Tabcorp Seeks Early Exit from Underperforming Sun Bets Following ‘Piegate’ Incident

Casino News Daily
Tabcorp Seeks Early Exit from Underperforming Sun Bets Following ‘Piegate’ Incident

Australian gambling company Tabcorp confirmed today that it has been in talks for a hasty retreat from Sun Bets, the joint venture it formed with UK newspaper publisher News UK two years ago. It is believed that the ‘piegate’ incident and the ensuing UK Gambling Commission fine were among the reasons for the Australian operator’s decision to consider pulling out of the deal.

Tabcorp had signed an agreement with News UK to use the latter’s Sun newspaper branding for the launch of an online gambling website. The operation went live in 2016, but has been struggling to turn a profit ever since its inception.

Earlier this year, Tabcorp called Sun Bet’s performance “unsatisfactory” and revealed that the business recorded operating loss of A$23.5 million in the six months to December 2017. The company further pointed out that it lost more than A$45 million during the 2017 financial year from the venture it spent A$14.4 million to establish back in 2016.

The contract between Tabcorp and Sun Bets was originally set to run through the end of 2019, but the Australian gambling 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 familiar with the ongoing discussions, Tabcorp would likely pay £30 million (approximately A$53 million) to end the partnership a year earlier.

’Piegate’ Implications

In April, Tabcorp was fined £84,000 by the UK Gambling Commission for Sun Bets’ participation in a publicity stunt that involved Sutton United reserve goalkeeper Wayne Shaw munching a pie during his team’s FA Cup tie with Arsenal in February 2017. Sun Bets offered 8-1 odds against the player eating the whole pie before the game’s end.

It was understood that Shaw was aware of Sun Bets’ offer. He finished the pie, while the game was going on, which regulators branded as intentional influencing of a betting market. The Football Association fined the goalkeeper £375 and banned him from any football activity for two months. 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 believe the power of The Sun brand could still turn Sun Bets into a successful operation. It is believed that the newspaper publisher has already begun 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 company recently completed a high-profile merger with former rival Tatts Group to create a gambling behemoth amid growing competition and regulatory pressure in its domestic market. The Sun Bets’ venture actually represented Tabcorp’s first foray into the UK gambling market, which stands at £13.9 billion as per the latest industry statistics released by the UK Gambling Commission.

The post Tabcorp Seeks Early Exit from Underperforming Sun Bets Following ‘Piegate’ Incident appeared first on Casino News Daily.

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