks Limited (ASX:BKW) has released its full-year results for the FY20……

Infigen Takeover Set to Finalize in October 2020

Infigen will enter a $457.4 million Loan Agreement with Iberdrola…….

More for you

Computershare Demonstrates Resilience Through Pandemic Slump

Computershare Limited (ASX: CPU) on the 23rd of September released an overview of FY20 in an annual report….

InvoCare holds difficult role for the remainder of 2020

InvoCare will continue to hold the difficult task of supporting their clients’ needs as…….

Bapcor’s Core Values Underpin Resilient Financial Performance

Bapcor Limited (BAP) on the 21st of September released their annual report, giving an overview……

Commodities remain dependent on Macroeconomic Outlook

The economic impact of COVID-19 continues to have a pertinent influence………

Tabcorp Enters Agreement to Sell A$98 Million in Jumbo Shares

Tabcorp Holdings Limited (ASX:TAH) announces the sale of its 11.6 per cent interest in online gaming company……

Whitehaven Coal’s Sustainability Report Highlights Low Emission Policy

Whitehaven Coal Limited (ASX: WHC) on the 18th of September released its sustainability report.. …

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

Disclaimer
KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

Fees
As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

Privacy
You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.

CLAIM YOUR FREE E-BOOK &
7 DAY ACCESS TO LOTUS BLUE

STOCK MARKET SUCCESS

KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.

CLAIM YOUR FREE E-BOOK WHEN YOU LOGIN TO LOTUS BLUE INVESTMENT PORTAL

Latest TV Commercial