Tabcorp Seeks to End Sun Bets Deal, Cites Piegate Flap

Tabcorp Seeks to End Sunbets Deal, Cites ‘Piegate’ Flap

Australia’s Tabcorp continues to press forward with its attempts to sever its Sun Bets branding relationship with the UK’s Sun newspaper.

Prominent Australian sportsbook Tabcorp seeks to end its SunBets branding deal with the UK’s Sun, part of Rupert Murdoch’s News UK empire, citing ongoing poor performance and continuing flak over the “Piegate” incident involving backup Sutton United keeper Wayne Shaw in an early 2017 FA Cup match against Arsenal.

Financial outlets have reported that the Aussie betting giant continues to negotiate with The Sun’s licensing group in an attempt to end the deal, which the two sides entered in 2016. Tabcorp has already issued an internal notice to its roughly 60 UK-based staff that it plans to exit the deal should it be able to negotiate an acceptable separation fee.

Tabcorp’s licensing deal with News UK for the Sun Bets branding rights involves a payment of more than £12m ($16m) per year, and Tabcorp could be on the hook for £30m ($40m) should it sunder the deal ahead of schedule.

Piegate flak, fine add friction

The February 20, 2017 Piegate farce involving Shaw also turns out to have a greater business impact than first recognized. Sun Bets put up a seemingly farcical wager on its board preceding the Sutton-Arsenal match, offering 8-1 that a “reserve goalkeeper” would eat an entire pie before the end of the game.

Sutton did just that, late in the 2-0 Arsenal win. That quickly caused a public relations storm in which the 45-year-old Shaw first denied knowing anything about the Sun Bets line, then switched his story and admitted he did.

Though Shaw’s in-game feast could not have had any impact on the match itself – Sutton had already used its three substitutions – the episode reeked of betting-market manipulation. Whether it was all in good fun was irrelevant. Shaw was fined £375 ($497) and suspended for two months, and later resigned from the team. On the corporate side, Tabcorp took a much larger hit as the corporate parent of Sun Bets, being assessed an £84,000 fine ($111,243) in April by the United Kingdom Gambling Commission (UKGC) for regulatory violations.

The UKGC penalty also cited another Sun Bets offering involving the likelihood of a streaker dashing across the pitch as a possible inducement to commit a civil offense, another no-no according to the UK’s gambling codes. In its settlement with the Gambling Commission, Tabcorp promised to improve its “risk assessment process”.

Bleeding red ink

Whether the Piegate incident caused additional financial damage to the Sun Bets brand or whether it was an ill-conceived concept designed to shore up an already money-bleeding idea isn’t quite clear, but either way, the Tabcorp/UK Sun hookup didn’t work.

Back in February, Tabcorp declared Sun Bets’s performance as “unsatisfactory” following the announcement of a £12.6m ($16.7m) operational loss in just the brand’s first six months in the market. Tabcorp also announced additional one-off costs exceeding £28m ($37m) in connection with the Sun Bets rollout.

News UK also expressed its own disappointment, aimed at Tabcorp, and the company hasn’t written off the Sun Bets concept just yet, even if Tabcorp wants out. As a News UK spokesperson commented to select British outlets: “The Sun is the number one newspaper website in the UK and we believe that this reach, and the power of its brand, still represent a great opportunity for readers to take a punt using Sun Bets. We will let customers know if there will be any change to the service.”

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