Gabling and entertainment provider and ASX 100 company, Tabcorp Holdings Ltd (ASX:TAH) has announced the signing of an agreement with News UK to embark on a new online wagering/gaming business within the UK and Irish markets.
The new business will be called ‘Sun Bets’, which will likely launch in 2016. News UK is a subsidiary of the U.S media corporation News Corp,
Sun Bets will take advantage of both Tabcorp’s ability in global wagering, along with News UK diversified customer base, high quality media assets (Sun newspaper), and their sports and racing products (Dream Team FC).
The partnership is arranged as a revenue sharing agreement, with News UK tasked with the internal and external media promotion operations of the business, where in return, Tapcorp provides News UK a share of the revenue each year.
Sun Bets will operate for an initial 10 years, with extensions being subject to positive performance. However, the agreement is dependent on Tabcorp being able to acquire the relevant licenses and regulatory approvals.
TAH’s CEO David Attenborough spoke confidently about the agreement: “Entering the UK market in partnership with News UK is an exciting opportunity for Tabcorp as we take our capability into the A$7 billion UK online gambling market. The Sun has more than 10 million readers per week and over 1 million football fans actively engaged through the Sun Dream Team FC fantasy football competition”.
Tabcorp recently provided a trading update for Q12016 announcing that group revenues rose 1.1% during the quarter compared to pcp. Total revenue was $543.5m for the period.
TAH last traded at $4.60, as at 11:10am, down 1.3% on the open as investors showed no signficant reaction to the announcement. However, TAH has gained nearly 12% year-to-date, which is ahead of the broader market.
Author: Simon Herrmann
Dec 10, 2015
Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.