Australian gaming company Tabcorp affirmed today that it has been in talks to get a hasty retreat from Sun Bets, the joint venture it formed by UK newspaper publisher News UK two years ago. It’s believed that the ‘piegate’ episode as well as the ensuing UK Gambling Commission fine were among the explanations behind the Australian operator’s choice to consider withdrawing from the deal.
Tabcorp had signed an agreement with News UK to utilize the latter’s Sun newspaper branding to the launching of an online gambling website. The performance went in 2016, but continues to be struggling to turn a profit ever since its beginning .
Earlier this season, Tabcorp predicted Sun Bet’s functionality “disappointing ” and showed that the company recorded operating loss of A$23.5 million in the six months to December 2017. The business further pointed out that it lost over A$45 million during the 2017 fiscal year from the partnership it spent A$14.4 million to set back in 2016.
The arrangement between Tabcorp and Sun Bets was initially set to run during the end of 2019, but the Australian gaming giant said it has completed a review of its participation in the project and has been in talks with News UK about a potential early exit. According to sources knowledgeable about the ongoing talks, Tabcorp would likely pay £30 million (approximately A$53 million) to finish the partnership a year earlier.
Back in April, Tabcorp was fined £84,000 by the UK Gambling Commission to get Sun Bets’ participation in a marketing stunt that involved Sutton United book goalkeeper Wayne Shaw munching a pie during his group ’s FA Cup tie with Arsenal in February 2017. Sun Bets offered 8-1 odds against the participant eating the entire pie prior to the match ’s end.
It was understood that Shaw was aware of Sun Bets’ offer. He finished the pie, while the match was going on, that regulators branded as deliberate influencing of a betting market. Shaw resigned shortly after as the stunt gained him (and Sun Bets) quite some negative publicity.
A spokesperson for News UK said today that despite the ongoing struggles they consider the ability of this Sun brand could still turn Sun Bets into a thriving operation. It’s believed that the paper publisher has already started searching for a new partner to power its nascent betting business.
Valued at A$9.22 billion, Tabcorp is Australia’s largest betting operator. The business recently finished a high-profile merger with former rival Tatts Group to make a gaming behemoth amid rising competition and regulatory pressure in its national industry. The Sun Bets’ venture really represented Tabcorp’s foray into the UK gaming market, which stands at £13.9 billion according to the latest industry figures introduced by the UK Gambling Commission.
