A stoush is brewing between the New Zealand government and TAB New Zealand over whether or not the latter should be allowed to bid for one of 15 online casino licenses being offered under a competitive bidding process.
According to a report by local media outlet RNZ, the government has already knocked back an NZ$150 million (US$87.2 million) offer by the TAB to secure a 10-year license, provided that the number of licenses offered was limited to only a few.
Internal Affairs Minister Brooke van Velden told RNZ when asked if there was a chance that offer or any other by TAB NZ may be accepted, “Not under my watch. I don’t believe that the government should be involved in casino gambling. I look at the government trying to address the core services that people need in their lives and providing an online service for casino games is not what I think the government should be involved in.”
Despite being knocked back, the TAB has not given up, telling RNZ it “would like to be considered for a license and has asked for legislation to be reviewed,” according to the report.
TAB NZ, established under the Racing Act 2003, is a statutory monopoly for New Zealand sports betting, including betting on horse racing and greyhound racing, and has a mandate to promote the racing industry and maximize the profits of the industry.
However, complicating the matter of an online casino license is the TAB’s 25-year deal with UK betting giant Entain that will provide guaranteed funding to TAB NZ of more than NZ$1 billion (US$620 million) in the first five years.
TAB NZ stated at the time that it has faced “increasing competition, rising costs, capital constraints as well as other challenges” in recent years which have impacted its ability to deliver adequate funding to racing and sports. As such, it sought a “world-class” gaming operator to help regain its competitive edge, citing Entain’s operational expertise, cultural alignment with TAB NZ and its commitment to uplifting TAB NZ’s harm minimization and responsible gambling efforts.
In return for the guaranteed funding by Entain, the two entities will split all revenue over the 25-year period 50-50.
In its previous proposals to the government, TAB NZ said that securing an online license in a near-monopoly environment would guarantee larger payments from Entain and help secure its long-term survival.
“We are seeking enactment of the legislative net from April 2024,” it stated in earlier correspondence to van Velden. “TAB NZ will immediately receive an additional NZ$100 million from Entain and an increase in minimum guaranteed payments of at least NZ$15 million per year from this law change, delivering a material funding uplift to both our racing and sporting partners.”
However, an Internal Affairs briefing said that granting an online monopoly to TAB NZ would be a bad look.
“When the land-based monopoly for TAB NZ was established, it was an entirely not-for-profit entity that distributed its profit to the racing and sports codes,” the briefing said.
“Since the Entain partnership was entered into in 2023, there is now a 50-50 split with a ‘for profit’ offshore online operator. Providing a monopoly to TAB NZ could be perceived as providing a global ‘for profit’ gambling provider a monopoly in New Zealand while sending profits offshore.”
Both TAB NZ and casino operator SkyCity Entertainment Group – which also plans to bid – have called for the number of online licenses issued to be cut back to five.
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