Business

Slow progress on offshore gambling is bad news for the unknown number of New Zealand users, but the Government says it is focused on getting it right

Gambling legislation from two decades ago has created a situation where offshore casino platforms are preying on New Zealand, but future-proofing and working with existing interests have made work to plug it up cripplingly slow.

“It’s so incredibly complex”, said Internal Affairs Minister Jan Tinetti, who has been undertaking a review of the laws governing online gambling since 2019.

She said the lack of progress was due to the difficult task of creating legislation that works today while future-proofing and satisfying existing interests.

Tinetti oversees SkyCity, Christchurch Casino and Lotto, while the fourth accredited gambling organisation in New Zealand, TAB, is under the remit of Kieran McAnulty as racing minister.

All of those organisations have – or in Christchurch’s case, intend to – have an online presence in New Zealand.

Because New Zealand has no regulated online gambling, both Christchurch and SkyCity’s platforms are based in Malta, but targeting New Zealand, though advertising within New Zealand is not allowed.

Balancing act

Tinetti is aware of the balancing act she’s faced with, not only between making sure certain commercial interests are taken care of and being seen to be advocating for gambling, but also between the damage actively being done and the time it takes to get things right.

According to research carried out by consultancy firm Regulus for SkyCity (in support of regulation) and supplied to Newsroom, conservative estimates placed total online gambling revenue as having increased from $139.3m to $332.6m between 2014 and 2020 as a result of “aggressive targeting” from offshore platforms.

The increase represented a compounded annual growth rate of 15.6 percent.

Tinetti said those figures were extremely conservative and the real spend was likely much higher. The figures also don’t capture the pandemic era where online casinos almost certainly saw a hike in users.

Troublingly, the Department of Internal Affairs also doesn’t know how many individuals are accessing online gambling sites.

“The fact that’s the conservative figure is even more concerning about what’s happening in the online space and that’s when I knew we had to do something about this.

“The reason is harm minimisation, at this point in time we aren’t aware of the numbers of people that we’re talking about and how many of those people are in extreme risk. Of course, a lot of them are not going to be, but there are going to be a number that it’s incredibly risky for.”

In theory, regulation would see a large percentage of those gambling online channelled through the regulatory framework, allowing harm and gambling addictions to be identified. Any legislation would also add safety measures, generate tax income and weed out bad actors.

The next step

Tinetti said the country had managed to be one of the last unregulated or “grey markets” in the developed world because of monopolies in the form of Lotto and TAB, the importance of the horse racing industry (breeding etc) and because of how fast the space had grown.

“New Zealand’s regulations were good at the time; it just now shows that we need to be looking at it the next step. The other part of it I would say is talking people around the globe in this area, some people did act quickly, and didn’t necessarily get the right solution for their country.”

Part of the concern is overly tough or quickly implemented settings overseas creating an active black market.

“You can’t stop the internet, you can’t stop the bad practice that’s happening, but you can minimise it if you get your settings right.”

A paper on the proposed legislative changes will go to cabinet before the end of year, but would the bill, particularly one that could appear as Labour siding with the casinos, be prioritised in the lead-up to the election?

“Work will start straight away and we’ve already done a lot of work in this area so it is something that can progress with speed.”

Alongside regulating online gambling, Tinetti has asked officials to work out what a complete review of the Gambling Act 2003 would look like. 

“I feel that online gambling is a big issue, but it’s part of a wider regime that we need to be looking at in this country and make sure that we’ve got regulations, legislation and regulations that are fit for purpose for 2022 and beyond.”