Most bidders appear to have been shut out of the ACTTAB sale, with just three left in the running for the government-owned betting agency.
It is understood as many as 12 groups submitted expressions of interest in the TAB, including the big corporate bookmakers, but most were rejected this month, in what one industry insider called a sham process.
That leaves a shortlist of three, including the two big TAB owners - Tabcorp, which owns the former government TABS in NSW and Victoria, and Tatts, which owns the TABs in Queensland, the Northern Territory, South Australia and Tasmania.
Corporate bookmakers are unhappy and say the government will not get the price it wants from the TABs. While ACTTAB is tiny, the corporates, currently restricted to phone and internet banking, are keen to get a foot in the door of the TABs which have shopfronts and direct contact with punters.
The government is understood to be seeking about $30 million for the betting agency, but one source put its value closer to $10 million. The price will depend partly on how determined Tatts is to get a foothold in Tabcorp territory, given Tabcorp has the NSW TAB. It will also depend on how much the companies are prepared to pay for the local racing industry, staff and the groups to which ACTTAB donates.
The government subsidises local racing by $8 million a year. Treasurer Andrew Barr has indicated he is prepared to consider a lower price in return for more support for the industry, or vice versa, in his words: "So in one hypothetical scenario you could get a large capital sum as a one-off and a very small annual contribution to the racing industry, or you could in another theoretical extreme accept a very small payment for the business but a large annual contribution towards the racing industry."
It appears the TAB bidders have yet to see the detail of how this might work. More than one source questioned the process, which effectively ruled out all but big players, requiring bidders to demonstrate substantial revenues.
From this viewpoint, corporate bookmakers wasted time and resources on a process destined to favour the TAB owners.
"It was always going to be a TAB," one insider said, questioning why the government didn't simply state a preference for the TABs instead of running a "sham" call for expressions of interest.
Another reason TABs are preferred is that as a small player ACTTAB needs access to the big pools run by Tabcorp and Tatts. It is questionable whether Tabcorp and Tatts would be prepared to allow affordable access to their pools to a Canberra TAB owned by a corporate bookmaker.
But one snubbed corporate bookmaker said he was shocked that his group's expression of interest had not been taken further, in a process that looked to have nothing to do with getting the best price.
TAB betting is known ''pari-mutuel'', where all bets on a race are pooled, and once the TAB takes its cut, the pool is divided among winning punters. The TABs are named after the totalisators which calculate bets and winnings. The government passed laws this month ensuring only one totalisator licence would be issued in the territory - and it would be included in the sale.
Asked whether the government had a preference for TABs over corporate bookmakers as the buyer, the government Director-General of Commerce and Works, Megan Smithies, said: ''The buyer will need to be able to demonstrate that they can operate a totalisator, as ACTTAB is primarily concerned with offering pari-mutuel wagering.''
Asked whether including the corporate bookmakers had been unfair, she said, ''The government has deliberately embarked on an open process to give every interested party who considered they were suitable an opportunity to respond'', a process in line with advice from sales advisers Deloittes.
The government wanted a fair price, a sale by June 30, no negative impact on the racing industry, consideration for works, and a bidder with the necessary experience, capacity and integrity.
Employees are worried for their jobs, with union organiser Rudi Oppitz fearing at least half the 130 to 140 jobs would go under a new owner. While staff were entitled to redundancy, they could lose payouts if they were offered a job with the new owner that didn't suit their skills, or if they were offered a job but lost it in restructuring, he said.
Mr Oppitz pushed for a redundancy deal before the sale started, but said the government had knocked him back.
Mr Barr said the government would be seeking for staff to retain their jobs under existing conditions where possible, and bidders would be asked about staff plans and employment conditions.
The government is selling ACTTAB because of falling revenues and its inability to compete. It is also looking for money for big projects.