Media magnate Rupert Murdoch is muscling into the UK’s lucrative £3.5 billion ($5.1 billion) online gambling market with the launch of an online sportsbook called Sun Bets.
Australian billionaire Murdoch, whose The Sun is the UK’s bestselling newspaper, is teaming up with leading Australian sportsbook Tabcorp to launch Sun Bets.
Tabcorp and News UK – the parent company of The Sun and part of News Corp, which publishes the likes of the Wall Street Journal and the New York Post– will share the revenues, and News UK will promote the business.
Aside from The Sun, it can also use The Times and The Sunday Times to promote Sun Bets, allowing it to communicate with millions of potential customers from a broad demographic.
Tabcorp CEO David Attenborough said: “This partnership provides us with the opportunity to create a leading online bookmaker in the UK market under the Sun Bets brand over the coming years and fits with our strategy of pursuing close-to-core international opportunities.”
Most of its operations will focus on sports wagering and racing. The agreement between News UK and Tabcorp will last for a decade, and it can be extended if Sun Bets performs well.
Tabcorp employs 3,000 people in Australia and manages leading brands including TAB.com.au, Luxbet, Sky Racing, Sky Sports Radio, Tabcorp Gaming Solutions and Keno, serving millions of customers every year.
It has the resources to make a big splash in the UK market, which is lucrative but very crowded.
It is in the process of heavy consolidation at the moment, as Paddy Power is due to merge with Betfair and Ladbrokes is merging with Coral.
The combined Paddy Power Betfair group is expected to control around 18% of the market, rising to 20% as it pools resources and expands.
That would make it the UK’s leading bookmaker, ahead of current number one William Hill, which has 15% of the market. Ladbrokes Coral would also become slightly bigger than William Hill.
Bet365 also commands a large chunk of the online market, but beyond the top four or five bookmakers, no single operator has a share higher than 2%.
Even still, if Tabcorp could seize a 1% share it would be worth £35 million ($53 million) a year.
It is an interesting move from Tabcorp. It is the leading operator in Australia, but has seen its market share eroded by the likes of Paddy Power and William Hill moving in, and it recently had to refute claims from Paddy Power that the Irish bookmaker had overtaken it Down Under.
Now it is landing in Paddy Power and William Hill’s backyard and taking them on in their main market.
It will benefit from The Sun’s market position as the newspaper already has a million football fans signed up to its Dream Team fantasy football game.
News UK CEO Rebekah Brooks said: “I have every confidence that this will be a rewarding partnership, which will see Sun Bets firmly established as a key player in the online betting business.”
Sun Bets will launch in 2016 with a dedicated website, subject to Tabcorp obtaining licences and regulatory approvals.