New Zealand is edging closer towards regulating its online casino market, although there are some challenges to overcome before this comes to fruition.
The Online Casino Gambling (OCG) Bill, introduced by Minister of Internal Affairs Brooke van Velden, recently passed its first reading in parliament.
That takes the nation one step further towards establishing an official licensing system for the sector. But not everyone is on board with the idea.
Those that support the movement claim it is long overdue and will bring oversight, safety and tax revenue into a sector currently dominated by offshore operators.
However, critics have countered that argument, claiming that the Bill could derail a decades-old funding lifeline for community sport in New Zealand.
Many of the voices against the new Bill are from the nation’s sports bodies, who believe that the move will push the sector into uncharted territory.
A Significant Step Towards Regulation
The Bill is a major statement of intent from the New Zealand government, which has made it clear it intends to bring the online casino industry under its umbrella.
Only 15 licenses will be auctioned to operators who want to run online casinos in the country. However, interested parties will have to meet strict requirements put forward by the governing body.
That includes providing a clear strategy on responsible gaming, demonstrating they have a solid history of abiding by the rules, and agreeing to pay a fee to the Department of Internal Affairs (DIA).
Van Velden created the new Bill to give New Zealand control over the online gambling industry. As things stand, the government does not benefit from tax revenues from the sector.
This Bill has been in the pipeline for some time now, and the Kiwi government is looking to launch the regulated market by 2026 at the latest.
Prioritising the Safety of Kiwi bettors
One of the most important points of the new Bill is its commitment to making sure New Zealanders can gamble safely on online betting sites.
Licensed operators will be required to implement responsible gaming measures, provide access to harm support services and agree to conduct their business under the supervision of the DIA.
Any operator that doesn’t abide by the rules could be fined up to $5 million for non-compliance. This is just part of the country’s plan to make sure its gambling laws are watertight.
The government recently changed the Racing Industry Act 2020 and named TAB NZ as the only legal provider of online sports betting. That move forced other operators, including Betfair, out of the New Zealand market.
However, the online casino market will be more competitive. New Zealand’s robust economy and tech-savvy population mean international operators are more likely to show interest.
Even though licenses have yet to be auctioned, the idea of opening the door to international operators hasn’t gone down well with many domestic operators.
They feel that a more open market could allow large multinational companies to dominate the market.
Companies in gaming hotbeds such as Coventry in the United Kingdom are monitoring the developments in New Zealand. Their expertise could be invaluable to the sector.
Coventry and the county of Warwickshire are home to a booming gaming industry. World-renowned companies such as Codemasters, Ubisoft and Playground Games Xbox Studio all have a strong presence in the region.
A Clash with the Sports Funding Model
While gambling reform advocates have largely welcomed the Bill, New Zealand’s sports community has sounded the alarm.
More than 50 of the nation’s top sporting bodies, including national federations for cycling, rugby league and hockey, have strongly opposed the Bill. They argue that it could impact a funding model that has been the pillar of community sport for decades.
Amateur sport receives around NZ$170 million every year through grants from gaming trusts, which are primarily funded by the revenue generated from pokie machines. None of that revenue goes to professional teams or athletes.
It is strictly reserved for community and amateur clubs, who are now concerned that the Bill doesn’t require licensed online casino operators to contribute back to the community.
They argue that if they are not mandated to do so, the online market will draw gambling spending away from pokie machines, which would effectively shut down the pool that keeps grassroots sport alive.
Cycling New Zealand Chair Martin Snedden has been one of the loudest voices speaking out against the Bill. He described it as a ‘crazy’ move that many local sports clubs could go under without funding from the gaming trust.
“Sport has thrived for decades off the back of community gambling grants,” he said. “At the moment, sports are really struggling with the economic environment – accessing sponsorship money is impossible.
“Local governments are naturally pulling back because they’re in financial trouble themselves.”
By Chloe Watkins.
