Entain was chosen as TAB New Zealand’s partner for the next 25 years.
Sports betting in New Zealand is about to undergo a major change. Entain, one of the global gaming giants, can record a serious achievement in its history. NZ Sports betting was the subject of a heated battle over who would acquire a monopoly on it. Entain is the favorite to win this competition as long as regulators give the green light to the deal. What will change if the deal goes through?
The Boost of Sports Betting in New Zealand
"According to the Australian Financial Review, Entain has been announced as the preferred candidate to sign an agreement and obtain a licence."
If Entain does end up acquiring NZ TAB, it will be a historic deal, firstly because it will turn the gaming giant into a monopoly in the New Zealand market and secondly because of the length of the deal, which is expected to be valid for 25 years. According to the Australian Financial Review, Entain, which owns the platforms bwin, Ladbrokes, Coral, and others, has been announced as the preferred candidate to sign an agreement and obtain a licence, being chosen ahead of Sportsbet and Tabcorp.
An official statement released by TAB NZ said: “In order to achieve TAB NZ’s objectives and growth ambitions, Board and management considered that it was in the best interest of TAB NZ and its stakeholders to explore a strategic partnering arrangement with a world-class international wagering operator to deliver TAB NZ’s wagering and broadcast functions“.
The new agreement was signed by NZ TAB and Entain on Monday. The licence is expected to receive approval from the ministry in the coming weeks. At the moment the deal only needs the signature of one person and that is Racing Minister Kieran McAnulty.
Mike Tod, CEO of TAB, argued the company's decision: “Tab NZ faced an uncertain future in a David and Goliath battle with international wagering operators and a lack of capital to both compete and meet its potential.” And added: “Today’s announcement is a significant milestone toward the transformation of Tab NZ and those who rely upon its growth and long-term success. (...) In the absence of a strategic partnering arrangement, Tab NZ would be further cutting distributions in the next financial year”.
NZ TAB is the company that controls NZ sports betting, including on horses and greyhounds. In the last few years, however, NZ TAB has been experiencing difficulties and has not been able to generate the revenue it expects. This necessitates the inclusion of outside intervention to counter the proliferation of offshore sports betting opportunities trying to gain a foothold in the country. All of this has led to a battle between some of the biggest names in the industry to take control of NZ sports betting.
The Importance of the Deal for TAB New Zealand
When the deal goes through, New Zealand's racing industry is expected to receive a boost in development. Before the agreement was signed, Entain pledged to invest at least NZ$1 billion over the next five years. The value of the deal is confidential with only NZ TAB hinting at the funds to be spent.
“We applaud TAB NZ for how the process has been run to date and we look forward to working with all stakeholders on necessary approvals to finalize the transaction.“, stated Dean Shannon, the CEO of Entain in Australia.
The deal is expected to be a springboard for generating more revenue for racing in New Zealand. Both companies claim that with the inclusion of Entain in the sports betting market, there will be the potential for even larger financial investments. For example, Entain has committed to providing an additional NZ$10 million to sponsor an increase in race festivals, as well as develop more programs related to local communities.
“This is a unique opportunity to shape the future wagering experience for customers and to support New Zealand’s racing and sporting industries. (...) We have a compelling vision for the future of TAB NZ, which includes a renewed focus on innovation and technology, and a long-term commitment to all racing, sport, and industry stakeholders”, said Shannon.
If the Racing Minister gives the green light to the deal, it means that Entain will become a monopoly, but also that the gaming company will be involved in the performance of certain tasks. First, Entain must abide by the rules of responsible gambling. Second, it must make capital investments and retain all TAB employees for the next two years. In the event that the government passes new legislation to block geolocation, Entain will have to step in to prevent offshore sports betting from entering the country.