A right to a payment the law had made impossible was not a contingent right for Division 230. The High Court has refused special leave.
A $1.49 billion deduction claim. A gaming licence that expired with nothing to show for it. And a creative attempt to use the TOFA provisions to crystallise the loss.
On 26 March 2026, the Full Federal Court shut it down.
Tabcorp Maxgaming Holdings Limited v Commissioner of Taxation [2026] FCAFC 30.
The setup
Victoria’s gaming industry was a duopoly from 1992. The Tatts Trustees held one of two gaming operator’s licences. Under a 1995 agreement with the State, the Trustees were entitled to a terminal payment if the licence expired and a new one was issued to someone else. Those rights transferred in 2005 to Tattersall’s Ltd, now Tabcorp Maxgaming Holdings Limited [6]-[29].
In 2009, Victoria abolished the duopoly. New legislation prohibited any further gaming operator’s licences. The licence expired on 15 August 2012. Ultimately, no terminal payment was payable.
The High Court had held in Victoria v Tatts Group Limited [2016] HCA 5 that Tatts Group, now Tabcorp Maxgaming Holdings, was not entitled to payment under either contract or statute.
Tabcorp turned to Division 230 of the ITAA 1997. The argument: upon expiry of the licence, a “financial arrangement” came into existence, a contingent right to the terminal payment. When that right ceased six months later, Tabcorp claimed a loss of $1.49 billion [64].
The core question
Did Tabcorp have a “financial arrangement” under s 230-45?
Section 230-85(a) treats a right subject to a contingency as a right for Div 230 purposes. But the Court drew a critical line: a contingency must involve a real possibility that the condition may or may not be satisfied [104]-[105].
Building on Nourse J in IRC v Trustees of Sir John Aird’s Settlement [1982] 2 All ER 929, the Court held: where there is no real possibility a condition will be satisfied, it is “a contingency without reality and substance and no real contingency at all” [104]-[105].
The result
Both the statutory right under s 3.4.33 of the Gambling Regulation Act 2003 (Vic) and the contractual right under the 1995 Agreement failed the test.
As at 16 August 2012, s 3.4.3 prohibited the grant of any new gaming operator’s licence. The condition for payment could not be satisfied under the law as enacted [110]. A theoretical possibility that Parliament might reverse the 2009 reforms and reinstate the duopoly was not a real contingency [111]-[112].
The appeal was dismissed [131].
The practitioner lesson
Division 230 casts a wide net: it captures rights subject to contingencies. But a right tethered to a condition that cannot realistically be satisfied is no right for Div 230 purposes.
The lesson extends beyond TOFA. Whenever a tax outcome turns on a “contingent right”, ask: is there a real possibility the contingency will be satisfied? A theoretical possibility is not enough.
Important to note is that, apart from qualifying securities that end more than 12 months after the taxpayer starts to have them, Div 230 only applies mandatorily to taxpayers other than individuals that meet the thresholds in s 230-455. Most would not qualify.
Update, 19 September 2026. The High Court refused special leave to appeal on 10 September 2026: Tabcorp Maxgaming Holdings Ltd v Commissioner of Taxation [2026] HCADisp 220.
General information only. This note was accurate when written. It was last updated on 19 September 2026. The law may have changed since. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.