A good read at...

A good read at -
http://www.businessday.com.au/business/my-grandmother-wouldnt-bet-on-tabcorp-20100205-ni2x.html

Will TAH get back to their $18 level before the end of the year?

Some key points -

? On April 10, 2008, the Victorian government announced a new industry structure from mid-2012, after which ''hotels and clubs will directly hold gaming machine licences'?. Until then, and only until then, Tabcorp and Tatts Group have a highly profitable duopoly to operate Victoria?s poker machines (except those in Crown Casino).

? The Victorian government disputed its obligation to repay the original licence fee paid by Tabcorp. Management believes ??that Tabcorp is entitled to a payment of $687 million?? but clearly, the government does not. These factors will greatly affect Tabcorp?s future earnings.

? Tabcorp?s cash flow will almost certainly remain under pressure over the remainder of 2010 and 2011 as the Star City redevelopment continues (free cash flow fell by 34.4 per cent in the latest half-year results). Then, just as the boost from
Star City?s redevelopment flows through in 2012, the company faces the wrenching loss of hundreds of millions in profits from the Victorian gaming business.

? There is also talk of a substantial redevelopment of the Gold Coast?s Conrad Jupiters casino after the Star City work is completed. Apart from the cash cost of these redevelopments, they?re operationally disruptive and there?s the ever-present possibility of cost and time blow-outs.