Tabcorp Holdings will pay £40 million to exit its UK sports book Sun Bets joint venture with News UK, the company announced.
The venture began in 2016, but David Attenborough Group Chief Executive of Tabcorp said the Sun Bets never lived up to expectations.
“The performance of Sun Bets has been below expectations and we do not expect a material improvement over the next 18 months,” Attenborough said in an investor update. “As such, we have reached an agreement with News UK to exit the agreement. 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.”
The company placed Sun Bets under strategic review after a disappointing 2017 and began negotiations for an exit in June. Sun Bets has lost more than AU$135 million in less than two years, according to various reports.
In its corporate update, Tabcorp governance said it expects “significant costs items” in its interim report to increase to approximately A$91 million (£52 million), with the company absorbing Sun Bets exit payment during the forthcoming trading period, according to SBC News.
News UK said it remains confident in its brand moving forward.
“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,” the company said in a press statement. “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.”
