TAB sale scratched indefinitely

The state government has abandoned long-held plans to sell the TAB for up to $1 billion after the front runner in an expressions of interest process pulled out last month.

New wagering company, Betr, was seen as the likely buyer ahead of Tabcorp or Ladbrokes owner, Entain.

Betr is backed by Rupert Murdoch's News Corp.

"After prudent and exhaustive efforts, it has become clear that agreement cannot be reached on terms that will ultimately be consistent with the government’s objectives to ensure the sale is in the long-term interest of both the state and racing industry," a statement read.

"In October 2021, after the initial sale process was halted due to COVID-19, at the request of Racing and Wagering WA, the government announced the commencement of a new sale process with a view to supporting an independently sustainable and competitive industry."

Expressions of Interest were sought from the market, which resulted in three respondents being accepted into a binding offer stage.

"Within the last month, the government progressed negotiations with a preferred respondent, who ultimately failed to confirm the necessary financial commitments to support its offer," the statement said.

A major component of any sale was to ensure the racing industry would be financially secure.

"Through the process it has become clear that the long-term interests of both the state and racing industry cannot be met from the current status of offers presented by respondents," the government concluded.

"On this basis, the McGowan government has decided to retain ownership of the WA TAB and RWWA will continue to operate the WA TAB to the benefit of the local racing industry."

Private equity firms Apollo Global Management and new Crown owner Blackstone had been among those offering to finance the deal on behalf of Betr before the bid was retracted.

RWWA said the the government announcement was disappointing.

"RWWA and the broader racing industry are disappointed that the sale of the WA TAB could not be concluded successfully," chief executive Ian Edwards said.

“The racing industry acknowledged that the time was right for the sale and was willing to embrace the new funding arrangements that flowed from it.”

The statement said strong revenue growth and careful financial management allowed RWWA to raise funding for all three codes of racing and provide the certainty of a three-year plan for participants as part of the 2022-23 funding announcement, which included an extra $30 million in recurring funding by 2025.

The increase to funding was the largest ever provided by RWWA in its 20-year history.