Lottery Corp. Ltd.

Overview Key strengths Key risks Leading market position in the highly regulated Australian lotteries and Keno sector. License renewal risks, including renewal on less favorable terms or outright loss of license. Exclusive and/or long-dated state and territory licenses creating high barriers to entry. Geographic expansion into less favorable offshore jurisdictions. Low capital intensity, a low fixed-cost base, and the habitual nature of lotteries customers ensure consistent cash flow. Exposure to demographic shifts as well as changes in consumer preferences. Long track record of EBITDA and earnings margin stability through economic cycles. Supporting this competitive position is the group's state and territory licenses, which create high barriers to entry into the retail distribution of lottery tickets in Australia. Those licenses are

...The Lottery Corp. Ltd. (TLC) maintains a strong competitive position within the heavily regulated Australian market. Supporting this competitive position is the group's state and territory licenses, which create high barriers to entry into the retail distribution of lottery tickets in Australia. Those licenses are exclusive or long-dated or both. As a result, we believe the company has limited need to defend its market position through promotional activity. In our view, TLC's very strong position in the Australian market, in which consumers display a high propensity to participate in lottery games, differentiates it from global peers. TLC's high quality stable lottery cash flows remain resilient amid tough consumer conditions. TLC's lotteries cash flows have a long track record of consistent growth through economic cycles. Stability in revenue and EBITDA margins generate stable cash flows akin to infrastructure assets, in our view. This has positioned TLC well during recent periods of persistent...

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