Tabcorp Contemplates Lawsuit Against Entain for Intruding upon its Market in Australia
Entain Struck a New Deal with the New South Wales (NSW) Australian Hotels Association (AHA) in Australia last October, a partnership initially marketed as a "business agreement". However, gaming company Tabcorp, with an exclusive contract with the AHA, is now contemplating legal action against Entain and the AHA following the announcement of the partnership.
Tabcorp, who asserts an exclusive claim over all 1,800 venues, stated that they might seek legal remedy after the Entain-AHA deal, with support from the NSW Supreme Court this week, as reported by the Australian Financial Review.
The next phase includes Entain and the AHA supplying Tabcorp with any documents related to the partnership on the command of the Supreme Court. With this information, Tabcorp can determine the best possible course of action.
Entain, facing issues with several gaming regulators, denies any misconduct. The partnership with the AHA allows them to advertise Ladbrokes and Neds brands in NSW pubs, despite Tabcorp's insistence of exclusive rights.
Entain Defends Its Actions
The NSW Supreme Court has ordered Entain and the AHA to grant Tabcorp access to documents that provide the legal foundation for their partnership. Upon review of these documents, if all communication is sufficiently surrendered, Tabcorp will be more prepared to fortify its legal claim.
Tabcorp suspects that Entain and the AHA may have breached the law with this arrangement but requires further evidence. At the very least, Tabcorp suspects that the AHA is not acting honestly, given its contract with Tabcorp.
The AHA, like Entain, denies any misconduct. They responded in writing to Tabcorp upon the revelation last October, stating, "It is still our stance that none of the plans announced by AHA NSW and Entain undermine Tabcorp’s retail exclusivity nor are they in violation of any laws."
The agreement allows Entain to establish "Ladbrokes Lounges" at selected AHA venues. Even though these lounges won't provide sports betting directly, Tabcorp alleges that they are an attempt to encroach upon its territory.
The company alleges that the lounges, as described by Entain, will provide "the best seats in the house for [the venue’s] Ladbrokes or Neds customers." In addition, Entain is willing to compensate a venue AU$5,000 (US$3,334) if its Ladbrokes Lounge generates betting turnover exceeding AU$1.2 million (US$800,160) annually.
Gaming Industry in Australia Thriving
Entain experienced an increase in its sports betting revenue in Australia, potentially spurring rapid expansion. Recent financial reports disclosed that Entain's net gaming revenue in Australia increased by 12% last year compared to 2021.
However, the improvement did not extend to all of the company’s operations. Entain reported an overall 88% decrease in groupwide profit, after taxes, totaling US$40 million, mainly due to reduced activity at BetMGM in the U.S.
Entain is also pursuing greater returns from the eSports sector. They announced this week that they had agreed to acquire Sportsflare, Tiidal Gaming’s eSports betting development division.
The deal is set to be worth US$13.25 million upon completion. For the deal to go through, Tiidal's board and shareholders must approve it, with a vote potentially taking place by the end of April.
The news positively affected Tiidal's stock. Trading on the Canadian Securities Exchange as TIDL went from $0.07 to $0.65 in a short span.
Entain, meanwhile, has witnessed a falling stock price. Its stock started trading on the London Stock Exchange at around £1,256 (US$1,523) this morning and had declined to £1,199 (US$1,448) by press time. This is following a drop from a March high of £1,399 (US$1,696) last week.
