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SYDNEY, Feb 16 (Reuters) - Australian lottery operator Tatts Group Ltd on Thursday posted a 16.5 percent decline in half-year profit as revenue fell due to a lack of big lottery jackpots and a tough competitive environment in wagering.
Tatts, which in October agreed to a takeover offer from betting group Tabcorp Holdings Ltd now valued at A$5.7 billion ($4.39 billion), reported a net profit of A$122.8 million for the six months ended Dec. 31, down from A$147 million a year earlier.
The result was slightly lower than Citi’s estimate of half-year profit of A$125 million.
In December, Tatts issued a surprise profit warning for its lotteries division at the same time it rejected a rival takeover proposal from a consortium backed by KKR and Macquarie Group.
Tatts shares have fallen by 7.25 percent since Jan. 1 because Tabcorp’s offer is primarily scrip-based. Tabcorp’s shares have fallen by 10.14 percent over the same period amid concerns about rising competition in betting from Crown Resorts’ CrownBet arm.
“The unavoidable truth when involved in corporate activity of this type is it does bring a large amount of distraction to any business,” Tatts Chief Executive Officer Robbie Cooke said in a statement.
Tatts on Thursday reported a 4.6 percent fall in first half turnover in its wagering division.
The merger with Tabcorp, which has yet to receive approval from the competition regulator, would result in an estimated A$130 million of annual cost savings from combining their betting arms. ($1 = 1.2972 Australian dollars) (Reporting by Jamie Freed; Editing by Chris Reese and Leslie Adler)