New Zealand to Introduce Regulatory Regime for Online Gambling

Currently, New Zealand offers a wide range of gambling activities. Gamblers in the country can enjoy pokies, lotteries, instant games and prize competitions. While there’s plenty of legal action for Kiwis, some gambling activities do not require a license. Ultimately this laxed licensing regime results in losses for the government which may otherwise benefit from additional tax revenue.

However, efforts of lawmakers seek to close this gap, implementing changes to the regulations and establishing taxes for online gambling, including offshore operators. According to the Inland Revenue Department (IRD), the country’s revenue regulator, the implementation of rules of taxation for online gambling would bring some NZ$35 million ($21.6 million) per year. This figure is in case a tax rate of 12% is implemented on gross betting revenue. The agency predicts that revenue will grow by 5% annually, meaning that over the next four years, the country will benefit from NZ$155 million ($95.6 million).

On the other hand, New Zealand’s National Party has more optimistic expectations about the generated tax revenue. It estimated that online gambling would rake in some NZ$176 million ($108.5 million) per year. If National’s expectation turns out to be true, in the next four years, the country would benefit from a whopping NZ$716 million ($441.6 million).

The New Regulatory Regime Will Generate Tax Revenue

Undoubtedly, New Zealand would benefit from enforcing taxes for online gambling operators. However, the difference between the IRD and National’s estimates is significant and puts more than NZ$500 million ($308.6 million) at stake.

Nicola Willis, the country’s finance minister, who was recently quoted by the New Zealand Herald, showed support for the implementation of levy for online gambling, outlining the current market resembles the “Wild West” and saying that it is problematic and “very unregulated.”

Willis explained: “Cabinet has made a decision in principle to introduce a regulatory regime which we are advised by Treasury will lead to more revenue and that will be reflected in our forecasts at budget time.” According to the minister, the expected NZ$193 million ($119 million) from the new tax levy represents a “conservative” forecast. However, Willis said that once the required legislation is established and the tax rate is implemented, the IRD will be able to determine what revenue can be expected.

Elsewhere in the region, Ladbrokes inked a two-year UFC sponsorship agreement for New Zealand and Australia. Confirmation about the deal came from the Entain-owned betting brand in mid-February.