Tabcorp, the large Australian gambling operator, has reported a loss for its last financial year of £51m ($67m). The company also announced that the bookmaker it launched alongside The Sun newspaper, called Sun Bets, would be scrapped, having performed poorly in the less than two years that it was in existence.
Reasons for this decision
Trading at Sun Bets was officially closed on July 19, and there was a message on the platform telling customers to withdraw all funds from their accounts immediately. Customers were assured via email that their funds will be safe and are not going to be compromised.
The first inkling that there was an issue with the performance of Sun Bets came in October 2017 after Tabcorp discussed the disappointing performance of the betting platform since its launch in 2016. The company said it was conducting a strategic view of the business to see what direction it might take to change its fortunes or to decide if closure was the better option.
While Tabcorp implemented some changes in the following months, it made little to no difference and ultimately it was decided to close up shop.
As a result of backing out of the agreement, Tabcorp will have to pay The Sun £39.5m ($52m). The agreement was supposed to run for ten years.
David Attenborough (not that David Attenborough), the chief executive of Tabcorp, acknowledged that Sun Bets had failed, but said the company had learned some valuable lessons. He said: “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.”
Customers were told by email that, if their funds have not been withdrawn from their accounts by August 2, the platform would automatically try to return the funds to the card registered to the account in question.
If this does not work, it will make further efforts to get into direct contact with the account holder. This is an assurance that the customers’ money will be kept safe, which is to expected because both Tabcorp and The Sun are well able to meet their obligations despite the failure of the Sun Bets platform.
If any funds cannot be withdrawn despite the above processes, money in the accounts will be donated to the gambling addiction organization Gamcare after September 17.
Sun Bets had been sponsoring the Cheltenham Festival’s Stayer’s Hurdle race through a three-year deal that would end following the 2019 version of the race.
It is unclear what will happen with this sponsorship next year. It is likely that another brand of The Sun could step up to take this sponsorship opportunity rather than simply closing the agreement.
Sun Bets had also been a key sponsor of the all-weather championships. Talking about the closure of Sun Bets, an Arena Racing Company spokesman said: “Our contractual obligations with News UK remain unaffected and we look forward to working with them on delivering the remainder of our agreements under one of the News UK brands.”
It appears that The Sun will continue its relationship with the leading software provider for online gaming, Playtech, as it operates the continuing Sun Bingo and there could be a future relaunch of Sun Bets.
Why did Sun Bets fail?
There were over 300,000 users registered with the Sun Bets platform during its two years of operation, but there were many signs that it was struggling as a business. A reset in June 2017 resulted in a number of redundancies and changes in the company’s leadership.
As a result of its agreement with The Sun being ended, a loss of £51.4m ($67.6m) will be recorded for the period. There will also be further costs associated with winding up the company.
Perhaps one of the last straws for the Tabcorp team when it came to Sun Bets was in April, when the Gaming Commission reviewed the license and Sun Bets was hit with a penalty of £84,000 ($115,000). This penalty came as a result of offering odds that the substitute goalkeeper for Sutton United would eat a pie (which he did) during the team’s FA Cup clash with Arsenal in February. Odds of 8/1 were given.