Racing Minister Paul Toole said officials from the state's betting regulator, Liquor & Gaming NSW, will review the deal which opens the door to more than 1200 registered clubs and their 6.7 million members for Melbourne-based CrownBet.

On Tuesday Fairfax Media revealed bad blood in the online betting industry over the way in which CrownBet beat off rivals Tabcorp, Sportsbet and Betting.club to stitch up a lucrative digital partnership that will encourage club patrons to sign up to CrownBet's betting app in return for loyalty rewards and cash-out facilities on club premises.

The digital deal is a significant blow to the TAB which provides physical outlets in clubs.

Controversy centres on the tender process in which a sports marketing consultancy Beyond Boundaries Group, owned and chaired former AFL boss Andrew Demetriou, recommended CrownBet as the winning bid.

Mr Demetriou is a board member of CrownBet and Mr Packer's Crown Resorts.

ClubsNSW and Beyond Boundaries have both acknowledged the potential conflict of interest but insisted Mr Demetriou took no part in the tender.

The NSW government, which oversees the clubs sector, was not required to approve the deal but a spokesman for Mr Toole said: "Liquor & Gaming NSW will examine the arrangements to ensure they are consistent with regulatory requirements."

The deal has angered certain senior figures in the club sector, with some large clubs likely to opt out of proceeding with CrownBet, Fairfax Media understands.

Questions have also been raised about the timing of the completion of the tender process because the Beyond Boundaries executive involved in assessing the bids, Andrew Catterall, signed on as chief executive of Racing.com months before the losing tenderers were informed.

Racing.com, which broadcasts Victorian thoroughbred racing, has a cornerstone live odds partnership with CrownBet.

ClubsNSW said Mr Catterall's involvement had wrapped up before he was awarded the job on December 8 but stories in The Age as far back as October identified him as the "frontrunner" for the job.

CrownBet appears to have been confident in its chances of success. On November 2, the company ran job ads gauging interest in the position of retail operations manager, saying the position would be "tasked with building effective relationships with an assigned group of stakeholders" and managing account managers.

An industry source said: "In the wagering game, 'retail' means clubs and pubs. It looks like they began building the team long before the decision."

CrownBet declined to comment but Fairfax Media understands the November call for expressions of interest was considered by the company to be precautionary to ensure it could quickly build a team to liaise with clubs. CrownBet will begin recruiting next week.

On Wednesday, ClubsNSW confirmed a group of chief executives from large clubs met with CrownBet before the decision was revealed.

"A group of club CEOs travelled to Melbourne recently to visit the CrownBet facility and receive a briefing on the digital wagering offer," said a spokesman.