Lottery Corp's Long-Dated Licenses Underpin a Wide Economic Moat

The Lottery Corporation should continue to dominate lotteries in Australia. Regulation limits competition through compulsory licensing, thereby bestowing on Lottery Corp a near-monopoly over long-dated licenses in all Australian states and territories except Western Australia. The only significant license set to expire before 2050 is the Victorian lottery license, which expires in 2028. Competition for the Victorian license at renewal is likely, and we anticipate a good chance that Victoria would grant a second lottery license. Still, this risk is immaterial to our fair value estimate. We do not expect any significant regulatory changes, given the government and community's dependence on Lottery Corp's revenue.