It has been revealed that News Corp quietly sold its shares in gambling startup Betr just four months after it launched, despite its $70 million investment into the burgeoning and bullish bookmaker.
Betr launched in October last year as a three-way partnership between News Corp Australia, Tekkorp and a consortium of investors led by Matthew Tripp. The nascent firm launched with incredibly long odds — up to 100-1 — on a variety of sporting events including the Melbourne Cup, AFL and NRL Grand Finals.
In November, it dodged a $50 million payout on the Melbourne Cup after favourite Deauville Legend lost. But it is now on the hook for a $40 million payout to punters — the largest in sports betting history — after the Panthers won their third consecutive NRL Grand Final.
According to sources close to Betr who spoke to the Australian Financial Review, News Corp’s relationship with the firm ended in February but ASIC filings had not been updated to reflect the change in ownership. A News Corp spokesman declined to comment.
Tripp, however, said in a statement that all the money had been paid to gamblers following the NRL Grand Final and Collingwood’s AFL premiership win and that it had a “clean balance sheet heading into spring”.
“While they’re no longer on our register, we’re appreciative of News’ initial and ongoing support of Betr, and they remain an important partner of ours going forward,” he added.
“We’re now in a position where we are focused on growth and getting to scale – with our eyes fixed firmly on M&A opportunities in a market that is becoming more challenging”.
The sources close to Betr said that the relationship with News Corp had soured and that gambling industry figures had taken comments from News Corp’s chief financial officer Susan Panuccio in February – that she did not expect the multimillion-dollar equity loss caused by Betr to be “the run rate going forward” – as a sign of its view on the start-up.
However, News Corp will continue its relationship with Betr as an advertising partner despite it offering no further financial assistance. When it launched last year, Betr received discounted rates to promote its platform on Foxtel.
News Corp’s decision to step away from Betr reportedly came following a directive from its New York headquarters and is unrelated to chairman Lachlan Murdoch’s desire to explore betting in the US.