Entain secures 25-year TAB NZ strategic partnership

Entain has been selected as the preferred strategic partner by TAB NZ on a 25-year contract as the New Zealand operator looks to enter a new era of growth.

After six months of engagement with various potential partners, TAB NZ has chosen Entain as it aims to “materially boost the fortunes” of New Zealand horseracing and sport.

TAB NZ said it had faced rising competition and costs in running the business, as well as capital constraints which had impacted its ability to deliver funding to sports.

The operator said that via Entain’s new commitment, it would be able to deliver on these principles.

Under the terms of the partnership, TAB NZ will be guaranteed funding of more than NZ$1bn (£505,812,326) in the first five years to support its revitalisation of the horseracing industry in the country.

Over the full 25-year term, the deal has the potential to deliver total payments to horseracing and sport of around NZ$5bn. Horseracing is also set to receive a further NZ$10m boost in terms of sponsorship.

Elsewhere, TAB NZ said its financial position had been significantly strengthened and further payments will be deployed over time.

The deal also includes the opportunity for further investment from Entain should the New Zealand government enact legislation that blocks black-market operators in the country.

Entain has also committed to investing in TAB NZ’s gambling harm minimisation strategy with responsible gambling efforts.

Additionally, the partnership contains a commitment to retain and refresh the TAB NZ brand and a 24-month employment guarantee for existing TAB NZ staff.

TAB NZ said that the nature of the agreement and its support of New Zealand sport would mean further job opportunities for local communities.

The proposed arrangement remains subject to ministerial approval, with specific commercial details regarding the partnership remaining under wraps until that point.

The partnership was supported by Barrenjoey Capital Partners as sole financial advisers and Allens as principal legal advisers in Australia. Chapman Tripp provided legal advice in New Zealand.

Speaking on the importance of the partnership, TAB NZ CEO Mike Tod said that without Entain’s support the operator would have been faced with the reality of further cuts to distributions to New Zealand sport.

Tod said: “TAB NZ faced an uncertain future in a David and Goliath battle with international wagering operators and a lack of capital to both compete and meet its potential.

“Today’s announcement is a significant milestone toward the transformation of TAB NZ and those who rely upon its growth and long-term success. In the absence of a strategic partnering arrangement, TAB NZ would be further cutting distributions in the next financial year.

“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,” he added.

Dean Shannon, Entain Australia CEO, commented: “As the partner of choice for New Zealand, we have made a firm commitment to employment continuity for at least 24 months, with the team at TAB NZ essential to our future vision and growth of the market in New Zealand.

“We applaud TAB NZ for how the process has been run to date and we look forward to working with all stakeholders on necessary approvals to finalise the transaction,” Shannon added.