Compiled from AGBrief, The Australian and Australian Financial Review

Betting giant Tabcorp will launch into British and Irish markets, tapping into a $7 billion online gambling industry, after signing an offshore partnership deal with News Corp’s British arm that could eventually spread to Australia. The deal, announced just under a month after Tabcorp ended  takeover talks worth $9 billion with rival Tatts Group, signals a first for Tabcorp as it looks to muscle in on a market dominated by its major global rivals including William Hill and Ladbrokes, which have aggressively pushed into the Australian market.

The new group, to be known as Sun Bets, will launch next year and will combine Tabcorp’s wagering capabilities with News UK’s customer base and market-leading media assets, including The Sun newspaper and associated sports and racing products.

The deal could lead to other collaborations between the two, including in Australia, where the two companies have had a long association.

Locally, News Corp publishes newspapers including The Australian, Herald Sun, and Daily Telegraph and owns half of subscription TV service Foxtel. The two groups have been in talks for months as News UK looks to diversify its revenue streams and Tabcorp looks to enter new markets in a low-risk way, without a high level of upfront capital.

“This deal with Tabcorp marks a pivotal moment in the digital transformation of the company, creating a world-class online sports book that will engage and entertain the betting public in the inimitable style of The Sun,” News UK chief executive Rebekah Brooks said. “The two powerful brands of The Sun and our Dream Team fantasy football competition already have incredible reach and 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.”

The agreement is structured as a revenue share arrangement with News UK undertaking internal and external media promotion of the business. In return, Tabcorp will provide News UK with a share of the revenue from the new business each year.

Tabcorp managing director David Attenborough said the partnership marked an exciting opportunity for the company to enter the British online gambling market. “The Sun has more than 10 million readers per week and over one million football fans actively engaged through The Sun Dream Team FC fantasy football competition.” Mr 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.”

The agreement is subject to Tabcorp obtaining the necessary licences and regulatory approvals and runs for an initial term of 10 years, with extensions subject to performance. Tabcorp manages several leading customer brands in Australia, including, Luxbet, Sky Racing, Sky Sports Radio, Tabcorp Gaming Solutions (TGS), and Keno, serving millions of customers every year.

Tabcorp has been applying pressure to its British-based rivals playing in the Australian online gambling space. The company’s submission to the federal government’s O’Farrell review into online gambling called for a civil-penalty regime for breaches of gambling law, with companies, directors and executives subject to fines.

Tabcorp’s submission focused heavily on British-based competitors William Hill, Ladbrokes and Bet365 over their use of betting systems that critics say breach the ban on in-play betting via the internet. Tabcorp’s submission also proposed tough measures against offshore bookmakers offering bets on Australian sport and racing, including placing executives of these companies on immigration watch lists and banning banks from processing their payments. And the submission sought fines for punters who bet repeatedly with unlicensed offshore bookmakers.  The O’Farrell led review is due to hand down its findings this coming Friday 18 December.