New Gambling Regulation in New Zealand

The New Zealand government has taken a significant step towards regulating online casinos for the first time, with a new licensing framework currently under development and expected to be implemented by 2026.

The regulation is aimed at reducing harm, ensuring tax revenue, and providing essential consumer protections for New Zealand players. Brooke van Velden, the Minister of Internal Affairs, emphasised that unlicensed operators will be prohibited from targeting New Zealand players under the new framework.

Details of the Upcoming Regulatory Framework

Although the government is still finalising the details, Van Velden has shared some key aspects of the forthcoming regulations. The Department of Internal Affairs will oversee the licensing of online casino operators in New Zealand. A limited number of licenses will be issued through an auction process, with strict regulatory requirements for the bidders. Only individuals aged 18 and older will be allowed to participate in online gambling.

The regulations will also restrict advertising for licensed operators, ensuring that online casinos are kept separate from other forms of gambling like sports betting and lotteries. This initiative is not intended to increase the amount of gambling in New Zealand but rather to ensure that operators adhere to stringent consumer protection and harm minimization standards, as well as contribute to the country's tax revenue.

There will be opportunities for public feedback on these regulatory plans during the select committee process before the framework is finalised.

Market Reactions

SkyCity Entertainment Group, a major casino operator, has already expressed its support for the regulation. The company's CEO, Jason Walbridge, welcomed the move to limit the number of licenses and restrict advertising, noting that it aligns with SkyCity's long-standing advocacy for strong host responsibility and community benefits in New Zealand.

Walbridge also highlighted the issue of revenue being lost to offshore operators, which he hopes the new regulations will address, keeping more tax revenue and community benefits within New Zealand.

A New Era for Gambling in New Zealand

If New Zealand proceeds with this plan, it will mark the first major change to gambling regulation under the current government. The National Party, which won last year's election, has been vocal about the need to regulate offshore gambling revenue, estimating potential earnings of NZ$179 million per year. The party also criticised the lack of goods and services tax (GST) collection from the black market, advocating for mandatory registration and reporting of earnings by online casino operators.

This move to regulate online casinos follows other significant reforms in New Zealand's gambling industry, including changes in the horse racing sector, where TAB New Zealand now oversees the industry after taking over from the Racing Industry Transition Agency in 2020.

With these changes, New Zealand is poised to significantly reshape its gambling landscape, ensuring greater oversight, consumer protection, and economic benefits for the country.

Our Conclusion

As New Zealand moves toward regulating online casinos, players should be aware that the gaming landscape is likely to change significantly. One potential development is the possibility of reduced Return to Player (RTP) rates for online slots, similar to what has been observed in Ontario, where RTPs have been lowered to around 85%. This means that players might see a decrease in the amount of money returned over time when playing slots, making it crucial to stay informed about these changes and adjust their expectations and strategies accordingly.