Posted on: March 27, 2023, 07:46h.
Last updated on: March 27, 2023, 07:46h.
Global gaming giant Entain is about to lock in a massive victory. After a heated battle for control of New Zealand’s NZ Tab sports betting monopoly, the company emerged a winner, provided regulators greenlight the deal.
In a historic agreement lasting 25 years, Entain, which owns wagering platforms Ladbrokes, Neds and others, is set to acquire NZ Tab. It has been named the favored applicant for the license ahead of Sportsbet and Tabcorp, according to media outlet Australian Financial Review.
The license is pending ministerial approval, which could come this week. NZ Tab and Entain signed the new agreement today and now only need Racing Minister Kieran McAnulty’s signature to complete the transaction.
Kiwi Betting Gets A Boost
NZ Tab, which controls betting on sports, horses and greyhounds, hasn’t been able to generate the revenue it anticipated over the past few years. As a result, it had to seek outside help in an effort to counter the proliferation of offshore sportsbooks targeting the country.
That led to a battle between some of the biggest names in the industry, with Entain apparently taking the lead. It made several bold promises to get to where it is and will now have to live up to its word.
The New Zealand racing industry is set to receive a much-needed boost, as Entain promises to inject at least NZD1 billion (US$619.8 million) in funding over the next five years. The total value of the deal has been kept a secret, with NZ Tab providing the only clue about the amount of money that will flow.
This will be a springboard toward greater revenue for racing in the country. Both Entain and NZ Tab emphasize that the arrival of Entain will offer the potential for even greater financial benefits throughout the lifespan of the arrangement.
Moreover, Entain is committed to providing NZD10 million (US$6.2 million) more in sponsorship efforts to augment racing festivals and develop programs linked to local communities. Dean Shannon, the CEO of Entain in Australia, referred to this decision as a “unique opportunity to shape the future wagering experience for customers and to support New Zealand’s racing and sporting industries.”
TAB NZ was running out of room when it decided to partner with Entain. It anticipates that challenges, such as heightened competition, increased costs and capital constraints, will persist and worsen if left unaddressed. Therefore, it asserts, the partnership will ensure sufficient funding for both racing and sports.
All Eyes On Entain
Previously, it was possible for gaming companies to make promises that they could later sidestep. They did so by placing blame on changing economic or political environments. That’s not the case anymore, with more gaming regulators closely scrutinizing operators at all times.
If McAnulty signs off on Entain’s takeover, he’ll make sure it lives up to its promises. This includes the capital injections and keeping TAB’s 450 current employees at the company for the next two years.
It also means ensuring Entain stays on top of responsible gambling requirements, something it has had issues with elsewhere in the past. The government is currently exploring geolocation blocking. Should it approve new legislation, Entain will also have to support the effort and help keep offshore sportsbooks out of the country. However, this won’t likely happen until at least 2024.