TAB NZ Signs Operational Deal With Entain

TAB NZ has been looking for a new strategic partner for months. After a heavy competition, the search is over. Last week, Entain was announced as the new partner for TAB NZ. The 25-year deal will see the company retain all current employees for the next two years.

Entain to Take Over TAB NZ Operations

Last week, TAB NZ announced a deal with Entain that will see the UK gambling giant take over day-to-day operations for the next 25 years. Entain will provide significant funding to the struggling operator, with more than NZ$1 billion available in the deal’s first five years.

TAB NZ has been struggling in recent years. This is due to a combination of rising expenses, increasing competition from local and offshore operators, and capital constraints. The company decided that the best course of action was to contact top-tier gambling operators to help the company stay competitive.

Multiple bidders were involved in the process, including both SportsBet and Tabcorp. Ultimately, Entain came out on top. TAB NZ pointed to the company’s cultural alignment, organisational expertise and commitment to helping TAB NZ in its responsible gaming efforts. Entain currently operates Neds and Ladbrokes in Australia.

Another main reason Entain secured the contract is that the company was willing to meet TAB NZ’s goal of retaining employees. All of TAB’s 450 employees will be guaranteed jobs for at least two years per the agreement. This provides a level of job security you seldom see in takeovers or buyouts.

Deal Could See Over $5 Billion in Payments

The deal will see significant benefits to TAB NZ and the racing industry as a whole. For starters, the agreement will potentially deliver increasing payments to sports and racing of up to $5 billion. This is significantly greater than what TAB was expecting to deliver. There will also be an upfront payment from the company to sports and racing organisations in the state. Additional payments will come over time.

Next, Entain will invest heavily into uplifting the responsible gambling and harm minimisation efforts from TAB NZ. Geo-blocking is presently not utilised in Australia. However, should the government pass legislation to allow it, Entain will provide a sizable upfront payment to help facilitate this. Geo-blocking would prevent offshore companies from offering services in Australia.

Lastly, Entain agrees to conduct a $10 million to sponsor an enhanced racing carnival. Entain has a track record of conducting major sponsorships for racing clubs and major races through Ladbrokes and Neds.

According to TAB NZ CEO Mike Tod, “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.”

Deal Needs Ministerial Approval

The new deal still requires the approval of Racing Minister Kieran McAnulty. However, that approval may be a formality, thanks to the terms of the agreement. One of McAnulty’s key concerns was job retention for TAB NZ. With the deal guaranteeing all jobs at the organisation for the first two years of the agreement, this should easily meet this concern.

The agreement will also meet standards for harm minimisation and safeguards to prevent money laundering. Unless something is missing that we are overlooking, it should be a simple approval process from the Minister.

This new deal will help make TAB competitive in sports betting and racing for decades to come. It also provides another significant accomplishment for the UK gaming giant, further cementing its status as one of the world’s top gaming providers.