Home » TAB believed to be close to outsourcing deal that could cost hundreds of jobs

TAB believed to be close to outsourcing deal that could cost hundreds of jobs

Race betting could be in for a big shake-up.

AIMAN AMERUL MUNER/Stuff

Race betting could be in for a big shake-up.

The TAB is close to announcing a deal to outsource its race-betting business to an Australian partner in a move that would cost about 300 jobs, according to race industry sources.

A spokesperson for the Petone-based state-owned betting agency did not confirm those details, but said it had “commenced a process in relation to a partnering arrangement” and was in discussions with “a range of international wagering operators”.

“TAB NZ is constantly exploring ways to enhance the customer experience for its New Zealand customers,” he said.

“As well as bringing increased funding and certainty for racing and an uplift in returns for sport, a potential partner can support rapidly accelerating improvements in our customer experience, customer acquisition, and harm minimisation tools and innovation,” he said.

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However, he said that what that partnership arrangement looks like “has not been determined, and any decision will be made in the best interests of all stakeholders”.

The TAB outsourced its fixed-odds sports betting business to giant Irish bookie Paddy Power Betfair in 2019 after licencing a betting platform from Britain’s gaming technology company OpenBet.

That was in response to concerns it was losing competitiveness against overseas bookies as the internet broke down the practical barriers to placing bets with larger foreign gaming platforms.

CHRISTEL YARDLEY/STUFF

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A report commissioned in 2018 by then racing minister Winston Peters from Australian racing industry expert John Messara recommended it also outsource all “domestic wagering, broadcast and gaming operations” for its race-betting arm to an international operator.

Messara said that would allow the thoroughbred racing industry to benefit from “economies of scale” and could potentially double the prize-pool available to horse owners, trainers and jockeys to about $100 million a year.

New Zealand had a rich tradition of success as a country of “outstanding horsemen and horsewomen and first-class horses”, but the thoroughbred racing industry was in a state of serious malaise, evidenced by a poor return to owners, he said.

However, the New Zealand Racing Board, which sat above the TAB until it was disbanded in 2019, questioned whether an outsourcing arrangement would deliver “long term value” for the industry.

It would be hard to reverse and it was unlikely that an overseas purchaser or long-term licence holder would prioritise investment in New Zealand, or let the TAB diversify into adjacent markets, it said.

A report on the Messara report by a ministerial advisory group concluded the outsourcing idea needed more analysis and recommended setting up a new committee to provide that.

The Australian reported at the time that Australian-listed company Tabcorp would be the frontrunner to become the TAB’s partner if a deal went ahead.

Peters said on Monday that had he voiced surprise at the Karaka National Yearling sales last month that a decision had not yet been made.