By Dennis Ryan, RaceForm
The brave new world of a racing industry under the jurisdiction of global gambling giant Entain becomes a reality today with the handing over of operational control from TAB NZ.
In what has seemed a rapid final stage to a joint venture outcome that had been years since first mooted and months since an acceptance that it had to happen, June 1 is the date that the keys to TAB functions is passed to Entain.
Central to Entain being launched as New Zealand’s new gambling provider is Dean Shannon, CEO of the organisation’s Australian arm. By his own admission a keen punter, owner and all out racing die-hard, in 2012 Shannon founded Bookmaker.com, which evolved into Entain and was sold to UK betting giant Ladbrokes in 2013. Four years later Shannon then founded what was to become another significant player in the online betting market, Neds, and in 2019 that was amalgamated into the Entain-Ladbrokes stable.
“I’m what you could describe as fully ingrained in the business,” Shannon told RaceForm on Tuesday. “I’m different to a lot of others in my position, I’m a punter, an owner and breeder in all codes – I really do live and breathe racing.”
There’s a leap of faith on both sides of the equation, central to which is a forecast for significantly greater returns to the racing industry. Entain was one three potential providers to enter a joint venture agreement, with TAB NZ having ironically admitted that the David and Goliath battle it was fighting with offshore corporates was unsustainable, as graphically illustrated by a $15 million funding shortfall that became evident late last year.
While there was understandable reluctance in having to make that decision, TAB management accepted the inevitable and after a period of due diligence, in March Entain was announced as the preferred joint venture partner. The weeks since have contained some uncertainty, both for the code governing bodies and industry stakeholders at large.
Greater clarity was provided with last week’s announcement by Racing Minister Kieran McAnulty that Government had approved the TAB NZ - Entain joint venture, and this week’s stand-up by Shannon along with Entain CFO Lachlan Litt and newly appointed Entain NZ managing director Cameron Rodger was another step along the information trail.
“We see this as the chance to capture and unlock latent opportunity in the New Zealand betting market,” Shannon said. “It’s a grade one deal for us and an absolute privilege for our global brand to participate in this country.
“The New Zealand TAB has been under-funded for years, so there will be a major push to rest and invest in new technology, get back the people who have discontinued their involvement in racing and betting as well as draw in the younger market out there. That’s a huge opportunity.
“We have a whole range of products specifically appealing to the younger audience. It’s all about interactive user content, betting is now an industry that is invested heavily in both short form and long form content.
“Our job is to push it out into our betting channels, which is all part of our job to fund racing and getting the product out to more people.
Shannon makes no secret of the pride he has in his own success in the gambling sector which goes hand-in-hand with the organisations he has been involved with. “Fair to say we continually outperform the market,” he says in encapsulating his own and Entain’s position.
Connecting with his audience is integral to that, through well-known personalities as former jockeys Glen Boss and Jim Cassidy and ebullient trainer Peter Moody.
“People like that have the ability to draw in our audience, and we also invest heavily in educational content with something like 1200 pieces of content. Things like a jockeys’ perspective on every starting position around a racetrack, there are so many ways of selling what we have – it’s all about involving your audience.”
Investment in gambling harm minimisation is also high on Entain’s list of priorities to hold its rightful place on the betting landscape.
“We’re very proud of our customer care work, which is managed mainly through our Punters’ Assist programme. Part of that is monitoring our customers’ activities, reaching out to them and if we identify the need, even making contact with them by phone or email.”
Shannon admits the path to where Entain is now positioned has been rapid, no more than a year in fact since the first joint venture seeds were sown.
“I was at Karaka for the weanling sales this time last year when I first met (former TAB NZ CEO) Mike Tod. That’s where it all began and it’s been a remarkably well run and efficient process. With the resources we’re able to bring in and what the team at the TAB has to offer, we feel we’re a good cultural fit.
“There’s still a lot for us to learn and a long way to go, but getting handed the keys on June 1 gives us the mandate for our team to engage with the TAB NZ team, to pick up on any differences.”
As head of financial operations at Entain Australia, Lachlan Fitt is all too aware of some of the challenges facing the new regime.
“Offshore leakage is a major problem that has to be tackled,” he says. “We believe that’s a ballpark figure of $200 million in actual revenue going to the likes of Bet365, especially from the younger audience.
“There’s a lot to be done in securing that money where it belongs, so we look forward to the work that needs to go into that.
“Obviously we’re very supportive of geoblocking and we know the Minister is very keen to support that as well, which is understandable given what the importance of facing to this country’s economy.”
Part of the new model involves retention of TAB NZ’s 450-odd employees, which Shannon says is not only an act of good faith but also practical in terms of continuity and utilisation of those familiar with the business.
“We intend keeping the entire TAB team, and that’s not something that was forced upon us by Government,” Shannon said. “We have 450 people who understand the market, plus there’s the scope in time to involve them in our plans to promoter the New Zealand product offshore given the potential value that different time zones offer us. More product out there means more product fees.
“Trackside has a key role to play there and we plan to invest heavily in that side of the business, it’s a big part of our plans.”
One member of the TAB NZ senior management team who has already been integrated into the Entain team is former TAB NZ Chief Commercial Officer Cameron Rodger, who rose through the business from his initial days as a tote operator at Alexandra Park.
While the details of the new governance TAB NZ structure will look like, it is understood there will be a slimmed down Board that will still be necessary for governance purposes such as raceday schedules and dates.
What will continue fully is the engagement of the three racing codes with Entain as well the part that sports betting will play.
The thoroughbred, harness and greyhound code Chairs and CEOs met with the Entain team earlier this week, establishing greater understandings of funding levels that will lead shortly to announcements by the induvial codes on stakes levels and other funding for the 2023-24 season, which after all, is only two months away.
“Sitting down with the codes is important for all of us, and it was good that everyone was so well engaged,” commented Shannon. “The important message is that we’re all in this together, which includes a new level of transparency with the codes.
“It has to be a full working partnership as we set out to increase funding to the industry. Entain has to focus on the wagering product and how it generates that funding stream to the industry.”
Both Shannon and Fitt spell it out clearly that the greyhound code – cognisant of last week’s wake-up call from the Racing Minister – and sports betting are fully on Entain’s radar.
“When the New South Wales Government put a stop to greyhound racing in the state, Entain got behind and supported them, and it’s the same here, we see greyhound racing as an imprtant part of the big picture,” Shannon said, while Litt points to the significance of sports in the full betting suite
“Especially amongst younger bettors, it’s proven that a sporting bet is very often their first wager and it then leads to engaging in the racing product,” Fitt said. “And it should be noted that in Australia betting on racing makes up 78 per cent of our revenue and sport 22 per cent.”.
A wide raft of initiatives are on the table, which includes a branding exercise in the New Year that, while retaining the core TAB NZ brand will involve a separate brand with the intention again of drawing in new business.
Direct sponsorship or racing and venues, as evident in Australia, paying maiden winner bonuses to owners, and a syndication model of racehorse and greyhound ownership through an Entain membership club.
“We’re up for lot of things, which includes rebuilding the industry with greater investment,” Shannon said. “Our 50 er cent share of the profits comes with our responsibility to pay all the expenses, that’s how committed we are to this venture.
“We know there will be a lot of red ink on the Entain balance sheet to begin with, but that’s our problem, something we believe will bring its rewards in the longer term.
“What we’re asking for is a bit of trust from the industry. We’ve already put in place a minimum guaranteed return to the industry for the immediate future and we’re confident beyond that it will continue to grow.”
