Photo: RNZ / Cole Eastham-Farrelly
The government's plans to regulate and tax online gambling will help level the playing field, says SkyCity, which has been operating its online casino from Malta for the past five years.
A Forsyth Barr report says the proposed changes are expected to help SkyCity increase its low share of the online casino market, despite the risk of a higher tax rate being applied for its land-based casinos.
SkyCity set up its online presence in 2019, using a Malta -based subsidiary to provide online casino gaming, which was still not allowed in New Zealand, apart from Lotto and the TAB.
In a statement, SkyCity said it was "encouraged" to see the government's in-principle decision to regulate online casino gambling.
"Requiring online casino operators to pay their fair share of tax and the new offshore gambling duty is a welcome first step towards a level playing field.
"SkyCity looks forward to a regulated market, where harm minimisation is one of the primary objectives."
Forsyth Barr head of research Andy Bowley said the proposed tax rate implied online casino profits would be taxed at a higher rate than their land-based counterparts.
"This higher rate suggests upside risk for land-based casino taxes," he said, with an aggregate tax rate of about 25 percent of gross gaming revenue for online casinos, compared with about 18 percent for land-based casinos.
While the the government had confirmed a 1 July 2024 start date for online casino regulation, Bowley said the details had not been finalised.
"There is still significant uncertainty on the specific details of the regulatory framework, including the nature of online casino licenses," though the changes were expected to be positive for SkyCity.
"We expect SkyCity to grow its current low share of the online casino market," Bowley said, adding that SkyCity was currently competing in an unregulated online gambling environment, which was much like the wild west.
"In a regulated environment, there'll be more controls over the behaviour of the various participants."
Meanwhile, Westpac NZ had put in place an optional gambling account block to support customers struggling with online gambling, with Te Whatu Ora estimating about 186,000 people were personally affected by gambling harm.
Westpac customers spent $136.8 million in the third quarter of last year on online gambling compared with $3.2m at gambling facilities.