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Ladbrokes owner Entain has been approved to sign a 25-year strategic partnership with the New Zealand TAB after committing to investing $900 million in the racing industry over the next five years.
New Zealand’s Minister for Racing, Kieran McAnulty, approved the deal with the London-listed giant on Tuesday, two months after Entain was selected as the preferred bidder of the TAB, edging out Tabcorp and Sportsbet. The deal means Entain will take over the TAB’s betting and broadcasting operations for the next 25 years.
Entain is the owner of Ladbrokes.Credit: Getty
McAnulty said cabinet had also agreed to extend the TAB’s monopoly over sports and racing betting to the online environment, following a lobbying campaign from Entain, which offered to make an additional and upfront payment to prevent unlicensed offshore competitors from wagering in New Zealand.
TAB NZ chair Mark Stewart said he was pleased Entain agreed to secure the jobs of his 460 employees for at least two years.
“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.”
Entain Australia chief executive Dean Shannon said the partnership was a “game-changer” for sports betting in New Zealand.
“We are pleased that it will help provide significant financial benefits to three New Zealand racing codes and a vast array of national sporting organisations,” Shannon said.
The arrangement provides an upfront payment to TAB NZ, as well as a five-year period of annual minimum guaranteed payments which amount to $900 million.
“These are a significant uplift on the $125 million distribution for the current financial year,” Stewart said.
The partnership will provide $15 million to NZ national sporting organisations to be paid by 2025 as well as a $500,000 payment to Sport NZ to be invested into women’s sport.
The partnership means TAB NZ will be reduced to a smaller organisation and will be led by chief transition officer Nick Roberts, who will take over as chief executive from Mike Tod.
“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.”
Entain operates in more than 20 countries and offers sports betting, as well as casino, poker and bingo gambling online. It also operates major betting brands including Ladbrokes, Neds, Coral and BetMGM.
The NZ TAB is valued at about $NZ1 billion ($950 million) and is operated by the government and the New Zealand Racing Board. It operates 675 outlets across the country as well as tote terminals and digital wagering channels. The bidding process was overseen by financial services firm Barrenjoey Capital Partners.
Sportsbet, Tabcorp and Entain all appeared in Auckland to present final pitches in March. Tabcorp and Entain previously lodged bids to acquire the Western Australia TAB last year, but the process was abandoned by the state government after the collapse of a $1 billion bid from new wagering group Betr.
The financial crimes watchdog announced it was investigating Entain after a supervisory campaign of corporate bookmakers last year. The AUSTRAC investigation could lead to $22 million in fines and other regulation for Ladbrokes less than a month after the business was fined $28 million following a similar UK-based inquiry.
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