Financial pressures force Entain Australia to disband Ladbrokes Racing Club

February 7, 2025

Financial pressures force Entain Australia to disband Ladbrokes Racing Club

Entain Australia, the owner of Ladbrokes and Neds, has reportedly announced the disbanding of the Ladbrokes Racing Club (LRC) due to increasing operational costs. This move comes at a time when the wagering sector faces mounting financial pressures, including higher product fees and regulatory scrutiny.

Rising costs as the primary reason

The Ladbrokes Racing Club was a scheme launched in 2023 that gave members an ownership-like experience of horse racing. LRC raced thoroughbreds, standardbreds, and greyhounds, offering fans an opportunity to interact with the sport in a different way.

Entain Australia has cited rising costs as the key factor in shutting down the LRC. The company faces increasing product fees and taxes within the Australian wagering industry, significantly affecting profitability.

In a recent report by THE AUSTRALIAN, Dean Shannon, CEO of Entain Australia, acknowledged these financial pressures. Shannon stated, “We are proud of Ladbrokes Racing Club and the opportunity it has presented to thousands of customers to experience a race day as an owner. Unfortunately, the Club is not immune to the rising cost of operating pressures currently affecting the wagering sector. The increasing product fees and taxes in Australia and the rising cost of racing have forced tough decisions regarding these extra initiatives. While the Club will no longer have a presence on the racetrack, our commitment to being a proud racing-first brand remains, with several new initiatives to be rolled out in 2025 for members.”

The inquiry into online gambling made by the Australian Federal Government influences the decision by Entain. Given the potential new regulations, the future financial outlook is uncertain for wagering companies.

The future of LRC’s racing stock

Even though LRC’s doors have finally closed, Entain has promised to stand by Australian racing with a commitment to invest tens of millions in sponsorships across all three racing codes. While Ladbrokes Racing Club will shut down in Australia, Entain has confirmed that the TAB Racing Club in New Zealand will continue to operate unaffected.

Negotiations with the AFL and financial implications

Entain Australia is in discussions with the Australian Football League over product fees. The AFL is looking for more significant money from betting companies beyond the 2025 season, adding to the financial burden.

Entain has other woes in the face of AUSTRAC, the Australian Transaction Reports and Analysis Centre, filing a civil case against the company with serious and systemic non-compliance allegations in the area of anti-money laundering and counter-terrorism financing. This legal battle only adds to Entain’s burden.

Entain Australia’s legal issues with AUSTRAC remain a critical concern. The regulator has accused the company of failing to implement a compliant anti-money laundering programme, leaving it vulnerable to criminal exploitation.

AUSTRAC’s CEO, Brendan Thomas, stated, “Entain did not develop and maintain a compliant anti-money laundering programme and failed to identify and assess the risks it faced. We are alleging this left the criminal exploitation.”