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Is a law change required for online gambling?

June 05, 2019

Contacts

Partners Karen Ngan
Senior Associates Sarah Lee

SkyCity Entertainment Group recently announced plans for an online casino, to be operated offshore in Malta.

SkyCity’s plans, while legally permitted, has prompted Internal Affairs Minister Tracey Martin to call for a change in our law on online gambling, which doesn’t apply to offshore operations.

The current law

Online gambling falls within the definition of “remote interactive gambling” (or RIG), which is currently prohibited under the Gambling Act 2003 (Gambling Act). RIG includes gambling by a person at a distance via a communication device. A communication device refers to a machine or device for communicating at a distance (such as computers, telephones and radios) and utilising any technology (including telecommunication, radiocommunication and broadcasting technology).

This prohibition is intended to primarily deal with gambling that utilises the internet, mobile phone texting or interactive television.

The exceptions

While RIG is prohibited and illegal in New Zealand, there are a few exceptions:

  • gambling conducted by the Lotteries Commission or authorised under the Racing Act 2003; or

  • a sales promotion scheme in the form of a lottery and conducted in New Zealand; and

  • gambling by a person in New Zealand conducted by a gambling operator located outside New Zealand.

In a nutshell, the RIG prohibition means that it is illegal to conduct online gambling in New Zealand and for people in New Zealand to engage in online gambling conducted in New Zealand. It is not however illegal for a local resident who is physically in New Zealand to engage in online gambling that is operated on an overseas gambling platform.

SkyCity’s plan to operate its online gambling initiative in Malta appears to rely on the exception that the online gambling is conducted by an operator located outside New Zealand.

Overseas gambling advertising

Even if the proposed SkyCity online casino does not breach the Gambling Act, SkyCity will still be prohibited from publishing any “overseas gambling advertisement”.

An overseas gambling advertisement would generally include any form of communication that publicises or promotes gambling that is outside New Zealand or a gambling operator who is outside New Zealand, or is reasonably likely to induce persons to gamble outside New Zealand. This would include banners, pop-ups and hyperlinks.

The prohibition does not apply to "an overseas gambling advertisement in which the publicising or promoting of gambling or a gambling operator is incidental to the purpose of the advertisement". Various other exceptions, for example, relating to publication of health messages relating to problem gambling, may also apply.

In a New Zealand Herald article published on 23 May 2019, the Problem Gambling Foundation voiced concerns about SkyCity’s plans and agreed that NZ law needed to change to “ensure Kiwis were protected”.

Looking forward

Given the polarising opinions problem gambling debates evoke and given that the primary purposes of the Gambling Act includes controlling the growth of gambling and to prevent the harm caused from gambling, it is only a matter of time before gambling laws are amended to address current issues. We will keep you up to date with any upcoming changes in the pipeline.

 

Contributors melody.zhou@simpsongrierson.com, juliet.bing-harmon@simpsongrierson.com