Tabcorp Heads to Supreme Court Over Entain’s NSW Deal

Australian gambling giant Tabcorp has filed a lawsuit with the supreme court, one against Entain and the Australian Hotels Association.

Tabcorp launched legal proceedings with the Supreme Court of New South Wales against online casino giant Entain and the Australian Hotels Association. Tabcorp is angry with the Australian Hotels Association’s NSW division after it failed to disclose sufficient info about a recent advertising deal in the state.

The Aussie gambling Goliath filed with the Supreme Court on Monday afternoon. The Australian gambling giant wrote to both parties, voicing its concerns that the deal “may raise a risk of contravening the Unlawful Gambling Act of 1998.” Tabcorp’s retail wagering arm has exclusivity in NSW’s pubs and clubs, or so it thought. The group extended its deal for 20 years in 2013, but it looks to count for nothing.

Entain, owners of the online poker site PartyPoker, put pen to paper with NSW hotels last month. Their deal enables NSW pubs and clubs to advertise Ladbrokes and Neds without breaking the terms of Tabcorp’s exclusivity agreement. It is not difficult to see why Tabcorp is enlisting the help of the Supreme Court.

Supreme Court of NSW May Not Get Involved

The Supreme Court may not get involved in the case. Many see Tabcorp’s filing of a lawsuit as flexing its muscles and forcing Entain to disclose more information. However, if Entain does not provide the info Tabcorp wants or that info is different from what Tabcorp wants to hear, it could launch a full lawsuit seeking damages. In addition, asking the Supreme Court for an injunction against the two parties is possible.

Entain signed a deal with NSW hotels in October 2022. Dean Shannon, Entain Australia’s CEO, stated the agreement is designed to give people more choices.

“There is no reason why traditional cash wagering can’t co-exist in a hotel alongside an advertising sponsorship agreement with Entain that promotes the digital offering of one of our leading brands.”

The London Stock Exchange-listed Entain offers online slots and casino games globally but not in Australia. Entain only has online sports betting in the Australian market.

Neither Tabcorp of the Australian Hotels Association has commented on the Supreme Court’s involvement. However, shares in Entain fell 3.25% on the London Stock Exchange, so a statement is likely incoming.

Tabcorp Losing Ground to Rivals

Tabcorp is losing ground to its rival, particularly those offering online betting. It recently announced it is considering giving pubs and clubs free access to its Sky Racing channel. Tabcorp hopes the move will help claw back market share from its rivals, although it comes at the cost of $50 million.

The wagering giant charges approximately $12,000 per annum to stream Sky Racing. Almost 4,900 pubs and clubs across the country stump up the cash. However, some venues are questioning the value of the service because high-profile horse races are often available on free-to-air.

The other company named in the Supreme Court filing, Australian Hotels Association, is against charging for Sky Racing. Chief Executive Stephen Ferguson claims 40-60% of AHA members stream Sky Racing at a loss.

“Not that the racing industry pays much attention to us, but we’re a massive part of their supply chain and allowing free-to-air channels to stream events like the Melbourne Cup means we’re disadvantaged.”

By December, Tabcorp is removing the Sky Racing fees for venues in the ACT, Tasmania, and Queensland. It eliminates fees for the other states using a staggered system. Although the move comes with an estimated cost of up to $50 million, Tabcorp will not be out of pocket by that much. Analysts estimate Tabcorp a $30 million annual windfall is on its way to the gambling giant. Queensland is due to ratify its point of consumption tax this week. Budget papers who $30 million heading to Tabcorp annually by 2024.