New Zealand's Online Gambling Review

In New Zealand, domestic online gambling is illegal unless it is provided by authorised providers, such as the Lotteries Commission (Lotto) NZ or the Racing Industry Transition Agency (TAB). However, offshore gambling is legal and doesn’t have to be regulated. Most types of offshore gambling also have no harm minimisation mechanisms to protect players in New Zealand. Aside from a lack of safety online, offshore online gambling also doesn’t provide any return for local communities, which adds to the Department of Internal Affairs’ concerns and has sparked a need for updated online gambling laws.

With this online gambling review, there are more plans to develop an online gambling system that is secure and regulated by the New Zealand government. The main purposes are to keep locals safe and create the opportunity for the online gambling industry to contribute to the community with online grants.

Adding to the review, the Minister of Internal Affairs has also released the summary of the submissions report and public consultation discussion documents.

Background

According to New Zealand’s regulations, Section 9 (2) of the Gambling Act 2003, any online or phone gambling is illegal in the country, including the selling of lottery tickets online and the selling of any casino-type online gambling. Besides authorised providers, online gambling operations are illegal in the country, and overseas online gambling operators are also not allowed to advertise to New Zealanders.

Although these gambling laws and regulations exist, residents still take advantage of illegal online gambling, making offshore gambling providers millions annually.

With a focus on minimising the harm online gambling inflicts on people, New Zealand is also working on ensuring that anyone who benefits from offshore online gambling pays for any harm caused by the problem gambling levy. Gambling providers in New Zealand are also required to give returns to the local community, and apart from allowing only trusted providers to operate online gambling, the government is also very strict about new products that enter the market. 

Even with laws in place, regulating gambling in New Zealand remains a challenge for local authorities, especially as the online gambling industry continues to grow fast. Government officials are still working on a gambling framework to provide residents with safer online gambling alternatives.

Options for a regulated NZ online gambling market

There are four options operators could legally offer in the online gambling market in New Zealand, including:

Option 1: Existing gambling products

Operators: Lotto and TAB

Products: Online lotteries, sports betting, racing, etc.

This option is intended to keep the online gambling system the same as in New Zealand. In this case, Lotto and TAB will remain the only legal providers of any online gambling products in the country.

Lotto operators operate online through websites and applications, with products such as Lotto, Strike, Powerball, Keno, Instant Kiwi, Bullseye, and Instant Play, while TAB’s online gambling products mainly include sports betting and racing. Lotto and the TAB both operate online via websites and applications. The impact of offering these limited products is that New Zealanders are more likely to use illegal overseas gambling operators. 

Only offering existing gambling products supports efforts to keep New Zealanders safe from online gambling risks, such as losing money or identity theft.

Option 2: Extended gambling products

Operators: Lotto and TAB

Products: Online lotteries, sports betting, racing, new types of online gambling products, etc.

The second option still focuses on existing gambling operators and products but potentially allows an expanded range of online gambling products, such as a variety of casino-type games, which isn’t currently offered in New Zealand.

Option 3: Licensing of domestic operators

Operators: Local charitable or local commercial operations

Products: Online casino products or online gambling products

Option three involves licensing domestic operators, such as commercial and charitable operators, in New Zealand. These operators would have the opportunity to get licenses should they be able to demonstrate a good track record of compliance with the NZ gambling framework. 

With licensing of domestic operators, there are three gambling products that operators can be licensed for, the first of which includes limiting them to online gambling products that do not have licenses to existing domestic operators, like casino-type games. A second option would be licensing operators to run online gambling products, which in this case, established land-based casinos in New Zealand could get licenses that allow them to run online casino-type games, like blackjack, slots, and more. The third option is to have a Class 4’14 operator run online slots (only conducted by a corporate society, like the Lion Foundation) with the purpose of making money for authorised reasons.

Option 4: Licensing of domestic or overseas operators

Operators: Local and/ or overseas commercial or charitable operations

Products: Online casino-type products or online gambling products

The final option involves any domestic or international commercial or charitable operation that can apply for a license in NZ. To do this, an operator should demonstrate a record of compliance with the local social responsibility and gambling framework. A good example is an operator licensed by the UK’s Gambling Commission. With the licensing of domestic or overseas operators, one option includes limiting operators to licences only valid for online products and not already licensed to existing domestic operators, like casino-type games. An alternative option is licencing operators, allowing them to sell any gambling product online.

Restrictive tools for NZ from access to online gambling

Under options 1-4 listed above, should there be no further intervention from the government, New Zealanders can gamble online and use unauthorised or unlicensed overseas websites. However, this still poses a problem on how to deal with operators that are unauthorised in the country or anyone non-compliant with its standards. 

Apart from options 1-4 to regulate the NZ online market, there are also tools implemented to restrict residents from accessing illegal online gambling, including credit card restrictions, self-exclusion, public WiFi restrictions, geo-blocking access, and creating an offence. Mechanisms of these tools could include the following:

Gamblers can exclude themselves from the use of certain gambling operators or products should operators offer the function
Restricting the use of credit cards on gambling websites, including blocking the use of credit cards on gambling websites that do not have a license in NZ or the authority to use it
Free public WiFi could be restricted when trying to access unauthorised online gambling websites
New Zealand and its residents can be prohibited from visiting overseas or even domestic gambling websites, with the exception of authorised and licensed online gambling websites
Any unauthorised online gambling websites can be geo-blocked, making it impossible for New Zealanders to access them

What is the impact of online gambling in NZ?

Benefits and opportunities

Besides the negative impact of online gambling in New Zealand, it has also left some positive social and economic impacts, which is why the government wants to include online gambling websites in NZ. 

A positive impact was especially reflected in the economy in 2017 and 2018 as gambling proceeds of $749 million were returned to the community. Apart from this contribution, $341 million was also contributed to community funding from Class 4 ‘pokies’ (electronic gaming machines). Additionally, $243 million was given for community purposes by the Lottery Grants Board, $161 million was given by the NZ Racing Board to the racing club’s activities and casinos’ paid infrastructure, and $4 million to their community trusts.

Risks and costs

There are plenty of risks involved with online gambling in NZ, which was proven in 2017 and 2018 when 10,555 people had to receive treatment for their gambling problems/ addictions. 50% of the people who actively seek help in NZ have a problem with ‘non-casino pokies’. 

0.5% of the NZ population are considered ‘problem gamblers’ and usually gamble with negative consequences or are out of control, 1.3% of people are moderate-risk gamblers and are likely to experience some level of harm that leads to negative consequences, and 3.1% of people are low-risk gamblers and only experiences some form of harm with online gambling. The majority of the population, 65.3% to be exact, are non-problem gamblers, and 29.9% don’t gamble at all.

Taking into consideration the entire population in New Zealand, online gambling can be very problematic and lead to irresponsible behaviour and decisions, which, ultimately, has some type of negative effect on the country’s population as a whole. This is especially true as more people participate in online gambling by unauthorised providers each year. With these numbers in mind, one can also conclude the amount of money New Zealanders spend on offshore online gambling.

Types of legal online gambling

Online racing/ sports betting

Online casinos in NZ provide New Zealanders with everything they need to make online racing and sports betting legal and enjoyable. These local online racing and sports betting websites can also be very rewarding and contain the best sportsbooks and news. It caters to all local markets in the country and provides the best odds for local and international games and tournaments. 

From All Whites and A-League teams to European football and more, there are a wide variety of overseas premium sportsbooks for New Zealanders to choose from on online websites.

Online lotteries 

According to the Gambling Act of 2003, anyone who wants to take part in online gambling must be 18 years old or older to participate in any form of lottery. This also applies to buying scratch cards, racing, and sports betting in New Zealand. Anyone who wants to join a land-based casino must also be 20 years old or older. Any gambling activities outside of the Gambling Act of 2003 authority remain illegal. 

New Zealanders are allowed to play at online casinos, on gambling websites, and bet on sportsbooks offered by overseas companies legally. However, locals are only allowed to use the Lottery and the TAB to participate in online lotteries and are not allowed to use any other local internet gambling providers.

Online casinos

As one of the fastest-growing industries in the world, thanks to the rise of the internet, online gambling has become a very convenient and enjoyable way for people to gamble from anywhere. When the first online gambling platforms launched in 1998, people discovered that they preferred playing pokies and other casino games online far more than playing slots and games visiting a casino. 

Not only does online gambling offer freedom to play anywhere and at any time, but it’s also very easy to access. Today, over 20 years later, the online gambling industry is worth $20 billion, which is more than anyone could have ever imagined when it started.

In NZ, a wide variety of online casinos are available, yet many of these websites are not licensed or authorised. As a result, most online gambling websites are also unsafe and can result in players losing their money or having their identities stolen. For this reason, it is recommended that New Zealanders consider authorised online casinos. Many online casino websites in NZ are safe to use and even offer free bonuses.

Online poker

Online poker is extremely popular and gets played by more New Zealanders each year. With an increasing demand for online poker games, locals are taking advantage of some of the best poker websites overseas, all of which include incredible signup bonuses. Apart from poker being a very enjoyable game with high stakes, many are attracted to it because it is easy to use.

In NZ, poker players have formed a community where they enjoy playing the game at some of the best online casinos. Players can join in on real money games and tournaments at featured casinos, and for an even better gaming experience, they can register at their favourite online casino for a bonus and free spins. Video poker and related games on machines can now be played online in NZ. Players can also join live games for a more realistic poker experience.

Source: https://www.dia.govt.nz/diawebsite.nsf/Files/Online-Gambling-Consultation/$file/Online-Gambling-in-New-Zealand-Discussion-Document.pdf