Entain Comes With Update on Tab NZ and 365scores Deal

Entain Plc has provided further details regarding its strategic decisions surrounding its recent partnership with Tab NZ and its acquisition of 365scores. Entain and Tab NZ entered into a partnership last month, which will see Entain support Tab NZ’s betting and broadcasting activities in New Zealand. The partnership started on 1 June 2023 and will continue for 25 years.

One month earlier, Entain acquired sports media business 365scores for a total amount of NZ$225.7 million. In its update, Entain states that these two M&A deals are expected to generate earnings before interest, tax, depreciation, and amortization (EBITDA) ranging between NZ$22.6 million and NZ$30.2 million in the 2024 financial year, and an EBITDA of NZ$75.6 million in 2025.

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Strong Position Tab NZ

Dean Shannon, CEO of Entain Australia and New Zealand, emphasised the strong position of Tab NZ and Entain as the main reason for undertaking this partnership.

“Tab NZ holds a unique position in New Zealand as the only operator of retail wagering and the holder of the sole wagering licence. This partnership provides unrestricted access to the regulated market in New Zealand, which generates approximately NZ$600 million in revenue and shows significant growth potential. The partnership brings together the expertise and capabilities of both Tab NZ and Entain.”

Dean Shannon, CEO of Entain Australia and New Zealand

Shannon further focused on the New Zealand betting market, projecting an underlying growth rate of nearly 35% in the next five years. This would result in a market valuation of approximately NZ$800m. He also confirmed that Entain has committed to a “minimum annual return of NZ$150 million for Tab NZ,” with this return expected to be achieved within the first five years of the deal. Shannon mentioned that Entain’s suite of Australian safer gambling tools, Punter Assist, will be added to the Tab NZ platform.

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“The strategic partnership between Entain Australia and Tab NZ represents a compelling opportunity for growth and value creation. Together, we will deliver an exceptional betting and gaming experience to customers in New Zealand while capitalising on the strengths and opportunities presented by this partnership.”

365scores

Sameer Deen, Chief Strategy Officer and President of New Ventures at Entain, highlighted the positive impact of the 365scores acquisition.

“They are avid sports fans, resulting in an extremely high visit frequency, with returning app users averaging around 100 interactions per month on the 365scores app. This significantly surpasses industry standards and far exceeds the average usage of traditional betting apps, which typically stands at around 5 times per month.”

Deen also mentioned that 365scores’ audience is present in several regulated markets, including Mexico and Colombia, as well as in markets expected to be regulated in the future, such as Brazil. He emphasised the benefits this will bring to Entain’s current operations in Brazil.

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Strong Position in Latin America

“365scores’ leading position in Latin America will perfectly complement our existing operations in Brazil, supporting our growth ambitions in a priority market for us with a clear path to regulation, as well as in other already regulated markets in the Latin America region,” Deen continued.

He added that he expects 365scores to deliver EBITDA figures ranging between NZ$22.6 million and NZ$30.2 million in 2024. Supported by this new agreement, the Tab NZ board has ensured a significant increase in distributions to the Racing Codes over the next five years. The minimum level for the 2023-24 period will be NZ$225.7 million, representing a notable 36% rise from the current fiscal year. Subsequently, the figures will reach a total amount of NZ$232.7 million in 2024-25, NZ$239.7 million in 2025-26, NZ$246.8 million in 2026-27, and NZ$267.9 million in 2027-28.

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