Tabcorp will spin off its lotteries and Keno arm as a separate ASX-listed business and has stopped short of selling its wagering operation.
The company on Monday said the demerger of lotteries was the fastest and most effective way to benefit shareholders.
Tabcorp has been reviewing its business and board members considered demergers and sales of operations.
The board has also chosen not to sell its wagering and media arm, which includes the TAB betting outlets and Sky racing TV and radio networks.
This was despite several suitors offering to pay about $3.5 billion.
Tabcorp chairman Steven Gregg said selling this arm would have required lots of third-party approvals as well as legislative change in NSW.
This would have meant extended time and uncertainty, he said.
The company said it remained open to revised proposals from bidders.
The lotteries demerger is expected to be completed by June next year.
Chief executive David Attenborough will leave the company after this time.
Shares were down 5.38 per cent to $4.92 at 1540 AEST.
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