Christchurch Casino is planning to launch an online casino based in Malta before the end of the year, disappointing problem gambling safety advocates.

The new offshore subsidiary would be known as Christchurchcasino.com Limited and would partner with a licensed international gaming company, company chairperson Bruce Robertson said.

It is currently illegal for online gambling to be provided in New Zealand except for two authorised providers – Lotto NZ and the TAB. However, it is legal for New Zealandersto gamble on offshore websites.

As a subsidiary company, the online operation would be barred from advertising in New Zealand under current legislation.

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A Te Tari Taiwhenua Department of Internal Affairs (DIA) spokesperson said it was believed Christchurch Casino would be the second New Zealand company to set up an offshore gambling site.

Robertson said the move was a defensive initiative due to the growth in online casinos at the expense of land-based casinos.

In 2019, SkyCity became the first New Zealand casino operator to launch an online casino, also based in Malta.

Christchurch Casino has informed the DIA of its decision and held a meeting with officials. The company would not be breaking any rules by setting up offshore, the DIA spokesperson said.

However, Christchurch-based Problem Gambling Foundation Services national director Bridgitte​ Thornley​ said it was disappointing and a concern that the casino was using an overseas presence to go online.

It was cheeky to use “ChristchurchCasino” in the domain name as it would lead users to think it was a trustworthy New Zealand-based site, even though it would not be governed by New Zealand rules, she said.

Also, if people searched for the name of the casino online to find out about opening hours or events, it would lead them to the website.

Online gambling was a growing problem affecting increasing numbers of people, she said, an issue arising both at work and at home, where the gambler’s mood swings could affect relatives.

Maria Bellringer, associate professor at the Auckland University of Technology’s gambling and addictions research centre, said online gambling was always more harmful than gambling at a casino.

“It can be done 24/7 and in secret. There’s unlikely to be supervision there or people who can keep an eye on whether someone is gambling for a long time,” she said.

The people most harmed by gambling were disproportionately the people who could least afford to gamble, she said.

“They’re desperate for money to pay the bills or buy food.”

Many overseas websites were unregulated, but there were opportunities for online gambling to be set up with rigorous host responsibility rules, including age verification and maximum spend limits, she said.

The DIA initiated an online gambling review in 2019 with a view to developing “a safe, regulated online gambling system for New Zealand”.

It attracted almost 3000 submissions.

The minister of internal affairs was expected to take a paper back to Cabinet regarding the online gambling review by the end of this year, the DIA spokesperson said.

Thornley said she supported New Zealand legislation allowing online gambling to be established her under tight regulations.

“I’ve heard multiple stories of people winning money but not being able to get it because it’s some makeshift organisation that’s been created overseas.”

Robertson said Christchurch Casino’s online site would involve robust responsible gambling safeguards.

It would pay GST on any gambling by New Zealand residents, and contribute to Christchurch Casino’s charitable trust.

The company supported the minister’s push towards a regulatory regime for online gambling and hoped to see a legislative framework set up in New Zealand, Robertson said.

He declined to say how much online gambling had affected the Christchurch Casino’s operation other than it was “significant”.

Estimates in 2019 showed up to $400 million a year is spent by Kiwi gamblers in unregulated overseas websites, with about $180m of that going to online casinos.

Christchurch Casino made an operating profit of $16.5m in the last financial year, according to the recently released financial results of its parent company Skyline Enterprises.

The Skyline Enterprises group operations made a net profit after tax of $35.7m over the 2022 financial year, compared with $56.7m for the previous year.