The arrangement would see Entain take over the majority of Tab NZ’s day-to-day operations.

This would include overseeing the wagering licence for New Zealand and dealing with financial arrangements with the Government.

Tab has stated that at least NZ$1bn (US$618m) would be funded through the first five years of the deal, to be used to support the racing industry.

A clause has also been written to ensure 24 months of employment for all Tab NZ employees as part of the agreement.

Racing Minister, Kieran McAnulty, is yet to sign off on the deal.

Tab CEO, Mike Tod, said: “Tab NZ faced an uncertain future in a David and Goliath battle with international wagering operators and a lack of capital to both compete and meet its potential.

“Today’s announcement is a significant milestone toward the transformation of Tab NZ and those who rely upon its growth and long-term success.

“In the absence of a strategic partnering arrangement, Tab NZ would be further cutting distributions in the next financial year.”

The deal comes after Tab NZ admitted ]it faced increased competition from offshore competitors, rising costs and other constraints that had limited its ability to provide adequate funding to racing and sports.

Dean Shannon, Entain CEO - Australia, said: “This is a unique opportunity to shape the future wagering experience for customers and to support New Zealand’s racing and sporting industries.

"We have a compelling vision for the future of Tab NZ, which includes a renewed focus on innovation and technology, and a long-term commitment to all racing, sport and industry stakeholders.”