Australia's leading bookmaker, Tabcorp, announced this week that it will be launching its new Sun Bets platform within six months. This will be the group's first venture into the UK online gambling market which is reportedly worth #3 billion (A$ 5.9 billion) a year.
Last year, Tabcorp said it would be teaming with The Sun newspaper to provide a gambling platform and products for this iconic British brand. The Sun will promote the joint venture and, in return, Tabcorp will provide its parent company, News UK with a share of the revenues from the new Sun Bets platform.
The chief executive of Tabcorp, David Attenborough called it a "natural step" for the Australian group.
"We have worked with News Ltd closely in Australia and built up a high degree of trust," he told the Financial Times. "They have one of the strongest brands in the UK with half of the UK betting population regularly reading or engaging with The Sun."
$20m to Launch UK Venture
It was reported that Tabcorp will be spending $20 million over the next year to get its new UK venture off the ground. The group made $334 million in pre-tax profit last year.
Analysts believe that the new Sun Bets platform has a good chance of surviving in the UK's highly competitive online gambling market, where 427 licensed operators offer their games and products.
In a note written by Bank of American Merrill Lynch analyst, Mark Bryan, he said that The Sun has significant readership and targets the working classes. As such, he believes that The Sun "is an excellent platform for a wagering operation."
One of the main advantages for Tabcorp in this deal is that it won't need to be spend time building up a new brand - it will simply be improving an iconic brand with new products.
One Million Football Fans
The Sun's readership is no stranger to betting and bingo. The brand already runs a successful Sun Bingo online gaming unit, while over one million football fans play in its fantasy football competition. Tabcorp is expected to target these players, among others.
Sun Bets will provide in-play betting in the United Kingdom and will continue to create a range of new products to suit the UK market.
"We already have a lot of expertise but there is also a lot of expertise currently on the market in the UK due to mergers between Paddy Power and Betfair and Gala Coral and Ladbrokes," said Attenborough.