New Zealand to Regulate Online Casinos with New Licensing Framework

The New Zealand government has announced its plan to regulate online casinos through a comprehensive licensing framework designed to minimize harm, support tax collection, and ensure robust consumer protections. This significant move marks the first time New Zealand will regulate online casino activities, with the new system expected to be in place by 2026.

Comprehensive Licensing System

Minister of Internal Affairs, Brooke van Velden, outlined the high-level approach the government will take in regulating online casinos. “There will be a licensing system for online casinos, where operators will need to comply with a set of criteria before they will be able to offer services to New Zealanders. It will be illegal for unlicensed operators to offer services to New Zealanders,” stated Ms. van Velden.

The government’s approach ensures that the new regulations do not aim to increase gambling activity among New Zealanders but rather to ensure that operators meet essential requirements for consumer protection and harm minimization, along with paying taxes. A limited number of licenses will be available, allocated through an auction process, and will last for three years, conditional on meeting regulatory standards. The minimum age for online gambling will be set at 18 years, and licensed operators will be restricted to offering online casino games, excluding sports betting and lottery products.

Controlled Advertising and Sponsorship Regulations

Licensed operators will be permitted to advertise their services under strict limits, a significant shift from the current prohibition. However, sponsorship by online casinos will remain illegal to further minimize harm. Minister van Velden expressed her expectations for the new system: “I expect the new regulatory system to be in place from early 2026 and the public will have the opportunity to provide feedback during the Select Committee process. Once established, the Department of Internal Affairs will be the regulator.”

Industry Response and Future Prospects

The New Zealand government’s decision to regulate online casinos has garnered support from various stakeholders in the industry. SkyCity Entertainment Group, a major player in the local casino market, voiced its support for the new regulations. “We remain supportive of the regulation of online casino gaming in New Zealand, with an emphasis on strong host responsibility and delivering community benefits in New Zealand,” stated SkyCity. The company’s CEO, Jason Walbridge, welcomed the plans to restrict license numbers and advertising, noting the importance of minimizing harm and protecting consumers.

SkyCity has long advocated for a regulated online casino market to compete with offshore operators. The company set up its online business through a Malta-based subsidiary in 2019 and has called for a level playing field where all operators contribute their fair share of taxes. “SkyCity looks forward to a regulated market, where harm minimisation is one of the primary objectives,” the company said in a previous statement.

Impact on the Market and Next Steps

This regulatory overhaul represents the first major change to New Zealand’s gambling landscape under the new government, which came into power following the National Party’s victory in last year’s election. The party had previously highlighted the potential to raise significant revenue from taxing offshore operators and criticized the lack of goods and services tax (GST) collection from the black market.

As the government moves forward with the implementation of the new framework, public consultations during the Select Committee process will allow stakeholders and citizens to provide feedback. The regulatory details, including the specifics of the offshore gambling tax, are expected to be announced later this year.

Source:

Regulating online casinos approach, beehive.govt.nz, July 30, 2024.