If you know anything about finance it will be no news to you that gambling is a massive market worldwide. The UK is no exception with one of the fastest-growing segments being online gambling, which generated £1.45 billion for bookmakers in the five months between November 2014 and March 2015.
The big news there is that a new player is about to enter the scene – the well established Australia’s largest bookmaker Tabcorp, part of Tabcorp Holdings is about to team up with The Sun newspaper in an attempt to concur the british online gambling market.
The Sun online bingo is already a favourite destination for many players, with half the betting popularion on the island being regular readers of the tabloid and so loyal to it in their choise of gaming provider as well. The newly born Sun Bets is scheduled to be officially launched in half an year, with the Australian operator covering the software platform and products offered and the British operator – promoting the new site in its existing network.
Now let’s look at some numbers. Tabcorp declared a proffit of USD 240m last year, of which they will put in USD 20m to kickstart the new UK venture. As we mentioned above the UK market seems to be one of the most competitive in the field worldwide, with gambling revenues hitting GBP 3 biillion yearly and over 400 licensed operators.
From an investors point of view, this seems like a pretty safe move for Tabcorp as they won’t have to spend much energy (and so – funds) on establishing a completely new brand. The over 10 million weekly readers of the popular newspaper on the other hand will benefit from the improved betting platform and the tabloid will of course gain a lot from an extra revenue stream.
Some investor brokers however hold doubts. Analysts from Goodboy Stockbrokers have voiced concerns that USD 20m is by far not enough for a sufficient marketing campaign acoss various channels (tv, terrestrial and online). Another weak link can be the fact that in Australia casino style games are banned online, so even with it’s largest bookmaker status, Tabcorp has close to zero expirience in those, and they are a huge part of the UK online gambling market.
An issue can also become the unwillingness of Tabcorp to provide live sport betting online in it’s home market – the logic being that since the introduction of that service in the UK, racing gambling suffered as players shifted to betting online on other popular sports. Both The Sun and Tabcorp are assuring investors that the group is working on developing new range of high class projects and services and is ready to meet the highly critical and competitive new market. Predictions are that the new venture should be profitable within 5 years, so let’s wait and see.