Australian wagering giant Tabcorp on Thursday confirmed its exit from Sun Bets, its flagging UK online wagering business that it has been operating in partnership with News UK since 2016.<\/p>\n
In an ASX filing on Thursday, Tabcorp Holdings said it will make a payment to News UK to the sum of GBP 39.5 million to exit the agreement, adding that Sun Bets will cease trading in the coming days.<\/p>\n
The wagering giant first announced it was considering exiting the venture in October last year, after acknowledging that the venture has been performing lower than expectation, and subsequently launched a strategic review of the business.<\/p>\n
In June, Tabcorp said it had concluded its review and is now in discussion with News UK about a proposal to exit its agreement to operate Sun Bets.<\/p>\n
\u201cThe performance of Sun Bets has been below expectations and we do not expect a material improvement over the next 18 months. As such, we have reached an agreement with News UK to exit the agreement,\u201d said David Attenborough, managing director and CEO of Tabcorp.<\/p>\n
The CEO went onto to say that the company has taken valuable learnings from the Sun Bets start-up process, and thanked the staff at Sun Bets for their efforts in building the business.<\/p>\n
Tabcorp said it expects to record a significant item of approximately $91 million (after tax) in respect to Sun Bets in its financial statements for the year ended June 30, 2018, up from $52 in the 18H1 financial statements.<\/p>\n
The amount includes the exit payment to News UK. Tabcorp says it also expects to incur other closure related costs in FY19, up to approximately $10 million.<\/p>\n
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