Australia ASX gambling group Tabcorp Holdings has entered discussions with News UK to terminate its involvement in the Sun Bets joint-venture.
Launched in 2016, the operating woes of Sun Bets have been well documented, with the Tabcorp-News UK joint venture reporting operating losses of AUS $46 million (£26 million) for FY2017 trading.
Last October, Tabcorp governance moved to place an underperforming Sun Bets ‘under strategic review’, as the ASX gambling firm merged with main Australian market rival Tatts Group.
“The review has concluded and Tabcorp is now in discussions with News UK about a proposal to exit its agreement to operate Sun Bets. These discussions remain ongoing and an agreement has not been reached at this stage.” details Tabcorp in its market update.
Although the joint-venture has a ten-year contract, it is believed that Tabcorp governance will trigger a pre-2019 termination clause, allowing the firm to end its UK business partnership.
As the brand lead, News UK is set to receive ‘termination fees’ from Tabcorp including a £1.5 million payment. Furthermore, Tabcorp will incur all costs attributed to winding down the Sun Bets business.
In its corporate update, Tabcorp informs that it has begun ‘collective consultations’ with Sun Bets 60 employees, in line with UK employment laws.
The termination of Sun Bets, sees Tabcorp end its UK market ambitions. Partnering with Rupert Murdoch’s News UK tabloid, Sun Bets aimed to leverage The Sun newspaper’s vast digital audiences towards online betting.
Tabcorp initially launched Sun Bets, under its proprietary in-house developed betting platform, seeking to replicate the UK success of established operators Sky Bet and bet365.
Nevertheless, from its initial launch, the Sun Bets platform faced a number of issues attached to scale and gaining market traction within the cutthroat UK online betting market.
