Guyon
Espiner, Investigative reporter, In Depth
19
March 2025
The TAB offered a $150 million deal to the
government in a bid to secure a lucrative online casino
licence, according to documents obtained by RNZ.
The
government is auctioning off 15 online casino licences as it
regulates online gambling for the first time and local
operators fear they’ll end up in the hands of foreign owned
multinationals and eat into their market share.
The
TAB, which is a statutory entity, is barred from offering
online casino gambling under current laws.
It wrote to
ministers requesting a law change, saying its viability was
under threat if it continued to be locked out of the online
casino market.
Documents released to RNZ under the
Official Information Act show the TAB told Internal Affairs
Minister Brooke van Velden that it could offer up a $150
million payment to the government.
But the deal was
knocked back.
“Not under my watch,” van Velden said
when RNZ asked whether she would allow the TAB to seek a
licence.
“I don’t believe that the government should
be involved in casino gambling,” she said. “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.”
The TAB made the offer for an “iGaming”
licence in writing to van Velden in December 2023.
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“It
is possible to get a substantial capital payment to the
government from selling the rights to iGaming in an
exclusive market. We estimate that there is a $150 million
capital payment available for an exclusive market where
there are one or two providers,” the TAB said.
The
deal would “meet the government’s fiscal ambitions,” the TAB
told van Velden.
“The operator could pay approximately
NZ$150m upfront for the right to operate the business under
a 10-year licence.”
The TAB declined to be interviewed
about the deal but it’s understood its proposal could have
seen the money paid directly by the TAB or as part of a deal
with an international operator.
In a statement to RNZ,
Racing Minister Winston Peters said he had “received
correspondence” regarding the TAB’s proposal, but he would
not change the law to allow the TAB to run an online
casino.
“Casino products are fundamentally different
to wagering products and the Minister has advised TAB NZ of
his expectation that it retains its focus on sports and
racing.”
But the TAB is not giving up and said in a
statement to RNZ that it “would like to be considered for a
licence and has asked for legislation to be
reviewed”.
Millions in cash for TAB when online
monopoly law passes
Peters has legislation before
Parliament – amendments to the Racing Industry Act – which
will extend the TAB’s monopoly for sports and race betting
to the online environment.
The TAB refers to the
online monopoly as the “legislative net” and documents
released to RNZ under the Official Information Act, show how
valuable this is for the TAB and its multi-national business
partner Entain.
In 2023 the TAB entered into a 25-year
partnership with UK betting company Entain, which guaranteed
$900 million for the racing industry over five years and a
50-50 revenue sharing deal.
In one email to van
Velden, the TAB said it wanted the online monopoly in place
by April 2024 because it was losing $200 million a year to
overseas operators.
The TAB said it would get direct
payments from Entain when the law, embedding its monopoly
for online sports and racing betting, was passed.
“A
delay in the legislative net is costing TAB NZ approximately
$1.5m per month in payments from Entain – funds that will
never be recouped,” it said. “There is also (the)
significant downstream effect of Kiwis aged 18 to 35 being
acquired by offshore operators at a greater rate than the
TAB.”
The TAB told van Velden that the law change
would see big cash payments from Entain.
“We are
seeking enactment of the legislative net from April 2024.
TAB NZ will immediately receive an additional $100 million
from Entain and an increase in minimum guaranteed payments
of at least $15million per year from this law change,
delivering a material funding uplift to both our racing and
sporting partners.”
An Internal Affairs briefing to
Peters, written in March 2024 and released to RNZ under the
OIA, says it could be a bad look granting an online monopoly
to the TAB, given its relationship with Entain.
“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.”
The briefing said this was made
worse by the fact that Entain was facing compliance breaches
in Australia “This risk is compounded by the perception
issues Entain is facing due to its noncompliance with
anti-money laundering (AML) requirements in
Australia.”
Despite those concerns Peters introduced
legislation extending the TAB’s sports and racing betting
monopoly to the online environment last year and it is
expected to pass into law by May.
TAB gets to keep
its pokies
The TAB will also get to keep its pokie
machines, despite a move by the previous Labour government
to remove its Class 4 licence to operate pokies.
The
previous Labour government said that in return for allowing
the TAB to have an online monopoly for sport and racing
betting it would have to give up its Class 4 licence which
allows it to operate its 415 pokie machines.
In a
December 2023 email to van Velden the TAB pushed back on the
move, saying it would cost the TAB $18.5 million.
“The
previous government announced an intention to wind-down TAB
NZ’s Class 4 gaming operation which was not agreed by TAB
NZ’s board or management. TAB NZ does not support such a
change and we seek to retain our Class 4 gaming
licence.”
It said it was a “gold-standard Class 4
gaming operator” and was being “unnecessarily restricted”
from rolling out its pokies to venues other than standalone
TABs.
The TAB has won that argument, with Peters
telling RNZ that the TAB can hold on to its
pokies.
“TAB NZ has proven that it can effectively use
Class 4 proceeds to fulfil its commitments to sports
organisations and the racing industry and the Minister does
not see any need to interrupt this revenue
stream.”
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