Is New Zealand's Remote Interactive Gambling Act too restrictive?

8 March 2005

In July 2004, New Zealand enacted a law enabling the Lotteries Commission and the TAB to offer their services over the Internet. Saar Cohen-Ronen from New Zealand’s regulatory body, the Department of Internal Affairs, offered delegates from the Pacific Congress on I-Gaming an expansive look last week at the Remote Interactive Gambling Act, and the prospects for online gaming in this country, which is around three hours flight to the southeast of Australia.

"We believe that there is no such thing as cyberspace, as transactions and actions via the Internet are undertaken by real people in real places."
- Saar Cohen-Ronen
Department of Internal Affairs

Back in mid 2001, the government released a paper seeking input as to how I-gaming should be addressed within New Zealand in a new gaming statute. The sweeping law changes of the Gambling Act 2003, which many regard as conservative and protectionist, came into effect nine months ago.

The Act allows interactive gambling by Internet, cell phone and television, but only through the Lotteries Commission and the TAB (now known as the New Zealand Racing Board), which each hold respective monopoly licenses in New Zealand.

"The Gambling Act was written with great analysis of the Australian model,” explained Cohen-Ronen, which reflects why the legislation does not allow for off-shore companies to apply for a license in New Zealand.

"We believe that there is no such thing as cyberspace, as transactions and actions via the Internet are undertaken by real people in real places."

Interactive Gambling Exemptions

As a general rule, the Gambling Act prohibits remote interactive gambling, with two important exemptions:

  1. Sales promotions in the form of a lottery and conducted in New Zealand are excluded from the ban on remote interactive gambling.
  2. The Lotteries Commission and the Racing Board can conduct approved forms of remote interactive gambling.

The NZ Lotteries Commission recently started offering text messaging, although their Web site currently only posts information and rules of the various games. They have commenced a multi-million dollar investment to replace their IT systems over the next 18 months, paving the way to sell gaming products through interactive TV, the Internet and mobile phones.

The NZ Racing Board offers both racing and sporting events--Sky TV and Trackside, telephone betting, text messaging and TAB services--the latter being the predominant type of Internet gambling in New Zealand.

Certain sales promotion schemes are also exempt from the regulations, if run as a lottery.

"A consumer mustn't pay more for the prize," Cohen-Ronen told delegates at the congress, citing the example of a duty-free promotion to go in the draw to win a camera for spending $50 or more.

Residents Can Gamble Offshore

The prohibition is on remote interactive gambling within New Zealand, and therefore it does not prohibit gambling conducted overseas. For example, it is not illegal for someone in New Zealand to participate in gambling over the Internet if that operator is overseas.

"Our legislation does not cover any other extra-territorial jurisdiction. We believe that it isn't practical to regulate offshore activities. There are no boundaries outside our country, which means that we have no objection to NZ residents gambling at offshore sites," said Cohen-Ronen.

"Our legislation does not cover any other extra-territorial jurisdiction. We believe that it isn't practical to regulate offshore activities."
- Saar Cohen-Ronen
Department of Internal Affairs

He went on to explain a few grey area examples of the legislation, which states that "a gambling operator must be located outside New Zealand."

Kiwi Casino is an independent offshore operation licensed and operated out of Antigua, but forms part of the Christchurch Casino group, which is has a successful land-based casino on New Zealand's south island.

There are also some organizations that may register a Web site, but may not operate out of New Zealand. It is the ISP's decision whether to block a site, and up to the Internal Affairs Department to prosecute, if a party contravenes the Act

Advertising Overseas Gambling Prohibited

It is clear that offshore companies are discouraged to offer residents their gambling services, as the advertising of overseas gambling products in New Zealand is prohibited.

An overseas gambling advertisement is any communication that publicizes or promotes gambling, or a gambling operator, when that gambling, or operator, is outside New Zealand, and any communication that is reasonably likely to induce people to gamble outside New Zealand. Section 16 makes this an offense under the Gambling Act.

To this end, operators can legally target New Zealand’s 18-plus or 20-plus population of around 2.7 million people (most forms of gambling can be legally played by those 18 years or over, although the age for casino gambling is 20). However, their chances of success are likely to be slim unless the brand is extremely well known.

The Gambling Act 2003 Summary

Remote interactive gambling-
(a) includes gambling by a person at a distance by interaction through a communication device; but
(b) does not include-
(i) gambling promoted by the Lotteries Commission; or
(ii) gambling authorized under the Racing Act 2003; or
(iii) gambling by a person in New Zealand conducted by a gambling operator located outside New Zealand; or
(iv) a sales promotion scheme that is in the form of a lottery and is conducted in New Zealand

The purpose of the Gambling Act is to:

  • Control the growth of gambling.
  • Prevent and minimise the harm caused by gambling, including problem gambling.
  • Authorise some gambling and prohibit the rest.
  • Facilitate responsible gambling.
  • Ensure the integrity and fairness of games.
  • Limit opportunities for crime or dishonesty associated with gambling.
  • Ensure that money from gambling benefits the community.
  • Facilitate community involvement in decisions about the provision of gambling.
16 Advertising overseas gambling prohibited
(1) A person must not publish or arrange to publish, in New Zealand, an overseas gambling advertisement.
(2) Subsection (1) does not apply to publishing or arranging to publish-
(a) a health message concerning gambling; or
(b) an advertisement for services to prevent, minimize, or treat harm; or
(c) a message about preventing, minimizing, or treating harm; or
(d) an advertisement for gambling equipment intended for distribution only to buyers of gambling equipment; or
(e) an overseas gambling advertisement in which the publicizing or promotion of gambling or a gambling operator is incidental to the purpose of the advertisement.
(3) A person who contravenes subsection (1) commits an offence and is liable on summary conviction to a fine not exceeding $10,000.