Photo: RNZ
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.
"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."
Racing Minister Winston Peters said he would not change the law to allow the TAB to run an online casino Photo: RNZ / REECE BAKER
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."
Internal Affairs Minister Brooke van Velden said she did not believe that the government should be involved in casino gambling. Photo: RNZ / Angus Dreaver
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."
