So you want to start your own internet betting site... You've checked out some of the online betting/gambling offerings (an estimated 700 - 800 internet gaming sites operate worldwide) and you think you've got a better product.
The bad news is, if you live in New Zealand and want to set up an internet betting/gambling site in New Zealand, targeted at New Zealanders, then unless you're the TAB it's probably illegal. However, as the current gaming laws do not effectively address the issues surrounding cross border electronic gaming, if you set up an internet betting/gambling site and base it in another part of the world (where it is legal to do so, eg. Antigua) then (in practice) it is likely that New Zealanders will be able to access and participate in this internet betting/gambling site. This may be an attractive alternative, especially given the ease with which you can remotely run and operate an e-business these days.
Current New Zealand law
Three main statutes cover gaming in New Zealand: The Gaming and Lotteries Act 1977 ("GLA"), the Casino Control Act 1990 and the Racing Act 1971 ("Racing Act"). The unifying theme across these statutes is that gaming is usually prohibited, unless it generates an offsetting "community benefit". The application of this theme has resulted in pockets of licensed gaming, but generally these statutes make it an offence for New Zealanders to organise or participate in gaming of any sort which is not licensed, governed or sanctioned by the relevant acts. They also prohibit being a bookmaker or placing bets with bookmakers (other than the TAB, or at a racecourse under the Racing Act).
Electronic Cross Border Gaming in New Zealand
Therefore, according to these statutes, if you are betting online (with someone other than the TAB), telephone betting with an overseas bookmaker, playing interactive casino type games online or even (by way of business) just giving people tips on who has the best odds and where to bet online, you may be committing an offence and liable to a fine or even a term of imprisonment.
For instance, if you access an online betting site from your computer in New Zealand and place a bet with anyone other than the TAB, you'll be committing an offence (according to the GLA) as every person who bets with a bookmaker is liable for a fine of up to $500.
Similarly, if you're in New Zealand and you play for money at an overseas based online casino, you may be participating in an illegal game of chance and you'll also be committing an offence (according to the GLA) and liable to a fine of up to $500.
However, while that may be a strict interpretation of the relevant statutes, according to the Department of Internal Affairs, New Zealanders can gamble at overseas-based internet sites from their home computers, can participate in overseas lotteries, and can gamble by phone or internet through accounts established with overseas betting agencies. The Department has also indicated that if you're just dispensing advice and not actually accepting bets, they will probably not regard you as a bookmaker.
Gaming Reform in New Zealand
The New Zealand Government recognises that a comprehensive domestic gaming policy needs to be formulated. It has released a discussion paper titled "Gaming Reform in New Zealand: Towards the New Legislative Framework". This paper gives an overview of gaming in New Zealand and seeks to investigate the issues and consequences of gaming in our society. It also highlights issues surrounding electronic cross border gaming.
Given the nature of the internet, the Government may not be able to realistically detect or control New Zealanders' access to cross border gaming. It needs to keep this in mind when it formulates domestic gaming policy and designs the regulatory/taxation system. If gaming opportunities are severely limited in New Zealand, New Zealand gamblers might be encouraged to look overseas. This could have the effect of reducing gaming profits available for distribution within New Zealand, reducing the domestic tax base, increasing the risk of players exposing themselves to fraud and potentially transferring any benefits associated with gaming overseas while leaving any social costs (eg. problem gambling) in New Zealand.
The Government also needs to consider the reality of trying to prevent access by New Zealanders to cross border gaming. Technically, it may be possible to monitor and control New Zealanders' access to overseas-based gaming. However, it is not clear how successful or costly such methods would be, and what the likely cost and privacy implications would be.
This is a general summary only and should not be taken as a substitute for specific advice.
x-tech group Simpson Grierson
Web site:
x-tech group Simpson Grierson Contacts
Michael Sage, Partner, michael.sage@simpsongrierson.com
Earl Gray, Partner, earl.gray@simpsongrierson.com
Jan Kelly, Partner, jan.kelly@simpsongrierson.com
Jillaine Heather, Solicitor, jillaine.heather@simpsongrierson.com
April 2001