Australian-based betting agencies, many with UK parent companies, have directly targeted New Zealand’s biggest punters to lure them away from the TAB, with turnover of over $150 million a year lost to offshore betting operators on sport and racing alone.
That hugely impacts the returns to New Zealand racing and sports as overseas agencies pay far smaller fees for the rights to bet on New Zealand events.
That, along with increased operational expenses from the TAB and a slowdown in turnover that had spiked during Covid-19 lockdowns, means the TAB has struggled to match forecast returns to the racing industry, let alone have the capital for expansion.
Those inside the TAB and racing codes fear without partnering they will struggle to grow or even maintain turnover as well as remain competitive in an increasingly digital marketplace.
Exactly which TAB operations would be taken over by a strategic partner will be key details in the three proposals, but indications are all three agencies are targeting taking over the majority of the TAB’s operations.
That could include bookmaking (setting of odds), trading of odds, technology, broadcasting, retail outlets and internal finance and executive roles.
Having those run by another operator could enormously cut TAB costs, potentially boost the customer base and see the TAB offer services not currently available to its customers.
Most importantly the right partnership is forecast to increase returns to New Zealand racing and sport by hundreds of millions of dollars over the next two decades.
The New Zealand TAB must, however, remain as a statutory entity with its own board, which will be charged with distributing profits back to the racing codes and New Zealand sporting bodies. It is believed the proposals all guarantee there will be no forced job losses from the TAB’s 450 fulltime employees in the first 12 months, and in a surprise twist, with New Zealand’s unique time slot in the global betting marketplace, the partners could actually look to boost the number of jobs based in this country.
Once the TAB board has received the proposals they will use the expertise of Australian financial firm Barrenjoey Capital Partners for a deeper analysis of the offers.
But ultimately any partnership will have to be signed off by Racing Minister McAnulty. as under the Racing Act 2020. the TAB needs his approval to partner with another organisation.
The minister has said factors he will consider are whether any partnership will allow the TAB to fulfil its statutory obligations, while he will seek information on what effects a partnership would have on New Zealand jobs.
TAB chief executive Mike Tod has confirmed to the Herald the proposals are expected this week and will come from three agencies after extensive negotiations, but stopped short of naming the agencies.
All those privy to the negotiations are silenced by Non-Disclosure Agreements but Herald sources suggest if a deal is signed, the first boost to returns to the racing industry and sporting bodies will happen within months.
Importantly the proposals are not contingent on geo-blocking being introduced to stop New Zealand punters betting overseas, which is being investigated but will require legislative change so would be highly unlikely to be passed before this year’s election.
THE FUTURE OF NEW ZEALAND BETTING
** The New Zealand TAB is this week receiving proposals from three overseas betting agencies to run its day-to-day operations.
** Any deal would need the approval of the Racing Minister, Kieran McAnulty.
** It is believed the proposals include assurances of no job losses in the first 12 months.
