October 24, 2024

NZ govt considering Geo-blocking to restrict unlicensed casino operators

The New Zealand government has proposed a regime to have oversight on the online casino industry and one of the many options on the table is “geo-blocking”. This is according to a report by the Daily Blog.

This option will look at creating a virtual fence around unlicensed gambling websites, and discover where they are operating from. If a website has geo-blocking, Kiwis won’t be able to access it if there’s a rule that doesn’t let people from a certain country enter the site.

In the case of online gambling, the government proposes it be used to prevent Kiwi-based gamers from accessing the websites of New Zealand online casinos that don’t comply with the new ‘register and report earnings’ rules (which we will cover further in this article).

But there are ways around geo-blocking with Virtual Private Networks (VPNs). It’s not clear how the new regulations will handle people using VPNs to hide their location and access these blocked sites.

For years, New Zealand’s laws haven’t addressed online gambling from outside the country. As it stands, the Gambling Act 2003 is applicable only to land-based casinos and local lotteries. While the Act restricts New Zealand companies from offering casino games, it doesn’t directly make it illegal for residents to gamble on these games through offshore websites.

Because the law isn’t clear, many international online casinos are happy for New Zealanders to play on their sites. However not all online casinos are created equal – some sites might not have the same player protections as casinos in countries with proper online gambling regulations.

Introducing ‘The Gambling Tax’

While campaigning in 2023, the National Party proposed an online casino gambling tax to tighten the laws around online casinos. They want to close a loophole where offshore online casinos are not required to register their earnings in NZ for tax purposes. By establishing a regulatory regime for offshore operators, National forecast its ‘gambling tax’ will raise approximately NZ$179 million on average per year.

The main features of the tax are:

Make online casinos pay taxes: The plan would create rules for online casinos so they contribute their fair share of taxes, including GST and company tax to New Zealand.
Block unfair casinos: Only online casinos that follow New Zealand’s rules would be allowed. Others could be geo-blocked.

While the National Coalition Government might be inching closer to introducing its online casino gambling tax, big questions remain about how the policies might be implemented.

Closing the tax gap

National’s ‘Back Pocket Boost’ tax policy documents state that ‘Where domestic casino operators are required to pay GST, company tax and other levies, offshore operators serving New Zealand customers are able to dodge these obligations.’

‘Dodge’ could be construed as inaccurate; there are in fact remote services GST rules in force – they were put in place by a previous National government in 2016, according to Radio New Zealand.

But going after corporate tax and casino duties as well as GST may see offshore gambling companies taxed at around 25% of their total earnings from NZ. This will provide the government with a previously untapped source of income while helping cover the cost of setting up new online gambling rules.

How enforceable is it? If offshore gambling companies aren’t following the new online casino rules, they might get flagged by the taxman – the Commissioner of Inland Revenue – says the government.

Consumer protection is a welcome bonus

More consumer protection may be a welcome benefit of the gambling tax. This could lead to:

Safer gambling practices: Tighter regulatory oversight might require more casinos to implement features like deposit limits, age verification, and self-exclusion programs to help people gamble responsibly.
Reduced risk of fraud: Regulation could lead to stricter oversight of these companies, potentially reducing the risk of scams or unfair practices.
Reputable operators and more choices: A new system might attract established, well-respected online gambling companies to launch services in New Zealand. This could lead to more choices, plus new and innovative features for punters.
Tax fed back into support services: The tax revenue collected from online gambling companies could be used to fund programs that help people with problem gambling. This could include helplines, therapy programmes, and research into gambling addiction.

Navigating the unknown: Why online gambling regulations matter in NZ

The government’s plan to regulate online gambling is a big move, but they’re still figuring out the details. How these rules are designed will affect both how safe online gambling is for players and how the industry itself operates in New Zealand.

In the meantime, play it safe! When you choose a well-known and regulated online casinos, you avoid problems like limited deals, scams, or missing tools to help you gamble responsibly.

A fun and secure online gambling experience relies on picking a reputable provider that prioritises player safety and follows the rules. Follow our safe picks and trusted, exclusive offers by clicking on the link below.