How New Zealand racing ‘sold the farm’ to Entain and left Tabcorp at the altar

When New Zealand’s Minister For Racing Kieran McAnulty signs off on a 25-year multi-billion dollar deal for Entain to take over the country’s wagering licence, he will deliver a once-in-a-lifetime financial boost to the thoroughbred industry.

New Zealand Racing has received a 25-year commitment from Entain. (Illustration by Sproule Sports Focus)

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In the wake of John Messara’s landmark 2018 report into the troubles of the New Zealand racing industry, Tabcorp was seen as having an open shot for the licence to run wagering in the country.

The path was laid for Tabcorp to waltz in and add another dominion to the empire, giving the publicly listed Australian corporation a much-needed boost to its international profile.

It had even been reported that a deal between Tabcorp and the New Zealand Racing industry was at an advanced stage of negotiation, but when details of that deal, which was significantly inferior to the one Entain has now put forward, were leaked, administrators and legislators got cold feet.

It then became a truly competitive process, a battle between Tabcorp, Sportsbet and Entain after BetR had opted out at an early stage. The result, announced last month, has been a prospective 25-year commitment from Entain, in what is a game-changing deal for New Zealand racing.

The headline numbers hit all the right notes. There will be NZ$160 million (US$98 million) up front for the deal, plus a minimum guarantee of NZ$1 billion (US$614 million) over the first five years. There is also a $NZ100 million (US$61.4 million) sweetener to be paid if the New Zealand government passes geo-blocking legislation which would give the new Entain-powered entity a virtual monopoly in a potential market of five million people.

The final deal is now before Kieran McAnulty, the Minister For Racing and former bookmaker with the NZ TAB, for final approval but his assent is seen as a fait accompli.