Australian gambling operator Tabcorp Holdings has paid a £39.5m penalty to pull the plug on its UK-facing Sun Bets online sports betting business.
Last month, Tabcorp formally declared its intention to seek an early exit from its money-losing Sun Bets joint venture with Rupert Murdoch’s media firm News UK. Tabcorp warned at the time that it would likely be forced to ante up a significant sum to News UK for the early termination of its contract, which extended to December 31, 2019.
On Thursday, Tabcorp announced that it had agreed to pay News UK a £39.5m penalty and that the Sun Bets site would “cease trading in the coming days.” Tabcorp CEO David Attenborough said the plug was pulled after the company determined that a “material improvement” in Sun Bets’ performance was unlikely “over the next 18 months.”
Tabcorp and News UK announced their partnership in 2015 and the Sun Bets site made its debut the following year. But the site failed to catch fire with UK sports bettors and the site’s non-stop stream of red ink pushed Tabcorp to place the UK venture under review last October.
Counting the £39.5m penalty, Tabcorp said it expects to book an after-tax charge of around AU$71m (US$66.7m) in the fiscal year ending June 30, 2018, plus up to AU$10m in closure-related costs in fiscal 2019.
Attenborough gamely tried to claim that the experience had all been worth it, saying the company had “taken valuable learnings” from the debacle that would “inform our approach across our portfolio.” Attenborough also thanked the Sun Bets team for their spirited efforts and claimed the company retained a “strong relationship” with News UK’s parent News Corporation.
News UK is said to be undaunted in its faith in Sun Bets and is currently shopping around for another sucker, er, supplier to take Tabcorp’s place. UK-listed gambling technology provider Playtech – which was in the running to be Sun Bets original supplier before Tabcorp got the nod – has seen its name bandied about as a likely successor.
