Lottery Corp's Long-Dated Licenses Underpin Its 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. No significant licenses are set to expire before 2050. Competition at license renewal is likely, and we anticipate a good chance that exclusivity may not be retained. But 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.