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Lottery's Victorian License Extension Structurally De-Risks the Business, Says Jarden

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Lottery (ASX:TLC) has secured a 40-year extension of the Victorian Public Lottery License that structurally de-risks the business despite weighing on near-term earnings, Jarden said Wednesday in a note.

The exclusive monopoly license, achieved through an upfront payment of AU$1.145 billion, compares with Jarden's prior assumption of AU$400 million for a 20-year renewal. The extension underpins long-term earnings visibility with stable cash flows, it added.

The deal is expected to pressure near-term earnings, with a total NPAT headwind of roughly AU$47 million from higher financing costs, license amortization expenses, and the removal of online Keno revenue from 2027. However, the transition to an NPATA-based dividend policy should keep dividends broadly stable.

The investment firm lowered its fiscal 2027 and 2028 NPAT projections by 13% and 16%, respectively.

Jarden maintained its overweight rating and price target of AU$5.60.

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