In its landmark partnership with Entain, TAB NZ gave a financial boost to registered sports throughout New Zealand. The 25-year deal started on 1 June 2023. The strategic partnering arrangement provides an upfront payment to TAB NZ for distribution. Entain, one of the world’s biggest sports-betting groups, guaranteed increasing minimum payments for the first five years.
Betting on horse races in New Zealand will provide increasing revenue to all kinds of sports.
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TAB New Zealand will maintain control over its gaming machines whilst Entain will become the operations manager for betting services. About 80 per cent of TAB NZ bets are placed on horse racing (thoroughbred and harness – horse and cart) and greyhound racing. Approximately 20 per cent are on other sports like football, cricket and basketball.
Trend and Stats Analysis to Speed Up
About one hundred locations under the TAB NZ banner will have facial recognition technology installed over the next year. As part of the pledge to increase revenue and safety, Entain promised to complete the fit-out of 400 TAB agencies. The program began in mid-2020, to combat underage betting and to identify problem gamblers. The technology is reportedly able to even see past disguises, like sunglasses and hats.
Entain has also purchased Angstrom Sports which specialises in data analysis and sports forecasting. Though Angstrom focuses on the US market, it is expected that they will utilise its technology and algorithms to assist operations in the other nations that they work in. The end of quarter three of 2023 will see the finalisation of the deal.
The Down-Low on the Deal
The strategic partnership between Entain and TAB NZ is to go for twenty-five years. Most importantly, Entain takes over the Wagering and Trackside Media businesses. It is expected that 5% of revenue will be spent on marketing. The company is certain of increased income as it increases efficiency, and even plans to open a digital sister company for betting.
From the first day of the agreement, each business entity will share Gross Revenue 50-50. However, Entain will be responsible for marketing and operating expenses. The group has managed to increase revenue from failing acquisitions in the past. Though increased efficiency and many operating changes are a given, no existing employees are allowed to be fired (or forced to retire) in the first two years. This is a big relief for workers who were at first uncertain when news of the deal leaked.
Key Terms of the NZ$160 million dollar deal includes Entain giving NZ$10 million up-front, directly to the racing industry (horses and greyhounds). This is seen as a coup for the 52 aging racecourses in New Zealand. Many look forward to the facelift to facilities around the country. While TAB NZ will keep the gaming revenue of machines and leases for the shops that have machines, Entain will still manage those locations for a fee.
A highlight for Entain and its shareholders was that TAB NZ has the only wagering license in all of New Zealand. Since organized racing began in NZ, control over wagering was a struggle between private bookies and the government. In 1910, TAB NZ became the sole legal wagering entity at racecourses throughout New Zealand. This monopoly could expand soon to the digital realm. Changes to internet regulations may see Entain payout NZ$100 million to the New Zealand government if geo-blocking goes ahead.
