Legislation and Acts Governing Online Gambling
In New Zealand, the Gambling Act 2003 regulates the gambling industry. The Act controls and manages all forms of gambling in the country, and because of it, new casino venues and local online casino operators can’t secure licences that will allow them to operate in the country. In that case, there are only six land-based casinos in New Zealand and no locally operated online casinos.
According to the 2003 Gambling Act, there are four classes with lotteries, prize competitions, instant games, and games of chance mostly falling into 1-3, while gaming machines outside casinos fall into class 4. We’ve highlighted the four classes below so you can have a better understanding.
- Class 1: For a gambling establishment to fall into class 1, the prizes and turnover mustn’t exceed $500. This covers instant games, prize competitions, and lesser gambling opportunities. Establishments that fall into this category don’t require licences before they are allowed to operate.
- Class 2: The prize can exceed $500 for the second class, but it mustn’t exceed $5,000. Additionally, the potential turnover exceeds $500 but doesn’t exceed $25,000This can comprise establishments offering prize competitions, instant games, games of chance, and others. Establishments that fall into this category don’t need licences.
- Class 3: In this class, the prizes in one gambling session or the overall gambling activity exceed $5000. Casino establishments fall into this category and require a Department of Internal Affairs licence. In this case, only those with a licence can operate in this class.
- Class 4: This class covers establishments with gaming machines outside the casino establishments in New Zealand. They cover hotels, bars, and other recreational centres with gaming machines. Establishments that fall into this category also require licenses to carry out these gambling activities.
For online gambling, there are no explicit legislations covering activities. Therefore, the regulations and classes don’t apply to casinos New Zealand players can consider. However, since many operate under certain regulations, players must adhere to these rules.
Compliance and Licensing Requirements
In New Zealand, there is a current embargo on issuing licenses to operators, whether land-based or online. Only those with licenses before the Gambling Act 2003 was enacted, and the ones that fall into Class 1, 2, and 4 are allowed to provide players with gambling opportunities. However, these are limited because there are only six licensed casinos in New Zealand and establishments in other categories can’t offer extensive gambling services.
Compliance and license requirements for online casinos in New Zealand are non-existent. The laws don’t allow new operators to enter the market, keeping the number of establishments the same since the first set.
As a result, online casinos can’t legally operate and obtain licenses in New Zealand. However, there has been a push for a change in legislation to allow casino operators to gain licenses to enable them to operate and provide gambling activities to players in the country.
Fortunately, for Kiwi players, there is no law against playing at offshore online casinos. They just have to find a suitable licensed platform, even though they don’t operate in the country. Many offshore casino sites allow New Zealand players to try their luck on games. In this case, they can play for real money at these top-notch quality casinos.
These offshore casinos adhere to different licensing requirements. Therefore, depending on the jurisdiction they operate under, the compliance and licensing requirements vary. Some are stringent, while some are flexible. We recommend that casinos with licenses from reputable jurisdictions have thorough requirements before they can receive and keep their licenses.
Permissible and Prohibited Online Gambling Activities
No New Zealand-based company is allowed to offer any form of online gambling outside the Lotto NZ and New Zealand Racing Board. The TAB and the Lotto NZ are the only permitted options controlled under the NZ laws. However, these two are limited because they focus on specific gambling forms. Therefore, they can’t be acknowledged as full-fledged online gambling platforms. We can conclude that there are no online casinos in New Zealand.
Most forms of gambling are permitted, including sports betting, casino gaming, lotteries, and horse race betting. However, any form of remote interactive gambling is prohibited. This includes the sale of lottery tickets over the Internet, except for purchases done through the Lotteries Commission.
This prohibition is only enacted on remote interactive gambling in New Zealand. So, it doesn’t affect gambling at overseas online casinos. Therefore, most online gambling activities aren’t prohibited, but players can’t engage in them at any locally based establishment. In that case, they must set a course to offshore casinos and find a suitable option to consider. It is not illegal to participate in over-the-internet gambling as long as the website is based overseas.
The permission and prohibition fall to the licensing authority under which the offshore casino you want to join operates.
Impact of Legalization on Players
Effects of legalizing gambling can impact players in many ways. It has some advantages but it can as well be harmful to the players. If you need an idea about how legalization impacts on players and their rights and protections in New Zealand, you can refer to the following positive and negative impacts.
Positive Impact
- More revenue and improved economic contribution: The government may collect revenue from taxes and licensing fees imposed on gambling activities thus resulting into an increment of the country’s IGR. It is also a source of jobs for the citizens and another form of economic activity.
- Player Protection: Legalization includes regulatory measures protecting players from gambling problems, including age restrictions and responsible gambling policies. For example, if they carry licenses, they must adhere to strict rules that will ensure the environment for playing is secure for gamblers.
- Entertainment: Gambling can be a fun experience if you find a good place to visit either online or land based. In this case, exploring an incredible gambling experience becomes easier which means that you can use it to get rid of boredom waiting for real money winnings.
- Discourages Illegal and Unregulated Gambling: The availability of legalization and regulation would deter many players from engaging in illegal or unregulated activities, reducing the effect of gambling scams on society. That way, there will be cleaner and better gambling opportunities with players engaging in the best gambling sites.
Negative Impact
- Rise of Gambling Problems: With legalisation, more operators will enter the market, allowing players to access many options without stress. As a result, this can lead to consistent gambling, which might create a habit. Eventually, it can become an obsession, which leads to addiction.
- Financial and Social Consequences: Problem gambling can be severe, especially when it’s not checked early. It can lead to financial drain and develop social problems, which can extend to friends and family. So, without proper checks and balances, players stand the risk of falling into deadly situations just to support their gambling habits.
The negative impact of legalisation is the reason there are many responsible gambling programs as a way to tackle the issue. And it is one of the reasons online gambling is yet to receive the green light in New Zealand. There is a constant pushback against legalising online gambling in the country.
Penalties for Illegal Online Gambling
As there are no new licences issued to operators, especially in New Zealand, illegal gambling activities are inevitable. As a result, there are penalties that players and operators will face if they are caught engaging in illegal gambling activities. You should know that it is illegal for any New Zealand-based company to provide online gambling access to players. However, players are allowed to gamble online at internationally operated casinos.
Any player or operator caught red-handed will be penalised. We have explained below the penalties for illegal online gambling in New Zealand for players and operators.
For Individuals
The penalty for individuals who engage in illegal online gambling in New Zealand ranges from fines to even jail time. Players might be charged up to $10,000 if caught participating in remote interactive gambling at unauthorised platforms in the country. But don’t forget that it is an offshore-based casino; there is no penalty for joining them.
For Organisations
In the case of New Zealand-based organisations, if caught conducting gambling activities, they can be fined up to $50,000. Organisations are subjected to stricter laws and even offshore operators are also affected. In this case, any casino organisation caught advertising or promoting gambling to New Zealanders will be fined up to $10,000.
Evolution of Online Gambling Laws
Gambling was banned in New Zealand throughout the 1920s and by 1961, all forms of gambling were illegal. However, this changed during the next few decades with the advent of some casino establishments in New Zealand. The first casino in New Zealand was opened in 1994. Nevertheless, much has been changed in the NZ gambling industry after the Gambling Act 2003 was introduced. Over the years, no other casino venue has been licensed making it appear as if there is no growth within New Zealand’s casino industry.
The effect has also filtered to online gambling industry. According to Gambling Act 2003, online casinos are not allowed to offer their services to players. However, since 2008, New Zealand Lottery Commission has been able to launch online lottery sales which is one of the only licensed operators for remote interactive gambling and Internet casinos.
It wasn’t until a recent act in 2020 confirmed TAB New Zealand as the second operator in the land. But in this case, TAB NZ is the sole provider of sports and racing bet opportunities. In other words, if any person from New Zealand would like to play online gambling games at a casino site, then only those provided by TAB or by the Lottery Commission would be accessible to them.
However, the Gambling Act 2003 doesn’t prohibit offshore gambling. If a player can find a suitable casino with a proper license, there is no law against playing for real money at the casino. Players can enjoy online gambling opportunities at online casinos outside New Zealand.
Future Perspectives and Potential Changes
Despite the stringent gambling laws in New Zealand, there has been a shocking rise in New Zealand online casino players. In 2018, the overall gambling expenditure grew to $2.4 billion. Since the market is unregulated, there has been a yearly speculated loss of about $140 million, showing how much having a regulated market can help the economy.
Even with no online casinos in New Zealand, the NZ online gambling market is set to hit as high as $600 million in 2027, showing the fast-paced growth it has shown in the last few decades. Suppose regulatory terms aren’t put in place. In that case, the potential revenue will continue going to the international market because the data shows that New Zealanders are consistent gamblers, with over $2 billion recorded in bets spent by Kiwi players in 2021.
The NZ online gambling market projection shows that it will go over $1 billion by the end of 2023. Following the annual growth rate, a projection shows it might reach $1.5 billion by 2027. With these massive projections and lucrative returns, it is a matter of time before the clamour for online gambling regulation becomes louder, and the government starts to see reasons to update the Gambling Act.
It is a matter of time before we get a new law that allows new operators to receive licenses based on the industry’s continuous growth. We can see that there is no stopping New Zealanders from placing bets on games, playing games of chance, and trying their luck on games. So, we expect the potential change to include rigorous regulations ensuring that players are protected and the industry is properly regulated.
Conclusion
The legality of online casinos in New Zealand has been a topic of constant debate over the last few years. While many believe that the socio-economic effects are negative and outweigh the positive effects, the positive effects are considered to be much greater, as people are always looking for ways to gamble because there are no laws against playing in offshore online casinos It is certainly possible for players in New Zealand to embark on an incredible gambling journey, a licensed casino if just from popular circuits and add it. Fortunately, there are plenty of top NZ online casinos to consider. Choose one and start enjoying the freedom to play from the comfort of your home and on the go.
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