That offshore leakage worsened during Covid when TAB agencies were closed for long periods and overseas operators lured New Zealand punters to their apps with betting promotions.
Should the TAB continue to lose customers to offshore betting — which includes products like online casinos which are not allowed here — then the TAB may no longer be viable within just five years, bosses claim.
That would be disastrous for the New Zealand racing industry which is already struggling to retain its elite human and equine stars as the Australian industry booms, while the codes here need significant financial injections to help with ageing infrastructure and participant training.
The most obvious way to stem the losses to overseas operators would be to block New Zealand punters from being able to bet with them, basically geo-blocking.
That would mean no one residing in New Zealand could bet with overseas operators and if they chose to bet on horse racing or sport they would need to do so with the NZ TAB.
That will peeve some punters because of reduced options but many countries do not allow their residents to bet with overseas-owned or operated bookmakers.
New Zealand doesn't have the same internet betting restrictions because the Gambling Act, passed in 2003, hasn't kept up with the pace of growth in internet-based gambling.
The TAB has been working with the Department of Internal Affairs and lobbying the Government to change the Act.
But racing bosses believe the pace of change, which is not guaranteed, is too slow.
"This is one of the biggest issues to ever face New Zealand racing," said New Zealand Thoroughbred Racing chief executive Bruce Sharrock. "If we continue to see money being lost offshore, we simply aren't going to have the money to improve or eventually even maintain New Zealand racing.
"If the Gambling Act, which is just not fit for purpose any more, isn't changed, New Zealand racing and even some sports are going to be in real trouble."
Both harness racing and greyhound racing bosses also support the geo-blocking proposal.
A new Gambling Act could see $100 million pumped back into racing and sport in New Zealand.
While racing, because of its higher turnover, is the biggest beneficiary of TAB profits, the TAB is also one of the biggest sources of income for many New Zealand sports, particularly those with high-profile overseas competitions like basketball and baseball.
The Weekend Herald understands changing the Gambling Act will be discussed at Cabinet level next month.
