What will Sun Bets 2.0 look like?

It would be fair to say not too many sports bettors mourned the death of Sun Bets in July, as News UK shuttered its struggling sports betting brand. Sun Bets was operated by Tabcorp, yet the Australian wagering giant cut its losses by paying a £39.5m fee to exit the agreement with News UK after the operator underperformed for 18 months and recorded an EBITDA loss of more than £20m for FY2017.

Tabcorp CEO David Attenborough said at the time: “The Sun Bets opportunity was about entering a large, growing and well-regulated market with an established partner in News Corp, with whom we still maintain a strong relationship. However, the business did not meet our targets and we made the decision to exit.” By all accounts the split was an amicable one, but Tabcorp didn’t hang around to pick up the pieces. Bernadette McLoughlin, Tabcorp’s UK executive director, is back in Australia already and in charge of wagering in New South Wales and the Australian Capital Territory.

News UK is still in London, and while re-launching a sports betting brand is hardly the number one priority for a business responsible for printing the biggest national newspaper in Britain on a daily basis, they say that the quicker you get back on the horse, the sooner you forget the fall. So where can Sun Bets go from here? News UK remains committed to growing its betting and gaming arm by adding a sports betting product to fill the gap in its portfolio somewhere between online casino Sun Play and the steadily improving Sun Bingo.

A magic number

According to News UK’s betting and gaming director, Tom Ustunel, the company is exploring three options. The first would be to relaunch Sun Bets with a different operating partner, and one with a proven track record in the UK market. Sun Bets is likely to remain an interesting proposition for well-known sportsbook providers like Kambi and SBTech, although the obvious choice in the race is Playtech.

The London-listed supplier has an existing relationship with News UK as the operator of Sun Bingo. The relationship has endured many a hardship, yet it seems to have withstood the test of time. The five-year deal got off to a rocky start in 2017, with performance much lower than expected due to the slow migration of VIPs and the habitually quieter summer season.

“We believe it will be mutually beneficial for all parties involved to find a joint way forward” – Mor Weizer, Playtech CEO

The contract was described as challenging by Playtech CEO Mor Weizer who indicated that future efforts would concentrate on the visuals of Sun Bingo, including the way the brand is marketed to The Sun’s audience. “We are in a constant strategic discussion about how the product should look and how Sun Bingo should be presented going forward,” said Weizer. “We are very focused on the marketing and CRM capabilities of Sun Bingo but also how the brand comes across to the outside world, considering the audience they appeal to.”

Ustunel told EGR Intel that the brand was “keen to move forward” after a rocky start, adding: “We have listened to our players and feel that with the strength of the Sun Bingo brand and Playtech’s product and expertise in the bingo market, we can achieve our goals.”

This appears to have done the trick with Playtech’s bingo business, now run by former Gala Bingo brand director Angus Nisbet, rising by 47% to €25m last year. Weizer said the Sun Bingo contract was “heading in the right direction” and “improving all the time”, and confirmed Playtech’s interest in securing a supplier deal with Sun Bets should it relaunch.

“News Corp is now looking at alternative partners for the Sun Bets part of the business and our negotiations reflect that,” said Weizer. “Given the nature and status of these negotiations, we believe it will be mutually beneficial for all parties involved to find a joint way forward and continue growing the business. We are absolutely looking at Sun Bets. Obviously, there is no certainty that we will become partners or whether we will be able to conclude that conversation, but the discussions about Sun Bingo and Sun Bets are heading in the right direction,” he added.

From bingo to betting

Several City analysts have told EGR that a deal between Sun Bets and Playtech is extremely close, with Playtech eager to announce an agreement sooner rather than later. The sticking point, though, is reportedly Playtech’s history of annual minimum revenue guarantees on Sun Bingo and other ventures – clauses which have hurt Playtech’s business in other key areas and probably kept Tabcorp hanging on to Sun Bets for longer than they ideally wanted to. There is also less wiggle room for Playtech at present, with Weizer and the executive board under growing pressure after issuing two profit warnings in the last year and facing a potential challenge from influential hedge fund investor Jason Ader.

One analyst says: “The idea is that guarantees won’t be extended at all because that is what is killing Playtech at the moment for £30m or so. They have three years’ worth of guarantees which roll off at the end of next year, but if they take Sun Bets on, those guarantees will not be extended. It seems to be News UK dragging their heels in terms of making decisions.”

This stance was reiterated by Eilers & Krejcik Gaming analyst Alun Bowden, who wrote: “With Playtech reportedly failing to meet the minimum revenue guarantee on Sun Bingo, taking on the betting brand can be seen either as giving itself the best chance of getting out of a hole, or buying a larger shovel. Because if it thought UK bingo was tough, then sports is another level up.”

And this brings us neatly to Ustunel’s second option, which is quite simply to do nothing at all. News UK could decide to draw a line under Sun Bets and file it away as a learning curve (and a decent money-spinner) that didn’t quite work out. Nobody would blame them for shelving the project, especially when you consider the criticism that could surface should the brand fail in its second iteration.

News Corp and News UK has more than enough money-making assets to concentrate its efforts on. Sun Bingo and Sun Play in gaming, the hugely popular Dream Team in fantasy football and leveraging assets like The Sun newspaper, with a daily readership of 1.7 million, as well as the biggest commercial radio station in the UK with talkSPORT.

Businesses don’t progress by standing still, however, and the third option is for News UK to dip its toe in the waters of sports betting with the launch of Sun Racing. Sun Racing would be the UK version of News Corp’s Punters.com.au, the most popular horse racing affiliate website in Australia. News UK was keen to hire a head of Sun Racing when Sun Bets was still live, and the job description read: “The vision of Punters and The Sun is to make Sun Racing the leading horseracing affiliate site in the UK. Punters is awaiting the right person to strategically implement an expansion plan in partnership with The Sun digital universe, leading a team of product experts and social media-savvy journalists to create and drive the best horseracing website and app in the UK market.”

The successful candidate would report to Punters CEO Ben Bloomfield, which could surely risk the kind of Aussie/UK cross-country communication breakdown that contributed to Tabcorp pulling out of Sun Bets. But if the bookies were to open a market called ‘What next for Sun Bets?’, the smart money would be on a full relaunch, only this time with a tried and tested supplier with UK market experience. And with Sun Bets no longer reliant on Tabcorp’s propriety technology, what could News UK do to help this hypothetical sports betting brand?

Ustunel claims the Sun Bets team learned some harsh lessons last year, not least as a result of the infamous marketing stunt that ended with then-Sutton United goalkeeper, Wayne Shaw, devouring a meat pie during a cup tie against Arsenal. Sun Bets offered a pre-match market on Shaw to eat a pie on the sidelines during the game, and according to several sources, the player took it upon himself to indulge punters while indulging in the meat-and potato-filled snack.

The Sun Bets marketing team reportedly wanted to ride the scandal out and turn the controversy to the operator’s advantage – Paddy Power-style – by offering free pie vouchers to every reader of The Sun. But Tabcorp and News UK’s legal team reportedly ruled out the idea as the company was in the middle of discussions with the UK Gambling Commission (UKGC), which eventually resulted in a hefty fine for “failing to manage the risks associated with novelty bets”.

Brand identity

Now free to decide its own destiny, Ustunel hopes that Sun Bets, should it make a comeback, can rekindle the mischievous marketing initiatives that appeal to The Sun’s British audience. Over lunch, Ustunel shows EGR an Instagram post by Stormzy. The rapper has uploaded a video of Sun Bingo’s TV advert, slamming the rap-parody fronted by Bristolian comedian Jayde Adams for cultural appropriation as it supposedly takes the mick out of rap music.

“This is the kind of thing we need to be doing,” Ustunel affirms. “Starting a Twitter beef with Stormzy would be great coverage for us. He obviously isn’t the target audience for Sun Bingo, but it would create a bit of a stir on social media.” And he’s right. A Twitter bust-up with Stormzy is exactly the kind of buzz that Sun Bets was missing, as demonstrated by its misguided episode with goalkeeper Shaw.

The danger in practicing these kinds of faux-controversial social media posts is that there are hordes of punters waiting behind their keyboards to call you out as a Paddy Power copycat. The Irish operator has seemingly monopolised the online world of memes and social media banter, and it can be fairly easy to see through an operator trying to recreate the same humour.

“People keep talking about Sky Bet as the benchmark. But people forget that it took them the best part of 15 years” – Tom Ustunel, News UK

Yet there are certainly lessons Sun Bets can learn from Sun Bingo. The advert that Stormzy hates runs before and after ad breaks during The Jeremy Kyle Show, with News UK demonstrating an understanding of its audience by advertising to a demographic likely to read The Sun. This makes sense. So why didn’t this happen with Sun Bets? “Sun Bets,” says gambling marketing guru Harry Lang, “launched in 2016 and spent a rumoured £10m in year one across TV, print and billboard advertising, not to mention a significant PPC, digital display and affiliate push, but that spend was misdirected, and not supported by News UK.”

And the cross-selling question is exactly why News UK is in no rush to relaunch Sun Bets, or “dragging their heels” according to city analysts. There is not a simple solution for getting Dream Team players, The Sun readers and talkSPORT listeners to sign up and bet with the same brand. It does not work like that and it never has. “People keep talking about Sky Bet as the benchmark,” says Ustunel. “But people forget that it took them the best part of 15 years. It is a slow process and they have [CEO] Richard Flint,” he adds.

Despite its poor showing first time round, Sun Bets has not necessarily lost the good will of punters. When Sun Bets shut down, the operator reportedly paid out all open bets as winners, which is a nice touch. If Sun Bets does indeed return, leaving the heavy lifting to a supplier and concentrating its efforts on improved marketing and cracking the cross-selling conundrum, it just might be in the UK sports betting market for the long haul. But the odds are certainly stacked against that happening.