Minister Brooke van Velden Denies TAB's $150M Casino Deal

The New Zealand government is planning to auction 15 licenses for online casinos in its goal to regulate the online gambling sector. Local casino operators and bookmakers fear that mostly foreign-owned multinational casino groups will end up obtaining these licenses and conquer their market shares.

The TAB, a statutory entity that practically owns the monopoly rights on horse racing and other forms of gambling in New Zealand, is currently banned from offering any form of online casino gambling, although it has offered a hefty $150m deal to the government to secure one of the to-be auctioned and highly in demand casino licenses.

Released documents show that the TAB approached Brooke van Velden, Internal Affairs Minister, as early as December 2023, saying that it would like to offer up to $150 million. It thought its viability was under threat if it continued to be locked out of the online casino and gambling markets.

However, van Velden replied with the harsh, but clear and concise words, ‘’Not under my watch.’’ According to van Velden, the government should not be involved in online or land-based casino or bookmaker operations at all and should only address core services that citizens need in their everyday lives.

Offering Online Casino not the Same as Betting Services

Although the significant deal would meet fiscal ambitions set by the government for many years to come, especially taking into equation that the operator could pay upfront for a 10-year operating license in an exclusive market with only one or two operating providers total, Racing Minister Winston Peters wouldn’t change the law, disallowing the TAB to run online casino services.

According to him, core casino products, such as pokies, are inherently different from wagering products. For this reason, the Minister has advised TAB New Zealand that it should retain its focus on racing and sports only.

TAB NZ sees this differently and would still like to apply for a license and has asked for current legislation to be reviewed and altered accordingly once more.

Overseas Operators Costing TAB BZ Approximately $200M Yearly

As of writing, the TAB is losing nearly $200 million yearly to overseas casino operators. A so-called legislative net, as it is called within released documents and leaked emails under the Official Information Act, indicates that there is a significant downstream and negative effect of Kiwis aged 18 to 35 being acquired at a rapid pace by offshore operators, offering them all sorts of bonuses and perks.

As long as these foreign online casinos and bookmakers acquire players at a greater rate than the TAB, its business and, thus, market share shrinks, whilst unregulated and unlicensed, overseas casino multinationals rake in the rewards on their newly brought-in players.

However, when looking at the case from a different perspective, the land-based monopoly of the TAB that is in place is an entirely not-for-profit entity that distributes its profits to national racing and sports teams. Ever since TAB NZ partnered up with Entain in 2023, there has been essentially a 50-50 profit split in place with a ‘’for-profit’’ offshore operator.

If the TAB would obtain a monopoly over the online casino market in New Zealand, this provides a global ‘’for profit’’ gambling operator the monopoly over the country whilst sending its profits offshore, something not wanted by local regulators.

Added to this, leaked emails reveal that Entain is currently facing compliance breaches in neighbouring Australia due to its non-compliance with anti-money laundering (AML) requirements. Furthermore, TAB NZ owns 415 pokies across the country in physical, land-based casinos and gaming establishments that it would technically have to give up in pursuit of its online endeavors.

Despite these concerns, TAB NZ might still push the deal in a later stadium. For this reason, we can expect the New Zealand online gambling sector to be privatized sooner or later.