Sound Balance Sheet Leaves Lottery Corp Well Placed for Victoria Licence Renewal

We expect The Lottery Corp to thrive now that it is unshackled from Tabcorp's competitively challenged wagering business. Regulation limits competition via compulsory licensing, bestowing The Lottery Corp with a near-monopoly on long-dated licences in all Australian states and territories except Western Australia. The only significant licence due to expire before 2050 is for the Victorian lottery, which expires in 2028. We think competition for the Victorian licence on renewal is likely and anticipate a good chance Victoria would grant a second lottery licence, but the risk is immaterial to our fair value estimate. We do not expect any significant changes in regulation due to the government and community's dependence on The Lottery Corp revenue.