Tabcorp takes Entain deal with NSW pubs to court

The ASX-listed wagering group is seeking documents around the agreement as it contemplates broader legal action, concerned the arrangement breaches licence rules.

Tabcorp has lobbed legal action against rival Entain

Tabcorp has lobbed a legal bomb at rival Entain Group, taking Supreme Court action over a deal that it believes may contravene its exclusive retail betting licence in NSW in a move that could result in a damages claim or injunction.

Entain, the owner of the Ladbrokes and Neds corporate bookmaker brands in Australia, had clinched a deal in October to advertise in Australian Hotels Association pubs and hotels across NSW.

Tabcorp has an exclusive licence to offer retail betting in pubs, clubs and its own outlets, and continues to have its betting terminals in NSW pubs as part of a deal lasting until 2033.

Entain’s agreement with AHA to promote and sponsor up to 1800 pubs and hotels in NSW was seen as dealing a blow to Tabcorp at the time the deal was clinched, but Tabcorp said late on Monday its concerns about the contract had failed to be allayed.

Tabcorp lodged legal proceedings in the NSW Supreme Court seeking preliminary discovery from Entain and the AHA’s NSW division regarding the terms of the deal, ahead of potentially taking further action.

“We have advised both Entain and AHA NSW that we are concerned that the proposed arrangements with Entain may, depending on all of the facts, raise a risk of contravening the Unlawful Gambling Act 1998 (NSW), Tabcorp said in a statement.

“Entain and AHA NSW have not provided sufficient information to Tabcorp on the Entain proposal in order for Tabcorp to decide whether to commence substantive proceedings against Entain and AHA NSW.

“Tabcorp has commenced the proceedings today in order to obtain further information to assist Tabcorp to decide whether to commence those substantive proceedings which would involve Tabcorp making a claim for damages or an injunction against Entain and AHA NSW.”

An Entain spokesman confirmed it had received legal documentation from Tabcorp’s lawyers. “It will take time to assess that documentation and offers no further comment at this stage,” the spokesman said.

The AHA had previously said the deal would benefit members financially and hit out at Tabcorp, which 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 when the deal was announced in early October. “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.”

At the time, Mr Whelan said AHA 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,” he said. There are more than 1000 venues with PubTAB outlets across NSW, and they will not be able to install physical Entain wagering facilities. Hotels are not able to receive commission from Entain. Entain is also not able to advertise on the exterior of the pubs, though it is likely to want to build lounge facilities emblazoned with Ladbrokes or Neds livery, as it has done at the Moonee Valley racetrack in Melbourne.

London-listed Entain was 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 when the deal was announced.

The AHA confirmed it had recieved the filings, but declined to comment furher.

Tabcorp shares rose 0.5c, or 0.5 per centto close at $1.05.