Entain Plc has significantly bolstered its presence in Oceania following the approval of its strategic partnership with TAB NZ by the New Zealand Minister for Racing.
TAB NZ had chosen Entain to serve as ‘preferred partner’ to provide technology systems for the management of Racing New Zealand’s (Racing NZ) wagering, retail and broadcast offering on 28 March.
Partnership terms have been agreed for a 25-year arrangement in which Entain will pay a total consideration and be rewarded on an ongoing gross profit share arrangement for wagering services offered to TAB NZ, which include servicing two wo linear broadcasting channels and approximately 500 retail venues
As previously disclosed, Entain has made a commitment to make a payment of NZ$260m (approximately £132m, of which NZ$160m (approximately £81m) is payable in 2023.
Dealmakers anticipate that the agreed profit share plus pledged payment will guarantee a minimum of NZ $1b in funding for the first five years of its new arrangement.
Subject to conditions of completion, the strategic partnership is expected to commence on 1 June 2023. Dean Shannon, CEO of Entain Australia, commented: “We are delighted and honoured to have received Ministerial approval to finalise the strategic partnering agreement between TAB NZ and Entain Australia.
“We believe this 25-year strategic partnering arrangement will be a game-changer for sports betting in New Zealand and we are pleased that it will help provide significant financial benefits to the three New Zealand racing codes and the vast array of national sporting organisations.
“We look forward to connecting further with the great team at TAB NZ to introduce a range of new world-class products, services and player safety tools to the loyal TAB NZ customer base.”
In a separate announcement, the board of TAB NZ confirmed that Mike Tod will step down as CEO of the wagering business after securing its ‘generational deal’.
Tod will be replaced by General Counsel Nick Roberts, who will take charge of TAB NZ from 1 June and lead the transformation of the business working alongside Entain.
The transformation will see TAB NZ management focus on maintaining its statutory duties. These include “legislative obligations, monitoring the regulatory and commercial performance of Entain, exploring further commercial opportunities with Entain, and working with the Government on reforms to New Zealand’s online gambling laws”.
As Incumbent CEO, Roberts commented: “We have secured a generational change in the fortunes for racing. It is now up to the leaders across the racing industry to seize this opportunity and deliver a sustainable operating model over the next five years, and give customers a world-class product and experience.
“Entain have demonstrated a significant commitment to New Zealand racing and sport, and to TAB NZ’s 250,000 customers who will benefit from an improved experience and global-leading harm minimisation tools that TAB NZ would not otherwise have been able to bring to market.”