Entain chosen as partner to acquire management rights to New Zealand’s sports betting monopoly

Dean Shannon, CEO of Entain Australia.

2023-03-28

New Zealand

Reading time 2:03 min

Sports betting giant Entain announced Tuesday it has been selected by TAB New Zealand as its preferred partner for a 25-year strategic arrangement. The company beat Tabcorp to become the preferred partner to acquire the management rights to New Zealand’s sports betting monopoly.

The proposed strategic arrangement, and timing of completion, remain subject to approval from the New Zealand Minister for Racing. Further information, as appropriate, will be provided after the completion of the Ministerial approval process, said Entain.



Tabcorp was also under consideration.

Key terms of the strategic deal include a 25-year-long arrangement. Entain agreed to make payments of up to $160 million. Subject to Ministerial approval, $99.8 million is payable in 2023, with the balance subject to passing of certain legislative amendments.

The arrangement also covers ongoing gross profit share, plus payments above, to result in minimum guaranteed funding to TAB NZ of over $624 million in the first five years of the arrangement.

As reported by the Australian Financial Review, TAB NZ chief executive Mike Tod said the selection of Entain was “a significant milestone towards the transformation of TAB NZ and those who rely upon its growth and long-term success”.

"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," he added.

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," he stated.

The Australian Financial Review reported Entain was expected to have offered the highest bid, although its proposal will be clouded by investigations launched by the Australian Transaction Reports and Analysis Centre into potential breaches of anti-money laundering and counterterrorism financing regulations.



Former Racing NSW chairman John Messara

The semi-privatization in New Zealand follows a review run by former Racing NSW chairman John Messara, an ex-stockbroker who operates the Arrowfield Stud north of Sydney, which recommended significant changes to how the industry in New Zealand operates. The Messara report was commissioned in April 2018 by the then-New Zealand racing minister Winston Peters.

It concluded that, “due to its lack of scale, [TAB NZ] will not be capable of providing a best-in-market offer to meet its customer needs, as it will be unable to sustain the level of ongoing capital investment required to remain competitive with other international wagering operators of scale."