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Is New Zealand Going to Regulate the Online Gambling Market?



Online gambling has been a legal grey area in New Zealand for more than two decades. But that could change soon. Earlier in March, the government suggested plans to regulate online gambling in the country.

Under the new proposals, every online casino operator in New Zealand will have to pay taxes to the government. The law will apply to both locally licensed and offshore casinos.

Whether you’re looking for casino sites to play slots legally or you’re a gambling investor, stick around to learn more about New Zealand’s plans to regulate iGaming.

Current Online Gambling Laws

Online gambling is neither legal nor illegal in New Zealand. It is a legal grey area. The country’s most recent gambling law was created in 2003. It introduced regulation to land-based casinos, sports betting, and lotteries. However, it never mentioned iGaming.

Because NZ does not regulate online gambling, most online casinos in the country are located overseas. Casinos acquire licenses in countries like Malta and then offer their services to players in New Zealand.

Interestingly, the SkyCity Entertainment Group, which owns SkyCity Queenstown, SkyCity Hamilton, and SkyCity Auckland, holds an online gambling license in Malta. It uses this license to offer gambling games to its large customer base in Kiwi land.

New Zealand doesn’t receive revenues from offshore casinos that operate within its borders. This explains why the government plans to update its online gambling laws.

Proposed Online Gambling Laws

As we stated earlier, the government has announced plans to regulate online gambling later this year. Nicola Williams, the finance minister, believes the gambling scene in the country is problematic and resembles the “Wild West.”

The minister believes legalizing online gambling will help add up to NZ$193 million in revenues. Some separate forecasts estimate that NZ could add as much as NZ$500 to its coffers by regulating iGaming.

Although the current regulatory talks are at an early stage, credible reports suggest that NZ will tax offshore gambling companies at a flat rate of 12% of the gross income. The taxation law became effective in July this year.

Why New Zealand Will Legalize Online Gambling

New Zealand is one of the few developed countries without legal online gambling laws. Canada, the USA, Australia, the UK, and most European countries permit iGaming. The country plans to join this list by regulating the sector later this year.

Online gambling is a $100 billion industry according to research firm Statista. NZ has a lot to benefit from by legalizing the industry. Below are some of these benefits:

Increased Tax Income

Let’s cut the chase. Ever since the government announced plans to legalize online casinos, most debates about the subject have focused on the potential tax revenue in the industry.

Some lawmakers are proposing a tax rate of 12%. Others want a rate that’s much higher than that of land-based casinos (18%). The National Party believes legal online gambling will add NZ$716 million to the economy over the next four years.

The Inland Revenue Department (IRD) is less optimistic and believes the industry will produce $NZ35 million per year. Either way, the country will generate millions of dollars by regulating the sector.

A Legal Gambling Environment

Online gambling is prevalent in New Zealand thanks to offshore casinos. The best casinos have valid licenses from regulators such as the Malta Gaming Authority. 

While licensing shows a site is legitimate, it doesn’t mean it is reputable. Some operators exist in New Zealand to take advantage of unsuspecting players. Regulation will help fight these casinos.

A valid license from New Zealand will help players distinguish safe operators from frauds. Gamblers will no longer use offshore sites with poor reputations because they will have plenty of options from the local market. 

Better Regulation for Offshore Casinos

Unlike many countries, New Zealand is not trying to eliminate offshore casinos. It wants to provide a level playfield for every gambling operator that targets Kiwis by taxing both local and offshore companies.

Beyond taxation, the government will have rules for foreign casinos that operate in New Zealand. Importantly, every offshore casino will need to hold a valid license and a secure website. That way, New Zealanders who choose to play at foreign sites will be protected from unsafe operators.

The government aims to create enticing gambling laws to attract the best online casinos in the country. This will reduce the number of black market casinos in the nation and subsequently improve the iGaming space.

Reducing Problem Gambling

One of the original reasons for creating the Gambling Act of 2003 was to help reduce problem gambling in the country. The Act includes a rule that requires casinos to fund problem gambling efforts in the country.

Unfortunately, the government can’t protect online casino players because it does not regulate the industry. The proposed laws will include plans to help fight problem gambling in the country.

Online casinos might be required to finance problem gambling research efforts. Or, it will dedicate some of the money generated through taxes towards fighting the problem.

Another way the government can make gambling safer is by creating programs to counsel people with problem betting signs. It could also order casinos to use digital tools to help their customers take breaks and set betting limits for safety reasons. 

Creating Employment

Online casinos generally don’t employ as many people as land-based casinos. However, they do provide job opportunities to accountants, managers, marketers, and live casino dealers. 

Most online casinos provide slots leased from independent software providers. They also work with payment companies, digital security firms, and other independent businesses that will have to employ more people to handle increased demand in the country.

In Conclusion

The New Zealand government is serious about legalizing online casinos in the country. The government’s main goal is to increase its tax revenues by licensing every operator in the country.

The government might experience a challenge trying to license and tax offshore casinos. But it will have an easy time regulating the local iGaming market. Legalization will improve the iGaming experience by introducing safe and reliable operators.

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