New Zealand to Cap Online Casino Licences at 15

13/11/2024 | Categories: News | Published by: Heather | Last updated: 13/11/2024

In July 2024 we reported that the New Zealand Government has unveiled comprehensive plans to launch an online casino licensing regime by 2026.

We have now got more clarification on their plans to tighten regulations around the online casino industry, with a focus on consumer protection and safeguarding children and other vulnerable groups. These reforms, set to be implemented by early 2026, will establish a robust regulatory framework for online gambling in the country for the first time.

Main Highlights of the Proposal

Licence Cap: Online casino licences will be capped at 15. Limiting the number of operators legally allowed to offer online gambling services in New Zealand.
Mandatory Age Verification: All licensed operators must implement mandatory age verification systems to ensure users meet the legal gambling age.
Advertising Ban Targeting Children: The new regulations will strictly prohibit advertisements directed at children, with severe penalties for violations.
Hefty Fines for Non-Compliance: Operators found breaching the rules could face fines of up to NZ$5 million (approximately USD 2.96 million).

Objectives of the Regulatory Overhaul

The proposed legislation aims to create a safer and more regulated online gambling environment. Addressing growing concerns over unregulated offshore websites. Internal Affairs Minister Brooke van Velden highlighted the dual objectives of protecting New Zealand consumers and reducing the harm associated with gambling.

Van Velden stated, “My goal is not to increase the amount of gambling that is happening online. But to enable New Zealanders who wish to play casino games online to do so more safely than they can today. Currently, New Zealanders can and do gamble on thousands of offshore gambling websites. By introducing a regulatory system, my intention is to channel customers towards up to fifteen licensed operators.”

What the Proposal Entails

Licensing Limitations

The proposal establishes a licensing system that allows a maximum of 15 operators to provide online casino games in New Zealand. This system aims to concentrate activity within a tightly controlled and monitored environment, significantly reducing the risks posed by unregulated offshore platforms.

Exclusive to Online Casino Games

Licensed operators can only offer online casino games. The proposal explicitly excludes sports betting and lottery products, as existing regulatory frameworks already cover them.

Protecting Minors

To protect minors, the proposal mandates:

Strict Age Verification: Operators must verify users are at least 18 years old before granting access to gambling platforms.
Advertising Restrictions: Advertising that targets or appeals to minors will be banned outright. This includes the use of imagery, themes, or language that could attract underage audiences.

Consumer Protection

The new system introduces safeguards to minimize gambling harm:

Enhanced Safety Measures: Operators must implement tools to help users manage their gambling behavior, such as deposit limits and self-exclusion options.
Prominent Warnings and Information: Platforms must display clear messaging about the risks of gambling and provide easy access to support services.

Penalties for Non-Compliance

Operators violating the new regulations could face fines of up to NZ$5 million. These substantial penalties reflect the government’s commitment to enforcing compliance and deterring misconduct.

Addressing the Current Regulatory Gap

New Zealand currently lacks a dedicated regulatory framework for online casino gambling. As a result, many residents turn to offshore websites that operate without oversight, exposing them to significant risks. By introducing these regulations, the government aims to provide a safer alternative while mitigating the influence of unregulated operators.

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Existing Gambling Laws in New Zealand

New Zealand’s gambling industry is governed by the Gambling Act 2003. Which sets out the legal framework for all forms of gambling in the country. The Act has 4 classes of gambling:

Class 1 and 2: Small-scale gambling, such as raffles and sweepstakes, typically operated by community organizations.
Class 3: Larger-scale gambling, including events like bingo and casino nights, where proceeds benefit charitable causes.
Class 4: Gaming machines outside of casinos, such as those found in pubs and clubs, which are strictly regulated.

The Gambling Act 2003 explicitly prohibits online casino gambling within New Zealand’s borders, except for services offered by the state-run Lotto NZ and the TAB, which provides sports and racing betting. While it is not illegal for New Zealanders to gamble on offshore websites, these platforms are not subject to local regulations, leaving users without consumer protections.

The proposed changes mark a significant departure from the current framework, introducing a licensing regime to bring online casino gambling under government oversight for the first time.

Timeline and Next Steps

The proposed legislation will be presented to Parliament in 2025, where further details, including advertising standards and additional consumer protection measures, will be refined. The new rules are expected to take full effect by early 2026.

Industry Reaction

The gambling industry is likely to experience a significant shift under the new system. While licensed operators will benefit from legal recognition and consumer trust, the cap on licences and stringent requirements may create challenges for smaller or new entrants. Nevertheless, the government focuses on prioritizing public welfare over industry expansion.

Broader Implications

This initiative aligns New Zealand with international trends towards stricter online gambling regulation. Countries like the United Kingdom and Australia have already implemented similar measures, emphasizing consumer safety and minimizing gambling-related harm. By adopting this approach, New Zealand aims to create a balanced framework. One that protects its citizens while allowing controlled access to online casino games.

The upcoming changes mark a transformative moment for online gambling in New Zealand, addressing long-standing gaps in regulation. With a focus on protecting minors, enhancing consumer safety, and curbing the influence of unregulated offshore platforms, the proposal lays the groundwork for a more secure and responsible gambling ecosystem.

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