New Zealand Moves Toward Regulated Online Gambling with Significant Revenue Projections

Gambling in New Zealand is a significant industry, with annual revenue from various gambling activities nearing NZ$1 billion. However, the government’s recent focus has shifted towards regulating the online casino market, which is currently unregulated. The government estimates that once the online casino market is regulated by 2026, it could generate around NZ$500 million in taxable annual revenue.

Projected Market Revenue and Industry Estimates

Jarrod True, a local gambling lawyer from True Legal, has provided insights into the government’s revenue projections for the upcoming regulated online casino market. According to True, the government’s budgeted estimate of NZ$500 million (US$300.8 million) for the regulated online gambling market is lower than what industry stakeholders anticipate. Existing monopolies such as Tab NZ and Lotto NZ suggest that the current spend in the grey market is closer to NZ$900 million, indicating a significant discrepancy between government projections and industry expectations.

The popularity of online gambling in New Zealand has seen substantial growth, particularly during the Covid-19 pandemic. With physical gambling venues closed due to lockdowns, many New Zealanders turned to online gambling as an alternative. This shift has persisted even after the reopening of physical venues, underlining the growing importance of online gambling in the country. Currently, Tab NZ is the sole online betting operator in New Zealand, operating in partnership with Entain.

The New Zealand government appears to be prioritizing the regulation of online gambling, with plans to introduce the new framework by 2026, which coincides with the country’s general election year. True suggests that the timeline for the launch indicates that the government sees the regulation of the online casino market as a key legislative priority. However, the process is expected to be lengthy, as it involves the passage of legislation through the New Zealand parliament.

Legislative Process and Stakeholder Consultation

The draft legislation for regulating online gambling has already been approved by the cabinet and is expected to be released later this year. This will be followed by a public consultation process in 2025, where stakeholders, particularly international ones, will be invited to provide input on the proposed regulatory framework. The government is keen to learn from other jurisdictions that have successfully regulated online gambling, which will likely influence the final structure of New Zealand’s regulatory approach.

Details regarding the number of online licenses that will be issued and the associated costs remain unclear. True mentions that the specific regulations governing legal gambling in New Zealand are still being developed. Notably, the Minister of Internal Affairs, Brooke van Velden, has indicated that advertising for online gambling will be strictly controlled, and there may be restrictions on offering iCasino products alongside sports betting or lottery services.

There is speculation that land-based casino operators, such as SkyCity Entertainment Group, have lobbied for a limited number of online licenses to secure a larger share of the market. Both SkyCity and Skyline Entertainment have already launched online casinos licensed in Malta, with SkyCity partnering with Gaming Innovation Group and Skyline’s ChristchurchCasino.com utilizing White Hat Gaming. Initially, the regulator considered a low barrier to entry with no cap on online licenses as a measure to mitigate gambling-related harm. However, this approach may have shifted towards a more restrictive model.

Potential for Policy Changes During Legislative Process

True suggests that the policy of limited online licenses might face challenges during the public consultation period. Stakeholders are expected to express their concerns, which could lead to potential changes in the legislative framework before it is finalized.

A notable aspect of the proposed regulatio is the government’s decision to ban gambling sponsorships. True describes this move as unexpected, speculating that it may have been driven by specific interests within the cabinet. The ban on sponsorships is one of the few policies that have already been established by the government, marking a significant shift in the regulatory landscape for gambling in New Zealand.

Source:

''New Zealand government expects $500m regulated icasino market'', igamingbusiness.com, August 09, 2024.