Australia’s leading internet lottery business Jumbo Interactive, which at the end of last year successfully entered the UK market through the acquisition of Gatherwell Limited, has further extended its reseller agreements with Tabcorp. Having 15 years of fruitful cooperation under their belt, the two companies look forward to another 10-year term ending around July 2030.
Jumbo Interactive Extended Reseller Agreements With Tabcorp For 10 Years
Basis For Continuing Expansion
Following the signing of a binding term sheet on 28 June, the revised reseller agreements will cover NSW, Victoria, South Australia, Northern Territory, ACT, and Tasmania, as well as international jurisdictions but will not apply to Western Australia where Tabcorp does not hold a lottery license. On the bright side, online operator Jumbo is currently in discussions with Lotterywest, aiming to reach an agreement regarding arrangements for its WA customers.
Jumbo’s CEO and Founder, Mike Veverka said:
“The next 10 years will see a lot of advances in the lottery industry both in Australia and abroad. The new 10 year reseller agreements are the longest ever term in Jumbo’s history and provide a basis for continuing expansion.
In addition to growing the Australian online lotteries business with continued access to Tabcorp’s existing successful portfolio of lottery games, Jumbo will continue to pursue international lottery opportunities, leveraging Jumbo’s lottery SaaS platform. Having a long term distribution arrangement with Tabcorp with its world-class operational capabilities and significant commercial relationships will support our future growth aspirations.”
39 Large Jackpots For FY20
Under the newly signed agreements that not only recognize the enlarged scale of Jumbo but also the principal value of Tabcorp’s lottery licenses to Jumbo, the latter will pay to Tabcorp an upfront fee of $15 million and a service fee totaling 4.65% of the ticket subscription price. The fee will start at 1.5% in FY21, 2.5% in FY22, 3.5% in FY23, and 4.65% for each applicable financial year after that period.
If during FY 21 – 23…
…the subscriptions exceed $400 million a year, Jumbo will pay an additional service fee of 4.65% on the excess value. In the case, the agreed long-form relationship is not entered into within 60 days from the date of signing the binding term sheet, the period of the reseller agreements will be reduced expiring on 1 May 2023, with a partial refund of $13.5 million of the extension fee and a reduction of the service fee.
Jumbo, which signed its initial agreement with Tabcorp in 2005, reaffirms 39 large jackpots for FY20 with a projected aggregate value of $1.57 billion and an average value of $40.1. In 2019, the company set an ambitious goal – to reach $1 Billion in ticket sales on its platform by FY2022.
Source: “Long running channel partnership with Tabcorp extended for 10 years to 2030“. Tabcorp. June 29, 2020.