Entain in audacious play for Racing.com

The wagering giant wants to buy the Victorian racing industry owned broadcast service as a betting advertising crackdown by the federal government looms.

Gambling giant Entain Group is trying to buy Racing.com, in a move that would shake up the horse racing and sports broadcasting industries.

The audacious play would see Entain, the London-listed owner of the Neds and Ladbrokes brands in Australia, take control of Racing.com, which broadcasts Victorian and South Australian horse racing on free-to-air television via Seven West Media and on its digital channels.

Set up by the Victorian racing industry and now owned by Racing Victoria, Racing.com loses about $15m annually, and while Victorian racing bodies are coming under financial strain there has been some pressure to resist the Entain offer.

Though it costs money, Racing.com is seen by Victorian racing executives as a valuable product to promote its races and events and stimulate more betting on the sport that eventually leads to more revenue flowing to the industry.

Entain would see Racing.com as a valuable asset to have and a way to promote its brands as a federal government ban on betting advertising looms. It is likely that horse racing, which relies heavily on wagering for its income, would escape much of the proposed advertising bans.

Sources have confirmed that extensive discussions between Entain and Racing Victoria have taken place in recent weeks. Neither party would comment when approached by The Australian.

The talks have been taking place as ASX-listed Tabcorp, which will reveal its annual financial results on Thursday, has recently extended its own lucrative broadcast deal with rival Sportsbet.

Tabcorp earlier this month clinched a 10-year extension for its Sky Racing broadcast service to be carried on Sportsbet’s website and app.

The deal is worth up to $400m through to 2036, and is less per annum than Sportsbet – which has almost half the digital betting market share in Australia – is currently paying Tabcorp until 2026.

Sportsbet’s annual payment for Sky Racing rights, including exclusive rights for racing in NSW, is one of Tabcorp’s most important sources of revenue for its media arm.

Tabcorp also has been brokering a deal for the Victoria Racing Club’s Melbourne Cup broadcasting rights, including attempting to onsell free-to-air rights from 2024 onwards to Seven West Media or Nine Entertainment.

The VRC has agreed to a wider broadcast deal with Tabcorp that includes free-to-air, pay-television, digital and international rights. The federal government’s anti-siphoning list requires it to offer the Melbourne Cup to free-to-air networks.

Entain has been expanding media content on its app and website in the past year, including a series of clips and documentary-style episodes featuring popular retired jockey Glenn Boss, and a move for Racing.com would be a big move to further its wider broadcast aspirations.

In mid-August, Entain said its net wagering revenue in Australia was down about 2 per cent for the six months to June 30 compared with the previous corresponding period.

Having more broadcast vision rights would help stimulate more revenue for the company.

Entain’s global CEO Jette Nygaard-Andersen said in Australia the company had not increased its marketing spend like Sportsbet had and that the point of consumption taxes had hit its overall result.

The Ladbrokes and Neds owner is also leading the race for a joint venture with the Western Australia racing industry to run that state’s TAB.

As revealed by The Australian, investment bank Barrenjoey is running a process for the WA racing industry that could adopt a similar model that Entain is now operating in New Zealand.

The New Zealand deal is a 25-year strategic partnership, with Entain guaranteeing funding to TAB NZ of more than $NZ1bn in the first five years of the deal to support the revitalisation of the racing industry and a significant upfront payment.