Britain's Entain gets green light to take over TAB's betting operations
Thursday, 14 Dec 2023
The TAB has got the green light from Minister for Racing Kieran McAnulty to outsource its operations to British gambling giant Entain, in spite of concerns voiced by the Problem Gambling Foundation.
The deal will see Entain, whose brands include Ladbrokes, take over the TAB’s betting and broadcast operations for the next 25 years and guarantee the racing industry pay-outs of $900 million over five years.
McAnulty said the Cabinet had also agreed in principle to extend TAB NZ’s “monopoly over sports and race betting to the online environment” which he suggested might be achieved by geoblocking overseas gambling websites.
Entain had lobbied for such a monopoly by offering to make an “additional and significant upfront payment if legislation was enacted that prevented unlicenced offshore operators from providing wagering services in New Zealand”.
Entain previously promised to guarantee the jobs of TAB’s 450 staff, excluding its executive team, for two years, to get the deal over the line.
McAnulty said he was confident the agreement would help secure a solid future for the racing industry and sports in New Zealand “through increased financial distributions to national sports organisations”.
“TAB NZ has been facing increasing financial challenges over recent years and was facing an uncertain future, largely due to competition from offshore gambling websites”, he said.
“The agreement provides an upfront payment of $150m upon approval of the agreement. In addition to this there will be a 50% revenue share from ‘day one’ with guaranteed payments of at least $150m per year for the first five years.”
The Problem Gambling Foundation has drawn attention to what it has described as a raft of regulatory breaches by Entain overseas and had planned to meet with McAnulty on Thursday week to discuss its concerns about the agreement.
Entain was fined £17 million (NZ$34m) by the UK Gambling Commission last year for what the commission described as “completely unacceptable anti-money laundering and safer-gambling failures”.
Entain was also fined for two rule breaches in Australia that saw it encourage heavy gamblers to start betting with its Ladbrokes business by offering them incentives to open betting accounts, in one case setting up an account for a gambler without their knowledge or permission.
The Problem Gambling Foundation also noted that Britain’s Guardian newspaper had reported allegations earlier this month that Entain had been benefitting from blog posts previously paid for by another betting business that it subsequently acquired that encouraged young mothers to gamble to give themselves a break from childcare.
But McAnulty indicated he expected the outsourcing agreement would reduce problem gambling, saying Entain had “better harm minimisation technologies such as facial recognition tools that can be rolled out in TAB venues”.
“I’ve received confirmation from TAB NZ of a $5m allocation for harm minimisation measures upon approval of the agreement,” he said.
“We would expect to ... see much more money allocated to harm minimisation, a fairer deal for Kiwi punters and sports codes and a greater focus on animal welfare.”
Ladbrokes was founded in 1886, but Entain had “significantly improved its approach” since the incidents the Problem Gambling Foundation referred to, McAnulty said.
“It is their current operation that I am concerned about.”
The partnership between TAB NZ and Entain did not prevent the Government from putting in place further harm minimisation regulation “and I have been clear with TAB NZ that I intend to do so”, he said.
TAB chairperson Mark Stewart said Entain was a reputable player.
“They certainly have had some issues ... but we have had lots of undertakings from them and I have no concerns.”
Entain has said that it “very much respects” groups such as the Problem Gambling Foundation.
“As TAB NZ has done, our plan will be to foster a meaningful relationship with them should ministerial approval be forthcoming,” it said earlier in relation to the outsourcing deal.
“We are proud of our record and commitment to player protection and safer gambling and that will be a cornerstone of our approach in New Zealand as well.”
Problem Gambling Foundation spokesperson Andree Froude said it would have preferred McAnulty to have met with it before approving the deal.
“Given where we are at now, we need to look forward and hope we can be part of the conversation around harm minimisation,” she said.
“We are still really concerned about Entain’s regulatory failures. The best indicator of future performance is past performance, and Entain’s form is not great.”
McAnulty said the arrangement would see Entain provide “most of the TAB NZ’s functions through a newly established, New Zealand-based subsidiary of Entain”.
However, TAB NZ would remain “as the entity responsible for all statutory functions and for managing the contract with the operator”, he said.
The Overseas Investment Office said it did not appear to have received an application from either Entain or the TAB for the partnership agreement.
It was unable to clarify whether it might need to approve the transaction late last week saying that, as of then, there was “insufficient publicly available information available to make an assessment of whether or not consent is required”.
The deal will see Entain, whose brands include Ladbrokes, take over the TAB’s betting and broadcast operations for the next 25 years and guarantee the racing industry pay-outs of $900 million over five years.
McAnulty said the Cabinet had also agreed in principle to extend TAB NZ’s “monopoly over sports and race betting to the online environment” which he suggested might be achieved by geoblocking overseas gambling websites.
Entain had lobbied for such a monopoly by offering to make an “additional and significant upfront payment if legislation was enacted that prevented unlicenced offshore operators from providing wagering services in New Zealand”.
Entain previously promised to guarantee the jobs of TAB’s 450 staff, excluding its executive team, for two years, to get the deal over the line.
McAnulty said he was confident the agreement would help secure a solid future for the racing industry and sports in New Zealand “through increased financial distributions to national sports organisations”.
“TAB NZ has been facing increasing financial challenges over recent years and was facing an uncertain future, largely due to competition from offshore gambling websites”, he said.
“The agreement provides an upfront payment of $150m upon approval of the agreement. In addition to this there will be a 50% revenue share from ‘day one’ with guaranteed payments of at least $150m per year for the first five years.”
The Problem Gambling Foundation has drawn attention to what it has described as a raft of regulatory breaches by Entain overseas and had planned to meet with McAnulty on Thursday week to discuss its concerns about the agreement.
Entain was fined £17 million (NZ$34m) by the UK Gambling Commission last year for what the commission described as “completely unacceptable anti-money laundering and safer-gambling failures”.
Entain was also fined for two rule breaches in Australia that saw it encourage heavy gamblers to start betting with its Ladbrokes business by offering them incentives to open betting accounts, in one case setting up an account for a gambler without their knowledge or permission.
The Problem Gambling Foundation also noted that Britain’s Guardian newspaper had reported allegations earlier this month that Entain had been benefitting from blog posts previously paid for by another betting business that it subsequently acquired that encouraged young mothers to gamble to give themselves a break from childcare.
But McAnulty indicated he expected the outsourcing agreement would reduce problem gambling, saying Entain had “better harm minimisation technologies such as facial recognition tools that can be rolled out in TAB venues”.
“I’ve received confirmation from TAB NZ of a $5m allocation for harm minimisation measures upon approval of the agreement,” he said.
“We would expect to ... see much more money allocated to harm minimisation, a fairer deal for Kiwi punters and sports codes and a greater focus on animal welfare.”
Ladbrokes was founded in 1886, but Entain had “significantly improved its approach” since the incidents the Problem Gambling Foundation referred to, McAnulty said.
“It is their current operation that I am concerned about.”
The partnership between TAB NZ and Entain did not prevent the Government from putting in place further harm minimisation regulation “and I have been clear with TAB NZ that I intend to do so”, he said.
TAB chairperson Mark Stewart said Entain was a reputable player.
“They certainly have had some issues ... but we have had lots of undertakings from them and I have no concerns.”
Entain has said that it “very much respects” groups such as the Problem Gambling Foundation.
“As TAB NZ has done, our plan will be to foster a meaningful relationship with them should ministerial approval be forthcoming,” it said earlier in relation to the outsourcing deal.
“We are proud of our record and commitment to player protection and safer gambling and that will be a cornerstone of our approach in New Zealand as well.”
Problem Gambling Foundation spokesperson Andree Froude said it would have preferred McAnulty to have met with it before approving the deal.
“Given where we are at now, we need to look forward and hope we can be part of the conversation around harm minimisation,” she said.
“We are still really concerned about Entain’s regulatory failures. The best indicator of future performance is past performance, and Entain’s form is not great.”
McAnulty said the arrangement would see Entain provide “most of the TAB NZ’s functions through a newly established, New Zealand-based subsidiary of Entain”.
However, TAB NZ would remain “as the entity responsible for all statutory functions and for managing the contract with the operator”, he said.
The Overseas Investment Office said it did not appear to have received an application from either Entain or the TAB for the partnership agreement.
It was unable to clarify whether it might need to approve the transaction late last week saying that, as of then, there was “insufficient publicly available information available to make an assessment of whether or not consent is required”.
