ANALYSIS | Why the WA TAB sale matters

The long-awaited sale of the WA TAB is finally reaching its crescendo, with the result likely to provide a major pointer to the future direction of Australia's wagering industry.

As any Western Australian is happy to tell you, they do things differently in that part of the country. So it has proven with the state’s decision to hold onto ownership of its TAB a decade or longer than the rest of the federation, who all opted to cash in their chips some time ago.

The process of getting what is reportedly a $1 billion-plus asset on the market has been painfully slow for its suitors, as well as those in the WA racing industry seeking certainty.

It was used as a political football for much of the past decade, prompting heated battles across the parliamentary chamber before legislation finally approved the sale in 2019.

However, while Tabcorp in particular was rubbing its hands as it looked to finally ‘unite the states’ in terms of its parimutuel and retail monopoly, the sale was put on hold in 2020. 

The WA TAB was used as a political football for much of the past decade.

Uncertainty caused by the Covid pandemic cited as the reason for the delay, but finally, this week, the bids are in. Unfortunately for Tabcorp, the two-year delay has meant it is a much more competitive market.

The wagering landscape in Australia has become a serious battleground for market share in the post-Covid era and what the WA government determines as its best offer is likely to set the scene for the short-to-medium term future of the Australian wagering industry.

Tabcorp has been a long-time front runner but comes into this process as a company in flux. It has recently been demerged as ‘New Tabcorp’, a media and wagering company, cut adrift from the more profitable lottery arm and handed a remit of remaking its own identity. On Wednesday, it confirmed in its annual results a 5.1 per cent drop in revenue in the wagering and media space, attributing that to the ongoing impacts of COVID late in 2021 and ‘a record number of (race) abandonments’ earlier this year.   

Tabcorp’s chief rival through the WA TAB process was always going to be Entain, which runs the Ladbrokes and Neds brands in Australia. Already entrenched with its credentials in the wagering space, Entain, which put forward a $3.5 billion bid for Tabcorp last year, has pushed itself into the media space in recent times.


Several new players have emerged in the Australian horse racing wagering landscape. (Photo by Getty Images)

That is significant because the third bidder is very much built on media credentials. Australia’s most powerful media company News Corp has joined forces with another media giant in Seven West as well as the ‘smartest man in Australian wagering’ Matt Tripp to put in its bid to buy and run the WA TAB.

The partnership of Tripp, the original mastermind behind brands Sportsbet and BetEasy, and News Corp has been well known for some time and they intend to launch a new wagering brand, reportedly titled Bet R, in the next few weeks, having recently purchased regional bookmaker Texbet for $10 million.

Newscorp has been building towards a wagering offering for some years, purchasing major online racing publishers Punters and Racenet, capturing an enormous share of the racing audience to which to market potential wagering services to.     

Seven West’s involvement may not have become apparent until late in the process, but it should be no surprise. The company has long ties to Western Australia through chairman Kerry Stokes and as the publisher of its main newspaper, the West Australian.

It was mooted as being interested in the WA TAB Sale five years ago, while it is a long-term broadcast partner for racing in Australia. One of the stated reasons for its initial involvement with was with a view to potential wagering opportunities.     

Seven West and Newscorp share a vision for the integration of media and wagering businesses, in an era which has witnessed significant change in both industries.

What a successful bid for the WA TAB would do is not only deliver the new partnership a foothold in the wagering space, but also provide a window to the acquisition of rights to run the totalisator, retail network and on course betting in Victoria.

Wagering rights will soon be up for grabs in Victoria. (Photo by Getty Images)

That decision is set down in the near future with the licence set to commence in August 2024 and will set the scene for the state of play in the wagering industry in Australia for the next decade. Expressions Of Interests closed last Friday. A defeat for incumbent Tabcorp in its Eastern Seaboard heartland could be the end of the company as we know it.

Media companies controlling the wagering space presents its own set of challenges for the racing industry. The industry has profited greatly from the level of competition in the wagering space, but the possibility of a media-backed behemoth rising from the ashes of another could prove more of an obstacle than an asset.

The possibility of a media-backed behemoth rising from the ashes of another could prove more of an obstacle than an asset.

Of course, this will depend on what further ambitions any News Corp/Seven West/Tripp consortium might hold. While there is ample commercial value in the Australian market, the revolution taking place in the United States as sports betting opens up state by state is a much greater opportunity, especially for Newscorp, which has such a foothold in the American media market.

Flutter, which owns Australia’s leading corporate bookmaker Sportsbet, is not involved in any WA TAB bid. It is already established as a global media and wagering brand and its ambitions seem to be at that global level with strong growth in the US.

That’s a timely reminder that the Australian wagering industry does not operate in a vacuum and competition for investment in a mature wagering market like Australia can not be taken for granted.

The WA government can take advantage for now, perhaps fortuitously in terms of timing, by getting a premium price for the sale of its TAB. But as stakeholders have been keen to remind them, you can only sell the farm once, and the future prosperity of the industry needs to be assured.

Whoever does win the day will certainly have the wind at their backs and success in the upcoming Victorian bidding process firmly in their sights.




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