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New Zealand’s SkyCity casino to venture online

Tue, Mar 12, 12:12pm by Staff Writer

New Zealand’s SkyCity is set to roll out an online casino by the end of the year to compliment its bricks and mortar casinos.

SkyCity first revealed its ambitions to expand into online gambling last August.

The company currently operates integrated entertainment properties with casinos in New Zealand and Australia.

It is illegal to provide online gambling services from within New Zealand, but Sky City plans to exploit a loophole in the country’s law and base itself abroad.

It will be unable to run its business from Australia, since online casino games are prohibited under the nation’s revised gambling laws from 2017.

It is estimated up to $400 million per year is being leached offshore from Kiwi gamblers to unregulated overseas websites, according to Stuff.

Sky City wants to reclaim some of the $180 million that goes to online casinos.

The casino giant has told the New Zealand government it is unwilling to wait for law changes to allow it to operate a Kiwi-based site.

Internal Affairs Minister Tracey Martin said she was “disappointed they are forging ahead” but said the move showed the inadequacy of existing laws.

Government’s worldwide are struggling to tax and regulate the expanding online gambling market.

British-based online sports betting side bet365 turned over $47 billion in bets last year alone.

SkyCity is currently prohibited from running an NZ-based site, but can’t be prevented from launching one offshore, which accepts payments in NZ dollars and is aimed at Kiwi gamblers.

Ms Martin said the move “highlights how inadequate these laws are – it’s not just for them, but also the huge number of offshore gambling games that are coming into New Zealand now … that we have no way to control.”

Regulation & safe gambling under the microscope

SkyCity’s site would be unregulated, but it is understood it wants to blunt criticisms from pokie operators and the Problem Gambling Foundation by installing anti-problem gambling mechanisms and offering to ‘pay’ the right tax rate on any earnings – or alternatively donate it to charity.

In August, Ms Martin signalled she would take a paper to Cabinet proposing new regulations for online gambling.

SkyCity is understood to be confident Martin will push for regulated NZ-based sites to be permitted, if only to recoup some of the revenue lost, but any law changes will be at least two years away.

SkyCity opted to not try and reinterpret existing laws, instead choosing to pursue an offshore route.

Many online gambling sites are based in the European country of Malta.

As it stands, SkyCity cannot promote the new site to New Zealand gamblers and will have to instead rely on news reports for publicity.

Pokie operators are opposing the news that SkyCity are looking to venture online, saying it could cut into their market.

The chief executive of New Zealand Community Trust, the biggest pokie trust in New Zealand said an online platform might not pay the same duties or taxes and wouldn’t be compelled to return money to the community.

Mike Knell said this is vitally important and that it “should be preserved so that our grandchildren and future generations can participate in sport and community events on an equitable basis.”

Another senior pokie industry figure said while monitoring problem gamblers in pubs could be hard, “it’s a damn sight better than the complete absence of control that occurs in the online gambling space.”

A senior KPMG executive Michael Andrews studied the ‘black’ economy for the Australian government last year and estimated that $2 billion a year was leaking from Australia to overseas bookmakers.

If that figure was extrapolated to New Zealand, based on our comparative population, it would suggest about $400 million leaving New Zealand per year.

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