Tabcorp seeks to end partnership with Sun Bets
Tabcorp is seeking to end its partnership with News UK early after its Sun Bets brand has incurred huge losses since launching in 2016.
Tabcorp has publicly confirmed that it is in discussions with Rupert Murdoch’s News UK, the group behind Sun Bets, to end the partnership early. Plans are yet to be finalised.
The deal was originally intended to last ten years and is worth around £12m per year for News UK, who received the payment from Tabcorp to use the Sun Bets brand. It is understood that News UK would seek a new partner to operate Sun Bets.
Ending the partnership early will be costly for Tabcorp, with sources suggesting a minimum repayment fee of around £30m will be required to exit the agreement, though there is a break clause for 31 December 2019.
Tabcorp supplies the software for the Sun Bets brand and had already opened a review of the gambling operator back in 2017, after financial records showed a £28m loss.
Poor financial performance continued into 2018 with Tabcorp publicly stating its dissatisfaction with Sun Bet’s performance in February 2018 after an operating losss of £12.6m.
News UK is also reportedly unhappy with Tabcorp as a partner and is has allegedly already began the search for a new partner. However, Tabcorp is also considering a new strategy to try to make Sun Bets more profitable, should that prove more cost efficient than ending the partnership altogether.
Financial woes were just half the problem for Tabcorp. Negative publicity was also heaped upon the brand after a February 2017 incident which eventually led to the group being fined by the UK Gambling Commission.
Sun Bets had offered odds of 8-1 that Sutton United’s substitute goalkeeper, Wayne Shaw, would eat a pie at any stage in an FA Cup fifth-round match against Arsenal. Shaw did eat a pie, leading to a fine and ban for him, with the media branding the stunt Piegate.
But an investigation into the legality of the bet by the Gambling Commission the following year ruled that Tabcorp’s stunt was contrary to legal requirements for novelty bets. Tabcorp was fined £84,000 and had new conditions added to its UK licence.
But the controversy didn’t end there. The inquiry found further failures from the brand, including another illegal novelty bet offered on whether a streaker would run onto the pitch at any point during the tie. Failures relating to self-exclusions from customers were also found.