Spin City
Kia ora, Kiwis! It seems that New Zealand is on a path towards regulating online gambling, which could have us progress from the murky waters of laissez faire liberal gambling scene into the developed world.
On 14 March, our Parliament introduced Amendment Paper No 20 to the Taxation (Annual Rates for 2023-24, Multinational Tax, and Remedial Matters) Bill. The proposal is to tax offshore online gambling. This news story could result in a lot of changes for the gambling market, for New Zealand players, as well as for the role that sites such as DashTickets and Kiwislots play.
Gambling regulation is a double-edged sword. Examples from other markets serve as a warning that regulation can take a wrong path and hurt the market and the players, with only a handful of positive examples that did it right.
This is why we’ll interview the most knowledgeable person there is about the subject, our own Mark Dash, who surely has a thing or two to say to our general public and to the legal entities that will be working on the regulatory framework.
Mark, what do you think about the upcoming regulation? First of all, do you think it will happen?
Good day, Edward. Where there’s smoke, there’s fire. If Nicola Williams, the finance minister, says that the gambling scene in New Zealand is a problem and that it resembles the Wild West, then we can be certain that it’s just a tip of the iceberg and that the government is working on making it happen. It will happen.
In what shape do you think?
All the talks I’ve heard until now were about taxation. Which would indicate that our government is fixated on making money. Minister Williams talks about closing a “closing a tax loophole” and “ensuring offshore operators delivering online gambling to New Zealanders, pay tax”. You’d expect such words from a finance professional. It’s just money to them.
I don’t think this should be even called gambling regulation. It’s gambling taxation.
How much money are we talking about?
They say the offshore gambling duty will align with GST rules. The remote gambling operators, it’s a lesser known fact, are currently required to register and file GST returns in New Zealand if they provide more than NZ$60,000 of gambling services to Kiwis in a 12-month period. Not sure many are actually filing GST returns.
No one knows the size of the New Zealand offshore gambling markets, so estimates vary, some say we as a country could get NZ$150 million annually from this new tax, others say it could go up to NZ$500 million. In any case, the new duty will apply a rate of 12% to offshore gambling profits.
How are the other countries doing it? Which camp do we belong to?
You have all sorts of approaches towards gambling. Some countries (Albania) have outright banned all offshore traffic using IP bans to ensure domestic monopoly. Some (Croatia) have issued licences and are on a hunt for those that don’t have it. These countries assume a negative stance towards gambling in general. Countries like France, Germany and Denmark are also very strict in enforcing their own regulatory rules, but are accepting applications.
The UK is the best-known example of this. The Netherlands joined this group recently and the market has thrived since. In the best possible way. The UK and The Netherlands are shiny examples of being mostly concerned with player protection, not money.
It’s all about the money, isn’t it?
Yes. Both in terms of taxation, and in terms of protecting the local companies from external competition that is much stronger because it conducts business on a global scale. We don’t have our own online gambling industry really, it’s SkyCity and nothing else, so I don’t think it’s to protect the local business. This is being done for the millions in tax revenue.
Is there anything else regulation should cover?
You know as well as I do it should, Edward. During your own casino review assignment last week you were denied payment as a suspected bonus abuser despite playing by the book. The casino took all your funds – the bonus as well as your own money. What can a Kiwi player do in such a case? Absolutely nothing. Try to persuade a casino to pay, warn the other Kiwis (if they’ll listen) that the casino is predatory.
If the casino happens to have a gambling licence in New Zealand and – crucially – it can lose the licence to operate on this market if it treats the players unfairly, then you got something tangible to hold on to.
Can such regulation be done in New Zealand?
It’s a mare to set up. The United Kingdom did it right, The Netherlands did it right, but they now have huge organisations that are the equivalent of government ministries in complexity. It’s a chore to keep track of what the operators are doing wrong, yet it must be done. No way around it. If you aren’t doing it, then the operators will have their way.
There must be at least some mention of player protection in the new law.
Do you think there will be any inclusion of player protection?
No, I don’t. What are the odds that someone in the government is focused on player protection, has the right proposal, has persuaded the rest of the government to include it with this taxation bill, and is competent enough to see it through and make it work.
How will the New Zealand government make sure the operators really pay tax? What will happen if they don’t?
I personally think it will be a lesson that the government will learn – that you can’t hurt the operators unless you give them licences. It’s a bit naïve to think that the operators will apply for tax simply because you tell them to. What will happen if they don’t apply? Nothing, same as nothing happens to operators that didn’t file for GST under the current scheme. It’s not feasible to take foreign companies to court.
The government will have to start issuing licences that they can revoke, or they’ll have to turn to IP bans. It’s one way or the other.
Which do you think is more likely?
IP bans are easier. For licences, you need a serious regulatory framework and a lot of intelligent people that made it happen and that are fine-tuning the framework continuously. Any fool can block an IP.
Thank you, Mark!
See you in the office, Edward. Finish that beer and let’s go.
Big changes are coming for online gambling in New Zealand. After years of operating in a regulatory grey area, the government has announced a brand-new Online Gambling Bill aimed at creating a safer, more compliant gambling market. Key points from the 2025 update include:
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