As a statutory entity and the sole holder of a betting licence in New Zealand, TAB NZ is committed to materially boosting the fortunes of racing and sport, delivering a world-class customer experience and enhancing its responsible gambling and harm minimisation efforts.

For some time, TAB NZ has faced increasing competition, rising costs, capital constraints as well as other challenges, which have impacted its ability to deliver adequate funding to racing and sports. These challenges are expected to increase.  

In order to achieve TAB NZ’s objectives and growth ambitions, Board and management considered that it was in the best interest of TAB NZ and its stakeholders to explore a strategic partnering arrangement with a world-class international wagering operator to deliver TAB NZ’s wagering and broadcast functions.

Over the past six months, TAB NZ has engaged with a range of world-class operators in relation to a strategic partnering arrangement and received several compelling proposals. It has been supported through the process out of Australia by Barrenjoey Capital Partners as sole financial adviser, Allens as principal legal advisers. Chapman Tripp provided legal advice in New Zealand.

Following a detailed assessment of a number of proposals which were received, TAB NZ has today announced that it has selected Entain as its preferred partner for a 25-year strategic partnering arrangement.

The proposed strategic arrangement remains subject to Ministerial approval. The specific terms of the arrangement remain commercially confidential until approval is granted.

Entain was selected as the preferred partner based on a wide range of criteria, including operational expertise, cultural alignment with TAB NZ and the commitment of the partner to uplifting TAB NZ’s harm minimisation and responsible gambling efforts.

TAB NZ Chief Executive Officer Mike Tod said today’s announcement signals an important step in boosting the fortunes of racing, sport and communities for a generation.

“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,” Mr Tod said.

“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. 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.

“Entain is a global and world-class operator who will deliver industry best practice and an elevated and safe experience for New Zealand punters, as well as racing and sports fans. We are deeply excited by their commitment to New Zealand and this opportunity.”

TAB NZ Chairman Mark Stewart said the Board is unanimously supportive of the proposed strategic partnering arrangement.  

“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,” Mr Stewart said.

Entain’s Chief Executive Officer - Australia, Dean Shannon, said the company was excited to be selected by TAB NZ as its preferred partner.

“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,” Mr Shannon said.

“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.”

Overview

• TAB NZ today announces that it has selected Entain as its preferred partner for a 25-year strategic partnering arrangement.
• The proposed strategic arrangement enhances the viability of New Zealand racing and sport, will materially boost the fortunes of both and has the support of key stakeholders, including the three racing codes and Sport NZ.  
• If approved by the Minister for Racing, today’s announcement will deliver a key recommendation from the Messara Report (2018) that was provided to the New Zealand Government as a critical change to support the long-term viability of the Racing industry.

Ministerial Approval

• The proposed strategic arrangement remains subject to Ministerial approval. TAB NZ and Entain look forward to working collaboratively with the Minister’s office in relation to the proposed strategic arrangement. 

Key benefits of proposed strategic arrangement with Entain

• Guaranteed funding to TAB NZ of greater than NZ$1.0 billion in the first five years to support the revitalisation of the racing industry with material upside over the life of the arrangement.
• Significantly strengthens the financial position of TAB NZ today by facilitating an upfront payment to racing and sports, in addition to an increase in future payments over time relative to TAB NZ’s current trajectory of funding reductions
• Additional and significant upfront payment should legislation be enacted that prevents unlicensed offshore operators from providing wagering services in New Zealand.
• Over the 25-year arrangement, the proposed terms have the potential to deliver a total uplift in payments to racing and sports of c.NZ$5.0 billion relative to the counterfactual of TAB NZ’s declining commercial performance due to intense international competition and historic under investment in the business in key areas like retail, technology, broadcast and operations
• Investment and uplift in TAB NZ’s harm minimisation and responsible gambling efforts
• A 24-month employment guarantee for TAB NZ’s employees, with new job opportunities for Kiwis as the New Zealand market and Racing and Sports industries grow
• A commitment to retain and refresh the TAB NZ brand
• A commitment to provide a world-class and industry best practice wagering, retail and broadcast offering to Kiwi customers as well as racing and sports fans
• Additional support to the Racing industry, including a NZ$10.0 million sponsorship of an enhanced racing carnival and the establishment of other community linked initiatives
• Strong racing and sports industries are expected to drive significant economic growth and see New Zealand communities, as well as the nation at large benefit materially, including the creation of new roles both directly and indirectly

About Entain

Entain plc (LSE: ENT) is a FTSE100 company and is one of the world’s largest sports- betting and gaming groups, operating both online and in the retail sector. The Group owns a comprehensive portfolio of established brands; Sports brands include BetCity, bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds, Sportingbet, Sports Interaction and SuperSport; Gaming brands include Foxy Bingo, Gala, GiocoDigitale, Ninja Casino, Optibet, Partypoker and PartyCasino. The Group owns proprietary technology across all its core product verticals and in addition to its B2C operations provides services to a number of third-party customers on a B2B basis.

The Group has a 50/50 joint venture, BetMGM, a leader in sports betting and iGaming in the US. Entain provides the technology and capabilities which power BetMGM as well as exclusive games and products, specially developed at its in-house gaming studios. The Group is tax resident in the UK and is the only global operator to exclusively operate in domestically regulated or regulating markets operating in over 40 territories.

Entain is a leader in ESG, a member of FTSE4Good, the DJSI and is AA rated by MSCI. The Group has set a science-based target, committing to be carbon net zero by 2035 and through the Entain Foundation supports a variety of initiatives, focusing on safer gambling, grassroots sport, diversity in technology and community projects. For more information see the Group’s website: www.entaingroup.com