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Entain Group has taken over the operation of New Zealand’s TAB racing and sports-betting monopoly in a 25-year deal worth a minimum of NZ$900m ($550m) in the first five years, in addition to a substantial sweetener if lawmakers support a geo-blocking regime.
Entain began formal operation of the New Zealand TAB on Thursday (June 1) after securing its deal with the government last week.
The announcement of the deal on May 23 followed a battle with Flutter’s Australian arm Sportsbet and Australia’s Tabcorp Holdings for preferred partner status, which Entain gained in late March.
The deal delivers operational stability and revenue predictability, according to the government, with the taxpayer and Entain sharing gross profit equally. Entain also guarantees annual payment to the government of NZ$150m for the first five years.
“This is one of the most significant days in New Zealand racing history,” racing minister Kieran McAnulty said in a statement on May 23. “This deal will reverse falling revenues for racing and provides certainty over the coming years.”
Karl deKroo, Entain’s executive director of stakeholder engagement, confirmed to VIXIO GamblingCompliance on Friday that Entain will pay an additional and immediate NZ$100m ($61m) to the government “should legislative change be implemented to geo-block offshore providers”.
Prospects for those changes and the NZ$100m sweetener are looking good, with McAnulty flagging “greater controls” over access to foreign gambling websites in tandem with his Entain announcement.
“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 [legisative] work being done,” McAnulty said in a statement, without mentioning the additional Entain payment.
"Regulating this environment offers a significant new revenue source for local racing and sport, while also addressing the inherent risks in unregulated online gambling.
"By prohibiting online gambling outside of the TAB, the government can place greater controls over the betting environment.
“We would expect to also see much more money allocated to harm minimisation, a fairer deal for Kiwi punters and sports codes and a greater focus on animal welfare."
New Zealand media reported on Tuesday (May 30) that the government is consulting on payment blocking options for credit cards and other global services, in an acknowledgement that geo-blocking is not a foolproof strategy.
But officials are also considering the criminalisation of using “unauthorised gambling sites”, a step that neighbouring Australia has refused to take.
The Entain deal includes guarantees for not just revenue but also the retention of 450 jobs for two years and unlocks a NZ$5m allocation from the TAB for gambling harm minimisation.
"Entain has better harm minimisation technologies, such as facial recognition tools that can be rolled out in TAB venues,” McAnulty said.
The Entain deal was finalised with little obstruction, although objections from political voices and activist groups continue.
Problem gambling activists and media outlets have pointed to high-level regulatory scrutiny and substantial fines imposed on Entain in the UK and Australia, for example, with New Zealand’s Problem Gambling Foundation assailing Entain’s “raft of regulatory failures”.
Former racing minister and deputy prime minister Winston Peters called the deal “too good to be true”.
“What you’ve got is the statements being made that it’s all great and all good but we are losing control of a critical part of the industry, namely the TAB, and we will do for 25 years,” he told reporters.
“The real question is: has this company lost all its mojo? Why can’t we do these things ourselves like we used to do in so many other areas and used to do here as well?”
The transfer of control to Entain on Thursday saw TAB New Zealand CEO Mike Tod step down in favour of TAB general counsel and chief transition officer Nick Roberts.
TAB chairman Mark Stewart told New Zealand radio that Roberts has particular “experience and deep knowledge of the legislative settings in New Zealand”.
