New Zealand is pressing ahead with plans to impose a point-of-consumption tax on international online gambling operators that take wagers from Kiwi punters.
Late last year, New Zealand Racing Minister Nathan Guy revealed the recommendations of an Offshore Betting Working Group that had been tasked with figuring out ways to allow the New Zealand Racing Board (NZRB) to better compete with international online betting operators.
Last week, the Department of Internal Affairs (DIA) published its Proposals to Amend the Racing Act 2003, which are based on the Working Group’s recommendations. The DIA is seeking public comment on the proposed changes until May 27.
Chief among the recommendations are lifting the existing restrictions on (a) the NZRB taking in-play wagers, and (b) the NZRB offering wagers only on sports represented by National Sporting Organizations (NSO) with which the NZRB has struck a deal. The recommendations also suggest letting the NZRB accept prop wagers on non-sport related “novelty prediction events.”
As for those pesky international betting operators, the recommendations seek to impose a 2% tax on betting turnover generated from Kiwi punters. The Working Group estimates this rate could generate annual revenue for the state of around NZ $10m (US $7m).
The DIA notes that such a tax would be “highly dependent on the success of voluntary compliance and enforcement measures.” The Working Group recommended that regulators be granted “suitable powers … to issue notices to offshore betting agencies and other regulators” regarding breaches. The Group also notes that imposing civil penalties would “require a lower enforcement threshold than criminal penalties.”
New Zealand also seeks to impose a data fee on international operators who currently use Kiwi racing and sports info free of charge. The NZRB already has a reciprocal deal with the Australian TAB betting business that applies a 3% turnover fee in each direction. Here again, the Group acknowledges that enforcement of this requirement on international operators could prove dicey.