Tabcorp has agreed to pay £39.5 million to its partner in the joint operation in order to be able to exit it a year ahead of the end of their original three-year contract. Sun Bets is expected to cease trading in the coming days after less than two years of operation.
Tabcorp said today that it expects to record a full-year loss of around A$91 million as a result from its exit from the Sun Bets business, up from from a loss of A$52 million it reported for the first half of the financial year. It also pointed out that an additional of A$10 million in costs would be recorded into its 2019 accounts.
The Sun Bets gambling website went live in 2016 after News UK and Tabcorp signed a three-year agreement that allowed the latter to use The Sun newspaper branding for the new operation. The Australian operator spent around A$14.4 million to create the gambling brand, but it never managed to turn into a profitable one. The company has previously said that Sun Bets recorded operating loss of more than A$23 million during the six months to December 31, 2017.
Tabcorp said late last year that it was reviewing the operation. Reports emerged last month that the gambling giant was seeking a speedy exit from the business, the confirmation of which arrived today.
’Piegate’ Scandal
Sun Bets offered 8-1 odds against the footballer finishing the whole treat before the game was concluded. It became known that Shaw was well-aware of the odds. He ate the whole pie before the end of the match, which the Gambling Commission considered intentional influencing of the betting market.
Commenting on Tabcorp’s decision to depart the struggling business, CEO David Attenborough said in a statement from today that Sun Bets has performed below expectations and that they do not expect any improvement in its performance over the next year and a half. The executive went on that while they did not make it right this time, they have learnt important lessons and that Sun Bets’ failure would not affect their interest in expanding overseas.
Tabcorp is currently focusing on its integration with rival gambling business Tatts Group. The two companies agreed to merge their operations late last year to create a business worth over A$11 billion and thus become Australia’s largest gambling operator. The enlarged group is looking to complete its integration in the next 18 months to two years.
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