Gambling firm Tatts Group says it has had a good start to the financial year, with higher sales in lotteries.
But sales growth is expected to slow as a result of smaller jackpots.
“The good start to the current financial year is a reminder of the strength and reach of Tatts,” chief executive Dick McIlwain told shareholders at the company’s annual general meeting on Thursday.
He said Tatts’ lotteries sales were up six per cent for the period since the start of July.
Saturday lotto was leading the growth, but big-jackpot games Powerball and Ozlotto had struggled, with only one jackpot that had built beyond $15 million since July 1.
Earnings from lotteries are up four per cent for the financial year so far, while profit margins are slightly lower than in the same period last year because of stronger growth in lower revenue jurisdictions.
TattsBet, which provides fixed-priced betting in Queensland, South Australia and the Northern Territory, had a one per cent rise in sales so far this financial year, but a one per cent fall in revenue.
Under a new regime for poker machines in Victoria, Tatts’ poker machines business will end in August 2012, and Mr McIlwain said the one consolation for the company was that it was leaving a business “mired in controversy”.
Pubs and clubs, which will own the poker machines from August 2012, are currently fighting proposed federal reforms that will require poker machine players to set limits on how much they are prepared to lose, before they begin play.
Under the old regime governing the ownership and operation of poker machines in Victoria, Tatts and Tabcorp had a duopoly over poker machines, except for those in the Crown casino in Melbourne.
Mr McIlwain said the Victorian government’s decision to transfer the right to own and operate machines to the venue had created an investment drought, and poker machines at venues were now generating consistent low-level growth.
Mr McIlwain said year-on-year turnover for the company’s United Kingdom gaming machine business, Talarius, had continued to grow in the current financial year.
“This is the first period of sustained growth in more than three years,” Mr McIlwain said.
Tatts chairman Harry Boon said changes to various gambling licences in Victoria had substantially changed Tatts’ source of profits.
Tatts had lost the duopoly over poker machines, missed out on the wagering licence and gaming machine monitoring licence in Victoria, and also lost out on securing the Scratchies lottery licence.
Tatts had secure long-term licences elsewhere: the NSW Lotteries licence for 40 years, the Golden Casket Lotteries licence in Queensland for 65 years, and wagering licences in Queensland and South Australia until the turn of the next century.
The South Australian government’s intention to licence SA Lotteries to a private operator also presented an opportunity for Tatts.
