What to expect from New Zealand’s planned online casinos legislation?
Last Updated on November 19, 2024
Following years of growing popularity of offshore online casino platforms in New Zealand, the National Party government has outlined a new ‘high-level approach’ to regulating their iGaming scene. Introducing new legislation, lawmakers hope to follow in the footsteps of several other regulated markets that have emerged in recent years, helping to improve consumer protections while taking advantage of the lucrative tax revenues available. With an estimated two-thirds of Kiwis taking part in some form of gambling every year, this has been seen as a positive step both for ensuring the welfare of New Zealand’s players and for utilising the obvious demand for safe gambling spaces.
The current gambling laws in place
Gambling in New Zealand is still controlled by the Gambling Act 2003, a forward-thinking piece of legislation for its time. This act regulated all forms of gambling widely available in the country, ensuring fairness was upheld, preventing harm to players, and directing a portion of all gambling profits back into the community. Aside from the state-owned Tab NZ and Lotto NZ, which allowed certain online sports betting and lotteries, iGaming activities were largely prohibited, with all interactive gambling done via telephone, computer, or other devices forbidden.
Emergence of iGaming in New Zealand
Despite making efforts to regulate online environments, lawmakers did not define the activity of offshore online operators in the country and following the emergence of iGaming as a global phenomenon in recent years, many Kiwis are now taking advantage of the wealth of offshore sites available to them. Operating in a legal grey area, these sites are not covered by the law, so players can play without fear of prosecution.
While many of the offshore casinos available in New Zealand provide players with a transparent and fair gaming environment, the offshore nature means that affiliate sites, such as Onlinecasino.co.nz, have sprung up as a form of self-policing due to there always being some platforms out there engaging in irresponsible practices and looking to take advantage of vulnerable people. Because of this, many have been clamouring for tighter regulations to better control online environments.
In addition, as offshore platforms are controlled and regulated by other countries around the world, the state of New Zealand receives little to no financial benefit from their operation in the country. Tax revenue from gambling is significant, and with it highly likely that gambling will continue its ever-greater transition onto online spaces, it feels more important than ever to take advantage of the tax potential of a regulated in-house market.
A change on the horizon
It seems the government has reacted. In July of this year the Minister of Internal Affairs, Brooke van Velden, unveiled plans for a new regulatory framework to see New Zealand open up an iGaming market. In the announcement, van Velden stated, “There will be a licensing system for online casinos, where operators will need to comply with a set of criteria before they are able to offer services to New Zealanders,” before further adding, “licensing is how we regulate most forms of gambling domestically. This is not intended to increase the amount of gambling New Zealanders do but to ensure operators meet requirements for consumer protection and harm minimisation, as well as paying tax.”
Planned legislation will limit the number of licenses available, with these licenses being sold at auction and lasting for three years. Importantly, the government will only grant licenses to reputable operators who can consistently meet the regulatory requirements once they have been outlined. Expected to be in motion by early 2026, this decision represents a huge shift in the dynamics of the iGaming scene in New Zealand. A market currently dominated by offshore businesses could soon be spearheaded by homegrown operators.
With a primary focus on ensuring player welfare and minimizing harm as a result of problem gambling, this decision will be well received by customers and health professionals alike, with stringent regulations in place helping to inhibit any malpractices on online platforms. Several gambling operators have received the announcement well. Most notably, iGaming market leader SkyCity, based out of Malta, was quoted as saying, “Requiring online casino operators to pay their fair share of tax and the new offshore gambling duty is a welcome first step towards a level playing field.” It is clear that the government’s decision has been one that everyone has been waiting for.
The impact of updated legislation
While it will be hard to define the true impact of these legislative changes until after the wheels are put into motion, the potential benefits for customers are starting to come to the fore, firstly, as every online casino will have to be licensed and controlled by the government, the risk of unfair practices and poor online security should be mitigated. Secondly, with only a limited number of licenses available, the competition to acquire the ability to operate in the country will be fierce. This should translate into a higher standard of gaming becoming available, with only the most highly rated businesses being able to operate.
In terms of tax revenues, the National Party claims around $179 million a year could be raised from taxing online gaming operators. While the Inland Revenue Department have put this figure closer to $35 million, there is no denying that significant sums of cash could be reinjected into the country. Kiwis have to look no further than their Canadian counterparts in Ontario who have reported vast revenue streams from their regulated market – streams which continue to widen as Ontarian iGaming matures.
This decision marks a turning point for New Zealand’s gambling landscape. As the current government looks to continue its plan for economic growth, this new legislation presents an opportunity to tap into a lucrative revenue stream, providing the potential for greater investment into infrastructure and community projects across the country from Auckland all the way down the South Island. While 2026 may seem far away, there is much to be done to ensure this new regulated market hits the ground running – let’s hope there aren’t too many stumbling blocks along the way.
