New Zealand online gambling point of consumption tax looms


new-zealand-online-gambling-point-consumption-taxNew Zealand’s government is pushing ahead with plans to restrict the ability of internationally licensed online gambling operators to offer wagers on local racing events.

On Thursday, Racing Minister Nathan Guy (pictured) announced plans to amend the Racing Act 2003 to boost the fortunes of the New Zealand Racing Board, which has long complained that its TAB betting product is getting its clock cleaned by the more attractive offerings available via international betting sites.

The proposed changes include a royalty fee for international betting operators who wish to use New Zealand race data. International operators will also face a point-of-consumption (POC) charge on wagers placed on Kiwi sports events with international operators.

The specifics of these charges won’t be revealed until the government submits new regulations to parliament – which the government says will be done “as soon as practicable” – but Guy suggested the POC rate will be in keeping with the 2% of betting turnover recommended by the Offshore Betting Working Group.

The government also intends to relax the current prohibition on the TAB offering in-play wagers on races. At present, the TAB is only allowed to offer in-play wagering on sports represented by National Sporting Organizations.

The government isn’t yet ready to authorize betting on novelty prediction markets, but has referred the matter to a wider review of gambling being undertaken by the Ministry for Internal Affairs.

Guy said the proposed changes “are not designed to get more people gambling – it’s about recognizing the value of New Zealand events to offshore operators, and attracting New Zealand money currently gambled overseas back within our framework.”

Further to that last point, the government has negotiated a new formula under which the NZRB kicks back a portion of its betting revenue to Sport New Zealand. The new formula will apply after GST, gambling duties and problem gambling levies are deducted from net betting revenue.

Left unsaid in Guy’s announcement is how New Zealand intends to enforce its new rules for international operators. Many countries have attempted similarly punitive restrictions that have largely been met with shrugs from operators who lack a physical presence in those markets.

Not surprisingly, NZRB chairman Glenda Hughes issued a statement supporting the proposed changes, saying they will “help keep this income in New Zealand.” Hughes also pledged that the NZRB was working on “improving its competitiveness to enhance our customers’ experience and ensure they can receive the same level of service and options” available via international operators.

The NZRB recently selected sports betting technology providers OpenBet and UK-listed betting operator Paddy Power Betfair to upgrade the TAB’s creaky fixed-odds betting platform. The TAB website suffered an embarrassing crash last September during the most important day of the racing season.