Even though, as a country, New Zealand currently has some of the world’s more restrictive gambling laws, this has certainly not proved to be a disincentive for New Zealanders who like a flutter. It’s estimated that well over 75% of the adult population gamble on a semi-regular basis, even if it’s just on the weekly lottery.
Offshore gambling websites are, however, legal for New Zealanders to enjoy. These come with their own risks as they are not regulated much like domestic gambling. It’s important to choose the right sites to ensure a safe good experience.
Growth in Popularity
The popularity of the activity is also being reflected in the size of the market, which analysts suggest will reach $600 million per annum by 2027. The bulk of this growth is set to be generated by the online casino sector which continues to expand.
Considering the inexorable rise of the online casino, there are now moves afoot to change the way that the market is regulated to bring it up to date.
The current law
We have to go back over two decades to the 2003 Gambling Act for the most recent piece of legislation. This was designed to impose regulations on land-based casinos, sports betting, and lotteries. As the online casino sector was still in its infancy it was largely ignored by the legislation.
It did, however, forbid remote interactive gambling with New Zealand-based companies via telephone, computer, and other communication devices. But it neglected to cover operators who were based outside of the country.
As a consequence, many New Zealanders now play in casinos based overseas with seemingly no punishment should they be discovered.
Because of this legal grey area, there is a large market for New Zealand gamblers that is serviced by overseas providers.
Thankfully, a lot of these online casinos are reported on by Casino.org and other review sites as a way to provide peace of mind for those Kiwis who can’t wait for the change in legislation, but want some more information before diving in.
Changes are afoot
The law, like nature, hates a vacuum. So, for some time there has been talk of introducing new regulations that acknowledge the current situation.
So back in May 2024 of this year, a proposal was suggested whose purpose is to make the situation clear. If it continues its passage smoothly and eventually makes it into law, it will mean online casinos based overseas will be allowed to apply for licenses to operate legally in the country. This will also necessitate the establishment of a body similar to the UK’s Gambling Commission.
Its role would be to act as an independent organisation whose duties include granting licences to applicants as well as regulating the industry in general. Naturally, the proposed commission would have the power to withdraw licences from operators who fail to follow guidelines.
In the UK, the Gambling Commission was created in the wake of that country’s 2005 Gambling Act on which the New Zealand proposal is partly based. There’s every reason to suppose that it will work just as well as it has in Britain which has one of the world’s best-regulated gambling sectors.
The advantages for New Zealand
The Ministry of Internal Affairs, led by Brooke van Velden, is in charge of putting forward these proposals.
There are a number of advantages that support their case.
It goes without saying that the first of these will be that the law becomes clear-cut for anyone who wants to play in an online casino. The regulatory body will also be able to provide real peace of mind that, to gain a license, the online casino in question will need to be run to the very highest standards.
A knock-on effect will also be to encourage interest from New Zealand-based casino operators whose businesses could offer additional employment opportunities in the country.
The other big benefit for the country is the extra revenue that the changes could generate. Firstly, there will be a fee for the license applications. This will be followed up by the tax generated once the casinos are up and running.
In Australia, the total tax revenue raised by all gambling is around AU$5.5 billion a year.
Obviously, New Zealand’s population is about a fifth of the size of its neighbour, but it could still amount to a considerable sum. A 12% tax rate is being mooted with the aim of raising NZ$179 million a year in revenue, although the country’s IRD is a little sceptical about this figure with their estimate closer to being NZ$35 million a year.
What next?
The proposals are still in relatively early stages at the moment, no doubt with several hurdles to cross before they become law.
It also remains to be seen if there are going to be any changes related to sports betting that will be included.
As this is an increasingly lucrative area for sportsbook operators, no doubt many would relish the chance to have a licence to operate in NZ.
So, these are interesting times for the online gaming industry with an eye on New Zealand – and many of the world’s biggest operators will be hoping that the laws will soon be changing in their favour.