Entain named TAB NZ preferred partner in boost to Oceania operations

Entain named TAB NZ preferred partner in boost to Oceania operations

TAB New Zealand (TAB NZ), the state-run agency with responsibility for overseeing regulated betting in New Zealand, has chosen Entain as its preferred partner.

The partnership between TAB NZ and the FTSE100 gambling group is still subject to Ministerial approval – which the duo are working together to secure – and will run for 25 years should this be received.

Specific terms of the arrangement have not been disclosed, but Entain’s main responsibility will be to produce and manage a wagering, retail and broadcast offering for Kiwi bettors, in support of TAB NZ’s remit of financially backing the country’s sports and racing scenes.

Mike Tod, TAB NZ CEO, said: “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.

“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.

“This proposed strategic arrangement with Entain provides a certain, material and immediate uplift in the funding TAB NZ can provide New Zealand racing and sports ensuring that these industries not only survive, but thrive.”

TAB NZ states that the main benefit of the deal will come in the form of material support for both New Zealand sports and racing, and added that it has the support of ‘key stakeholders’.

These stakeholders include the three codes of racing – gallops horse racing, trotting horse racing and greyhound racing – as well as Sport NZ, the state body which oversees all otherer sports such as rugby, football, cricket and boxing.

Entain was selected as the preferred partner of TAB NZ due to the firm’s operational expertise, commitment to ‘uplifting’ the TAB’s harm minimisation and responsible gambling efforts and its ‘cultural alignment’ with the agency.

Commenting further on the potential partnership, Tod added: “It will allow us to greatly improve our harm minimisation and responsible gambling efforts, and provides immediate job security and long-term job creation in New Zealand to the advancement of our nation at large.”

TAB NZ’s search for a strategic partner has takensix months – having identified a need to do so due to challenges such as increasing competition, rising costs and capital constraints – with support from Barrenjoey Capital Partners and Allens in financial and legal areas, respectively.

TAB NZ Chairman, Mark Stewart, remarked: “Management and the board ran a world-class and robust process that attracted the interest of some of the best wagering operators in the world and have delivered a result that will benefit all our stakeholders for a generation. 

“It’s a credit to our Chief Executive Officer and his team for the result they have delivered and to our stakeholders in Racing and Sport for the way in which they have supported this process.”

Again, although specific conditions of the partnership have not been disclosed, TAB NZ has stated what it believes will be the primary benefits of the agreement, projecting funding of NZ$1bn (€5.7m) for sports and racing in the first five years.

This has led to a 25-year estimation of NZ$5bn in funding, alongside a NZ$10m racing sponsorship and support for other community initiatives, a commitment to retain and refresh the TAB NZ brand, investment in the aforementioned harm minimisation and responsible gambling operations.

Lastly, TAB NZ has stated that its employees will be given a 24-month employment guarantee as job opportunities in New Zealand’s sports and racing sector open up in tandem with the ‘significant economic growth’ the industries are expected to drive.

Should the agreement be approved by New Zealand’s Minister for Racing, Kieran McAnulty, Entain will significantly expand its presence in Oceania, where its operations have predominantly focused on the lucrative betting market of Australia.

Entain is active in Australia via its Ladbrokes and Neds brands, and has hinted at trying its hand at sports media, although a recent hurdle was encountered when competitor Tabcorp went to court over its FTSE100 rival’s deal with the Australian Hotels Association New South Wales (AHA NSW).

Dean Shannon, Entain Australia CEO, said: “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.

“As the partner of choice for New Zealand, we have made a firm commitment to employment continuity for at least 24 months, with the team at TAB NZ essential to our future vision and growth of the market in New Zealand. 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 finalise the transaction.”

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