ENTAIN writes down NZTAB value.

[Chief Stipe]

Entain recruits more Kiwi gamblers, but writes down TAB NZ by $322m

Tom Pullar-Strecker

 

March 11, 2025

 

 

Entain says it is encouraged by TAB’s “accelerating moment”, but has reduced forecasts for its underlying growth.MONIQUE FORD / THE POST

British gambling giant Entain says it grew the number Kiwis gambling through the TAB by 10% last year and increased its net gaming revenues by 4%.

Net gaming revenues measure the value of bets placed after expenses such as taxes.

It said in its annual report that it was encouraged by the TAB’s “accelerating momentum through the year”.

“More customers in New Zealand are enjoying an enhanced and engaging sports betting experience,” it said.

However, Entain indicated it did not expect to make as much profit as it had expected a year ago from the gambling partnership, announcing it had written down the book value of the business by £142.5m (NZ$322m) to just £89m.

Entain attributed part of the write-down to the Government being slow to implement planned technical measures to block Kiwis from easily accessing rival overseas gambling websites.

But it said it had also reduced its forecasts for TAB NZ’s underlying growth.

“Growth in New Zealand has been good, up 4% for the year and up 7% in the second half of the year, but we're still waiting for the ‘legislative net’, which is the catalyst for the licence market to grow materially,” chief financial officer Rob Wood told investors.

“We believe that's on track to come this year, but the delay does mean we're a little behind our original forecasts.”

In May 2023, the former government gave the TAB the green light to effectively outsource its entire business to Entain.

Entain, whose brands include Ladbrokes, agreed to take over the running of the TAB’s betting and broadcast operations for 25 years in return for half of the TAB’s net betting revenues — guaranteeing the racing industry pay-outs of $900 million over five years from the half share it didn’t take.

TAB New Zealand has so far refused to release full details of the strategic partnering agreement with Entain that was approved by the former government in 2023.

A request from The Post for the release of the contract under the Official Information Act has been under consideration by the Ombudsman since July 2023.

 

 

 

[Wingman]

31 minutes ago, Chief Stipe said:

A request from The Post for the release of the contract under the Official Information Act has been under consideration by the Ombudsman since July 2023.

What do they not want us to know?

[Chief Stipe]

5 minutes ago, Wingman said:

What do they not want us to know?

I suspect McAnulty and NZTAB over promised with the legislation and the projected financial numbers were inflated.  

ENTAIN over valued the business from the beginning.  The write down is just a paper loss at this stage.  

[Freda]

But a shade sobering all the same?

[Chief Stipe]

15 minutes ago, Freda said:

But a shade sobering all the same?

Perhaps for some.  I wouldn't worry about the write down other than using it as a means of working out what they expected to achieve profit wise from increased customers and the promised legislation.  From what we knew about the financial health of NZTAB before the sale we knew that the business was overvalued by ENTAIN based on those financials alone.  There was a discussion on BOAY about that.  

The deal always did have a smoke and mirrors flavour to it.  I look at the 5 year funding promise as a windfall rather than long term.  The industry is not spending that windfall wisely. 

If you take a negative strategic view then you would be spending more on fixing the infrastructure (e.g. tracks) in the first two years rather than throwing it at top end stakes and novelty races.  (I think they need to spend another $15 million on the Ellerslie track - $55 million and they have been doing "remedial work" since it was first raced on!).  Trentham is a lost cause and Riccarton is lingering (malingering?).  Cambridge is dead end.  Te Rapa is in sunset and we won't mention Hastings.

The biggest worry is ENTAIN are a FTSE 100 company and have corporate knowhow to operate on a global stage.  What are the get out clauses in the contract with NZTAB during the first 5 years and after?