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The collapse of the privatisation of Western Australia (WA) state’s TAB racing network means the wagering business will remain in public hands for years to come, but only after costs of A$3.5m ($2.4m) to the taxpayer, according to the state gaming minister.

Racing and gaming minister Tony Buti told parliament on Wednesday (November 16) that the termination of the market process came after “approximately A$3.5m to fund staff, legal, commercial and other consultancy expenses”.

“Unfortunately, by the end of the market process, we did not have the certainty required to ensure that the long-term interests of both the state and the racing industry could be met by the offers presented by respondents,” he said.

“On this basis, the … government has made the responsible and prudent decision to retain ownership of the WA TAB.”

The government announced earlier this month that the sale process of Australia’s last remaining public wagering interest had fallen through despite offers from Australia-listed gaming giant Tabcorp, Isle of Man-based Entain Group and News Corp-backed Australian bookmaking start-up Betr.

Betr pulled out of the race late in the day after the government designated it as a preferred respondent.

Betr “ultimately failed to confirm the necessary financial commitments to support its offer” of a reported A$1bn, the government said in a statement on November 7.

The remaining bids from Tabcorp and Entain also failed because they “did not provide the necessary financial return to proceed with the sale”, Buti told parliament on Wednesday.

Buti said the TAB will continue to be operated by Racing and Wagering Western Australia “in the state’s interests and for the benefit of the local racing industry”.

The failure to privatise the TAB after seven years of bipartisan political effort is attributable in part to the coronavirus pandemic, which shut down the bidding process in 2020 before rebooting it in October 2021.

However, former treasurer Mike Nahan said the TAB had suffered a decline in market share against interstate online gambling, and that both Liberal-National and Labor governments “waited too long, held the asset and it’s deteriorating in value”.

“What we should have done is, like the other states — much earlier than ten years ago — effect the sale” of the TAB, Nahan told the Australian Broadcasting Corporation.

“Now [we’ll] struggle to get an alternative owner, and we're going to struggle to fund the industry and the owners out of the proceeds of the ownership of the TAB.”

Nahan said that although markets evolve, “I don’t think the fundamentals of the deterioration of the value of the TAB in state hands will change".

“I think it's going to continue to deteriorate.”

Although maintenance of the status quo frustrates expansion plans for Betr and Entain, with Entain in particular suffering from other setbacks in the Australian market, local race clubs dependent on TAB funding expressed relief and looked forward to ongoing industry “certainty”.