‘It just went boom’: NZ model shows others how to capitalise on sports betting surge

The first payment was a surprise, given it was almost double the entire annual budget of Table Tennis New Zealand. The next year, however, the money kept coming. “Over the past 18 months [Table Tennis New Zealand] has had to adapt to a set of challenges that is virtually unheard of, not just to table tennis in NZ, but among all but the largest sporting organisations,” its annual report said. It was not talking about Covid-19, which would only emerge a year later. There was no existential risk due to concussion. There was no integrity scandal, no act of god. This problem was truly novel: “How to deal with an income source that outstrips your expectations to an extraordinary extent.” Related: Australians still betting big on Melbourne Cup, despite many saying they’re losing interest in race The money has kept coming. The organisation now collects more than NZ$1m per year from New Zealand’s monopoly gambling provider the TAB (reforms under way may open up the sector to online casinos), the equivalent of around $NZ1,000 for each of its 1,000 or so amateur players. Ping pong’s New Zealand administrators have tried to spend the windfall as sensibly as possible. They have professionalised operations. Identified governance challenges. Brought on more staff. A NZ$60,000 grant program became NZ$150,000 the following year. But still the money comes. There has been a strategic review. A new nationwide membership system. In Paris last year, Matthew Britz became the first table tennis player for New Zealand at the Paralympics in 48 years. And now, TTNZ has an investment portfolio worth more than NZ$1.7m. Suffice to say, table tennis in New Zealand is in good financial health. *** Australian sporting organisations face financial challenges and, despite the growing societal concerns about the influx of online wagering and the associated integrity risks, are seeking to raise more from the sports betting boom. The AFL, the best-resourced sporting body in the country, approached wagering companies this year seeking more money under their product fee agreements, and Football Australia is currently renegotiating its own deals. The environment is different in New Zealand, where Iain Potter stewarded Basketball NZ for a decade. Potter was described as “the man who brought basketball in from the cold” by New Zealand news outlet Stuff when he stepped down as chief executive in 2022. But he acknowledges his sport’s good fortune in being able to benefit directly from the rise in sports betting. “The revenue doubled overnight, it just went boom,” he says. A third of Basketball NZ’s take now comes from wagering. Football and tennis bodies receive millions. And, yes, even table tennis. In the year to July, TAB NZ distributed NZ$28.5m to individual sports and Sport and Recreation New Zealand under various local laws. Potter vividly recalls comparing notes with his Basketball Australia counterparts. “It was always one of our fun conversations because it was one of those few very rare instances where the New Zealand environment had a clear advantage,” he says. “They were just gobsmacked. I would have explained what I’ve explained to you, I would have explained it six times and every time it was just shaking heads in disbelief that we would have such an opportunity.” Gambling regulation is rarely simple, but Potter’s explanation is. In New Zealand during the 1990s, a public servant decided that racing and sporting bodies should directly receive that sport’s share of total bets received by the TAB. It took more than two decades for the full implications of that decision to play out. Today, betting on sports like football, cricket and basketball is closing on wagering on horse racing, and some of New Zealand’s sporting bodies now have balance sheets the envy of the world. But the sports-friendly nature of the New Zealand landscape is not what makes it special. Rather, there is another twist. “Any form of basketball in the world that somebody in New Zealand bets on, New Zealand Basketball gets the benefit of that,” Potter says. “It doesn’t have to be a New Zealand basketball product.” Therein lies the reason for table tennis’s unforeseen funding. TAB NZ has decided to offer betting on international table tennis, which increased in popularity during Covid. That led to the cash bonanza at Table Tennis NZ. Table Tennis Australia, by comparison, claimed revenue last financial year of $3.5m, with $2.2m coming from government and other grants. Chief executive Nicole Adamson says her organisation “aims to maintain a level of distance from gambling” on table tennis. The rise of international betting on the sport has increased integrity risks, and four members of Table Tennis England were banned for match fixing earlier this year. “However the challenges of government funding and corporate sponsorships for small sports are certainly real,” Adamson said. Related: Addicts who opted to be banned from gambling in Australia targeted to bet with overseas firms Potter notes the money for basketball has been crucial for developing new revenue streams, aiding financial resilience, and funding measures around integrity. “The reality is revenue allows you to build in robust integrity mechanisms, integrity officers, integrity tribunals, integrity education for players, coaches and administrators,” he says. “That is why you should actually receive some of the revenue as well, because it’s your sport, and it’s your integrity, it’s the integrity and cleanliness of your sport.” Some Australian sporting organisations such as the NRL, Cricket Australia and Tennis Australia receive millions each year in product fees, but none will see a cent from bets made on the English Super League, the Indian Premier League or the ATP Finals. At the same time, Responsible Wagering Australia (RWA), the body representing most large locally licensed betting companies, argues the Australian industry faces some of the highest tax rates in the world and pays roughly $1.9bn per year, mostly to the states. Potter says it would be preferable for the sports to get money from wagering companies directly, not in an ad-hoc manner through the government. “But of course, that would be money that wouldn’t then be going somewhere else, and in Australia there’s a pretty strong and fierce racing lobby,” he says. “They wouldn’t want to see their ticket clipped.” In New South Wales, 33% of the money the state government raises through its resident betting tax is returned to the local racing industry. In Victoria, the share is 50%. There are no such provisions to direct payments to sporting codes. While in Australia the wagering debate rolls on, in New Zealand the money keeps rolling in. Potter agrees that perhaps Table Tennis NZ is overfunded but, ultimately, his country’s policy intention is justified. “There will be hundreds and hundreds of millions of dollars being wagered in Australia on the NBA and Basketball Australia gets no benefit from that. Now some people would say, ‘well, they shouldn’t get any benefit because it’s an offshore product, and what do they do?’,” he says. “Well, they’ve created an interest in basketball, that interest in basketball sometimes manifests itself in wagering on basketball products. So why should someone else just be the beneficiary of that?”