Tab NZ, New Zealand’s racing and sports betting operator, has entered into a proposed partnership with Entain, a leading global sports betting and gaming company. The arrangement, subject to ministerial approval, aims to address increasing competition, rising costs, and capital constraints that have hindered Tab NZ’s ability to provide sufficient funding to the racing and sports industry. The strategic partnership with Entain is expected to strengthen Tab NZ’s financial position, support the revitalization of the racing industry, and enhance harm minimization and responsible gambling efforts. The proposed deal, which has garnered support from key stakeholders, holds the potential to deliver over NZ$1.00 billion in guaranteed funding to Tab NZ in the first five years and approximately NZ$5.00 billion over the 25-year period.
Challenges and the Need for a Strategic Partnership:
Tab NZ’s decision to pursue a strategic partnering arrangement with Entain stems from the escalating challenges it faces, including intense competition, rising costs, and limited capital resources. These factors have impeded Tab NZ’s ability to meet its potential and provide adequate funding to support the racing and sports industry. Recognizing the need for transformation and long-term sustainability, Tab NZ engaged with several operators over the past six months and ultimately selected Entain based on various criteria, such as operational expertise, alignment with Tab NZ’s values, and commitment to harm minimization and responsible gambling efforts.
Benefits of the Proposed Partnership:
The proposed partnership between Tab NZ and Entain is expected to yield numerous benefits for the racing and sports industry in New Zealand. The arrangement secures significant funding for Tab NZ, ensuring the industry’s growth and success. Key stakeholders, including the three racing codes and Sport NZ, have expressed their support for the partnership. Notable benefits include guaranteed funding of over NZ$1.00 billion in the first five years, with the potential for substantial increases over the 25-year term. Tab NZ’s financial position will be strengthened through an upfront payment and subsequent funding enhancements compared to the current trajectory of funding reductions. The arrangement also paves the way for investments in harm minimization and responsible gambling measures and prevents unlicensed offshore operators from offering wagering services in New Zealand.
Partnership Details and Commitments:
The partnership between Tab NZ and Entain extends beyond financial support. It includes a 24-month employment guarantee for Tab NZ employees and a commitment to retain and refresh the Tab NZ brand. Entain also plans to sponsor an enhanced racing carnival with a $10.0 million investment and establish other community-linked initiatives. The proposed partnership aligns with Entain’s vision for the future of Tab NZ, focusing on innovation, technology, and long-term commitment to all stakeholders in the racing, sport, and industry sectors. Both Tab NZ and Entain emphasize the importance of collaboration and obtaining necessary approvals to finalize the transaction successfully.
The proposed strategic partnership between Tab NZ and Entain represents a pivotal step in securing funding and revitalizing the New Zealand racing and sports industry. Tab NZ’s decision to seek a partner is driven by the need to overcome challenges and provide sustainable support amidst growing competition and financial constraints. With Entain’s operational expertise and shared commitment to harm minimization and responsible gambling, the partnership holds promise for the industry’s transformation and long-term success. The proposed deal, subject to approval, offers substantial funding guarantees, strengthens Tab NZ’s financial position, and facilitates investments in critical areas. By retaining and refreshing the Tab NZ brand, supporting racing events, and engaging in community initiatives, the partnership aims to enhance the wagering experience for customers and contribute to the growth of New Zealand’s racing and sporting sectors.