Sun Bets to close as Tabcorp terminates contract
Online operator Sun Bets is to close its operation after Tabcorp has confirmed it has pulled the plug on its contract.
Tabcorp announced the news to the Australian stock market yesterday. The Australian operator, who has funded Sun Bets together with News UK, will pay a £39.5m settlement fee to exit the contract early.
Customers have been assured by Sun Bets that their funds are safe and will be returned as soon as possible.
News that Tabcorp were eyeing an early exit from the deal surfaced in June, when the group confirmed it was in discussions with News UK, the group behind the Sun Bets brand, about ending the partnership early, largely due to the poor financial performance of the brand.
As a result of the hit, Tabcorp expects to incur full year losses of $91m after tax, along with around $10m in extra costs.
Tabcorp CEO, David Attenborough, confirmed that the poor performance of the site has been a key factor in the decision, saying:
While we didn’t get it right, we have taken valuable learnings from the Sun Bets start-up process and operations which will inform our approach across our portfolio. I would like to acknowledge the Sun Bets team for their efforts in building the business from start-up phase. We continue to have a strong relationship with News Corporation.– David Attenborough, Tabcorp CEO
Sun Bets was launched in 2016, with the deal bringing together News UK’s customer base and media assets with Tabcorps technology and expertise in online gambling. However, the brand has performed way below expectations from the start.
For News UK, the challenge now is to find a new partner to supply the technology for the Sun Bets brand. Rumours suggest that Playtech is a favoured operator.
Nevertheless, Sun Bets is likely to be offline for around six months as the search for a new technology partner continues.
In a statement, News UK, said:
The Sun is the number one newspaper and digital news brand in the UK and we have launched many successful brand extensions such as Sun Bingo and Dream Team. We are increasingly confident in the reach and power of the brand and will firmly remain in the betting and gaming business. We now look forward to executing our vision.– Statement, News UK