New Zealand has a long and complicated history when it comes to gambling and this is magnified when looking into the history of online casinos.
The role of the DIA
All forms of gambling in New Zealand are controlled by the DIA (Department of Internal Affairs). The reason for handing this responsibility to the DIA is to ensure that gamblers are protected and because the vast majority of the gambling market is run by state owned institutions and the DIA is well set up for regulated other parts of government.
The DIA is expected to ensure that a reasonable portion of gambling profits is returned back to local communities. This community responsibility is exemplified by the Lottery Grants Board. The board has been established under the Gambling Act of 2003 where all profits from the national lotto are used to uplift communities in NZ. In this case the DIA administers the funds on behalf of the Lottery.
SkyCity Entertainment Group
The SkyCity Entertainment Group is the largest private gambling company in New Zealand. They operate a number of massive land based casinos and have recently patterned up with GIG to open SkyCity Online Casino.
SkyCity’s move into the online casino space has caused a number of people to question New Zealand’s online gambling policy. The policy makes it legal for offshore online casinos to service customers in New Zealand but makes it illegal for local companies to run an online casino in NZ.
We have seen a proliferation of online casinos entering the New Zealand market on the back of this law with Captain Spins Casino the latest casino to offer online pokies in New Zealand.
Online Poker in New Zealand
New Zealand treats online poker in the same way that it treats online casinos. It is completely legal to play poker online as long as the online poker room is located outside of New Zealand. Poker players that do play online in NZ are advised to play at large recognised online poker rooms like PokerStars, PartyPoker or 888Poker.
The reason players are recommended to play at large online poker rooms is because many smaller online poker websites utilise bots are employees to fill up their rooms. This means that the person you are playing against may have a significant advantage over you which defeats the objective of poker completely.
Taxes for Online Gambling in New Zealand
This is a very contentious area of playing at online casinos and online poker rooms. Online casino players do not normally declare their online winnings and because the casinos and poker rooms are based offshore, they do not generally provide this information back to the NZ tax man.
This means that online gambling winnings are not subjected to tax which is a huge loss for New Zealand. It is difficult to say that someone makes a living from playing online pokies but there are many poker players that make a good living from playing almost exclusively online poker.
Land based casino are required to monitor this behaviour which makes avoiding the tax man far more difficult.
The future of online casinos in New Zealand
Recent reports have indicated that Kiwi’s have poured up to NZ$381 million into online casinos over the past 18 months. This is too large a portion of New Zealand’s GDP for regulators to continue to ignore. Offshore online casinos do not create local jobs, use that money to stimulate the local economy or give back to local communities.
It is time for New Zealand to update it’s archaic online gambling laws and introduce an effective online gambling bill that will allow for three things:
- Protect Online Gambling Customer
- Uplift and improve local communities
- Allow online casinos to operate legitimately with reasonable profits
- Ensure that online casino revenue is used to stimulate the New Zealand economy.
The NZ government has started this process but it moves slowly and each day that goes by means, more citizens are at risk and more money is being moved out of the country.
The latest attempt we have seen, from authorities to try and protect problem gamblers, is to try and ban the use of credit cards at gambling establishments. The problem with this in relation to online casinos is that new players will be forced to utilise online wallets such as Neteller and Skrill which exclude them from many of the welcome bonuses that online casinos offer.