Entain-TAB deal approved by Government
The Government has today approved a strategic arrangement between the TAB and leading British betting agency Entain.
The 25-year strategic partnering arrangement will benefit the three New Zealand Racing Codes and 38 National Sporting Organisations, while bringing world class products, services and gambling harm minimisation tools to TAB NZ's 250,000 customers.
The deal has been described as "a monumental step in shoring up the future of New Zealand racing."
The deal means the minimum racing code distribution will be at least $150m annually for the next five years.
TAB NZ Chairman Mark Stewart MNZM says today's Government approval marks an important step in the growth and prosperity of racing and sport in New Zealand.
“Entain is a world-class operator with the expertise and financial strength to transform our business and in turn boost the long-term fortunes of racing and sport as well as the communities that rely upon their success. Furthermore, Entain has guaranteed the jobs of our 460 staff for at least two years. This is a great vote of confidence in our people,” Mark Stewart says.
The strategic partnering arrangement provides an upfront payment to TAB NZ, as well as a five-year period of annual minimum guaranteed payments. Supported by this new partnering deal, the TAB NZ Board has guaranteed an immediate and significant uplift in distributions to the Racing Codes for the next five years, to the following minimum levels:
$170m for 2023/24 (+36% compared to current financial year)
$175m for 2024/25 (+40%)
$180m for 2025/26 (+44%)
$185m for 2026/27 (+48%)
$200m for 2027/28 (+60%)
“These are a significant uplift on the $125m distribution for the current financial year,” Mr Stewart says.
Chief Executive Officer Mike Tod will step away from leading TAB NZ, which will reduce to a smaller organisation focused on its remaining legislative functions – including monitoring the regulatory and commercial performance of Entain New Zealand. TAB NZ Chief Transition Officer Nick Roberts has been appointed to lead TAB NZ in its new form as CEO. Current TAB NZ Chief Commercial Officer Cameron Rodger will become the Managing Director - New Zealand for Entain.
"Mike has done an incredible job of transforming TAB NZ since he took over as CEO at the beginning of last year. He has implemented and executed a strategy that has delivered the partnering arrangement with Entain, grown customer numbers to record levels, implemented world-first new products, lifted customer satisfaction and staff engagement scores to their highest levels in over a decade and assembled one of the best leadership teams in the industry. Our racing and sporting stakeholders are set to benefit from an outstanding legacy that he leaves."
So what does it mean for harness racing?
It will strengthen the sport financially.
In December HRNZ's funding decreased by $4.4m for the remainder of the season (until July 31, 2023) because of the TAB's trading difficulties.
The new deal means that stakes will at least go back to their previous levels as a starting point with a likely increase in stakes once the HRNZ Board has time to work through the details .
Updates on the deal and what it means for the sport will be posted on the HRNZ website as, and when, they become available.