Racing minister Hon Kieran McAnulty comments on the decisions and future of New Zealand racing. Video / Dean Purcell
International betting agency Entain will take over running the New Zealand TAB in a deal that will inject hundreds of millions of dollars into horse racing and sport.
Racing Minister Kieran McAnulty announced his approval of the deal on Tuesday and it will see Entain take over the day-to-day running of New Zealand’s only betting agency for 25 years.
“This is one of the most significant days in New Zealand racing history. This deal will reverse falling revenues for racing and provides certainty over the coming years,” McAnulty said.
“I’m confident this agreement will help secure a solid future for the racing industry and sports in New Zealand through increased financial distributions to national sports organisations.
“Our racing industry is worth $1.6 billion to the economy and directly employs 14,000 New Zealanders. It’s reliant on TAB NZ distributions, and if they were allowed to fall that would hit the industry hard and jobs and revenue lost.
Kieran McAnulty making the announcement on the future steps and decisions regarding New Zealand Racing today in Karaka. Photo / Dean Purcell
The deal had to provide several guarantees before McAnulty approved it, one of the most crucial being no New Zealand jobs lost so all 460 fulltime TAB employees are guaranteed a job for at least the next two years.
The deal comes with a $150 million bonus for New Zealand racing and sports codes, the latter to be spread among the 38 National Sporting Organisations (NSOs) the TAB has agreements with.
The sports codes are big winners as they have paid nothing toward the setting up of the TAB but will receive $15 million over three years based on their sports percentage of the TAB turnover.
That includes turnover on overseas sports so today’s deal will see significant payouts to NZ basketball, soccer and rugby league, all sports that have high TAB turnover because of strong punter interest in their overseas competitions.
Of the $150m injection around $100 million will be distributed to New Zealand racing codes over the next five years on top of boosted returns guaranteed through to around $200 million in five years.
There will also be with money set aside for harm minimalisation, helping with problem gambling.
Part of the payment will also be retained by the TAB in reserve, a lesson in future-proofing they learned the hard way when Covid arrived in 2020, most racing and many sports halted, and the TAB almost become insolvent.
The racing code payout is crucial to securing the future of thoroughbred, harness, and greyhound racing as all three have struggled with escalating costs as the need for major infrastructure investment.
Their $100 million payment plus Entain’s guaranteed distributions over the next five years will provide racing with sustainable income and a path forward after TAB distributions plummeted this year.
Entain is based in the United Kingdom and operates, among other brands, the huge Ladbrokes betting agency but the NZ TAB brand, so familiar to many New Zealanders, will be retained.
The speed of what is being termed a strategic partnership, but is, in reality, more of an outsourcing of the day-to-day running of the TAB business, will shock many industry insiders, with Entain to officially take over that role from June 1.
Entain will bring international experience, scale and professionalism to the TAB which has struggled to fend off other major overseas betting agencies from poaching New Zealand punters, whose betting with other bookmakers was costing New Zealand racing and sports over $150 million in lost turnover a year.
Entain has also invested heavily in visual content in recent years and it is likely New Zealand racing will be more heavily promoted into Australia and overseas markets, boosting overall turnover.
Entain will clip the ticket on those bets but the overall turnover on New Zealand racing looks certain to increase.
The Racing Minister has also ensured the deal looks after New Zealand racing punters with the TAB’s ground-breaking Punters Promise, which guarantees punters to be able to back any horse to win at least $2000, likely to be retained.
That had concerned many punters as overseas bookmakers, particularly those based out of the United Kingdom, have often been quick to restrict or even ban punters who win consistently.
The TAB/Entain deal has something similar to Punters Promise written into it, meaning New Zealand punters will be no worse off under Entain and enjoy a world-leading guarantee of being able to actually place bets rather than be restricted from doing so.
While the $150 million sign-on bonus and guaranteed returns over the next five years are enormous injections for New Zealand racing and sport, there could be another major financial windfall coming.
The deal is believed to have provision for another payment of around $100 million if the New Zealand betting market is geo-blocked, meaning New Zealand punters can no longer bet with other overseas agencies.
That would create a monopoly for the TAB/Entain but geo-blocking will require legislative change that could be hard to make before the election.
The Minister gave his most public indication yet that geo-blocking is close to becoming a reality.
“I am also pleased to announce that Cabinet has decided an in-principle agreement to extend TAB NZ’s monopoly for sports and racing betting to the online environment, subject to further work being done,” said McAnulty.
“The TAB was set up as a monopoly to fund New Zealand racing and sports. But the onset of unregulated online gambling changed the game and our racing and sports industry has been losing money ever since.
“Regulating this environment offers a significant new revenue source for local racing and sport, while also addressing the inherent risks in unregulated online gambling.”
