Entain breaks Tabcorp monopoly on NSW pubs

The corporate bookie will be able to promote its Ladbrokes and Ned brands in more than 1800 venues around the state in a direct blow to its local ASX-listed rival.

Dean Shannon, Entain’s Australian chief executive

Entain, one of the world’s largest wagering companies, has struck a blow against local rival Tabcorp by clinching a sponsorship and promotion deal for its Ladbrokes and Neds digital betting brands in 1800 pubs and hotels across NSW.

Tabcorp will also face increased competition from another new entrant in the wagering market, with the Matthew Tripp-led BetR set to launch next week.

BetR is competing with Tabcorp and Entain for the $1bn West Australian wagering licence.

In NSW, Entain will be able to advertise its brands in Australian Hotels Association venues in competition with Tabcorp and sponsor pubs and hotels under a deal announced on Thursday.

Tabcorp, which has an exclusive licence to offer retail betting in pubs, clubs and its own outlets, will continue to have its betting terminals in NSW pubs.

The deal is a further change for Tabcorp, which has lost exclusive advertising rights to racetracks in Queensland in exchange for settling lawsuits and point of consumption tax changes as it tries to concentrate more on its digital betting offerings to punters such as its newly launched app.

AHA NSW claimed the deal would benefit its members financially and hit out at Tabcorp, which previously had an exclusive sponsorship arrangement that expired on October 1 with the pubs.

“For decades now, many NSW hotels have operated PubTABs for Tabcorp at a significant loss – primarily due to high Sky Channel and (electronic betting terminal) fees,” the association’s chief executive John Whelan said.

“In country NSW it’s even worse, with the majority of country pubs currently running their PubTAB at a loss. Today’s partnership with a world leader in Entain will finally give NSW hotels competition and choice.”

But Tabcorp hit back, saying that the “advertising agreement between AHA NSW and a foreign owned bookmaker” would only increase gambling advertising in pubs, but “do nothing to improve the customer experience”.

“We are disappointed, particularly given Tabcorp provided around $50m in fee relief for NSW pubs to manage the impact of Covid shutdowns,” a company spokesman said.

“TAB has the exclusive retail license in NSW until 2033 and we will work closely with the NSW Government to ensure that exclusivity is maintained and modernised, in line with community standards. This advertising agreement highlights that the current 25-year-old legislative framework needs to be reformed.”

Mr Whelan said AHA was supported Tabcorp’s exclusive retail licence arrangement in NSW.

“Retail wagering in our venues is extremely important, with NSW pubs generating about half the current national PubTAB turnover. Tabcorp has a long-term exclusive retail licence in NSW and, of course, we will continue to support TAB retail in-venue.”.

There are more than 1000 venues with PubTAB outlets across NSW, and they will not be able to install physical Entain wagering facilities. Hotels will not receive commission from Entain.

London-listed Entain is banking on attracting punters who bet on their phones while eating and drinking in pubs and hotels.

“While there is still value in more traditional cash retail wagering, there is a highly engaged audience of punters who like to go down to their local for a bet with their mates, and how they do that has evolved,” Entain chief executive Dean Shannon said

“This partnership recognises that evolution and is about offering choice for the benefit of AHA NSW members and their patrons. There is no reason why traditional cash wagering can’t coexist in a hotel, alongside an advertising sponsorship arrangement with Entain that promotes the digital offering of one of our leading brands,” Mr Shannon added.

Entain will also not be able to advertise on the exterior of the pubs, though it is likely to want to build lounge facilities emblazoned with Labrokes or Neds livery, as it has done at the Moonee Valley racetrack in Melbourne.

Mr Whelan said pub patrons had embraced non-retail online wagering via their phones.

“Our patrons are already exposed to advertising from corporate bookmakers on our pub TV screens, on the radio, in newspapers and on their phones,” he said.

“Increasingly people are choosing to bet on the races or the footy on their phones – not in the traditional retail environment.

“Today, most people betting on their phone in a NSW pub are placing a bet with Ladbrokes, Neds or another corporate bookmaker.”

BetR will launch next week in time for the Caulfield Cup, considered the first of the three biggest race weeks of the year in Victoria ahead of the Cox Plate and the week-long Melbourne Cup carnival, and The Everest at Sydney’s Royal Randwick.

Mr Tripp is launching BetR in a partnership with News Corp Australia – publisher of The Australian – Las Vegas-based Tekkorp Capital, and ASX-listed BetMakers Technology Group.

Entain has said its digital wagering market share in Australia is now about 20 per cent, behind only market leader Sportsbet – which claims to take close to half of online bets in the country – among online betting providers.

Tabcorp said its TAB brand had begun to improve its digital betting market share with its new app that was launched in time for the popular Victorian spring racing carnival. “The App has had an immediate impact with customers, delivering an 11 per cent increase in weekly active customers compared to the 6 weeks prior,” the Tabcorp spokesman said.

Entain also faces a recently commenced Austrac anti-money laundering investigation.