New Zealand has opted for a ring-fenced approach to its gambling policy with funds to be allocated specifically towards community and grassroots sports requirements. The decision has been influenced by the desire to bring parity between domestic and offshore online casino and sportsbook operators, with a government chief adding that the move would be subject to a review after two years.
Brooke van Velden, New Zealand’s Minister of Internal Affairs detailed how gambling duty will rise from 12% to 16%, with the 4% increase to be ring-fenced and allocated directly to communities and sports.
“While I am confident the regulated online casino market will provide new community funding opportunities for New Zealand sports clubs and community organisations, I do acknowledge that predicting the exact impact on existing Class 4 (pokies) returns creates some uncertainty“, she said.
“Cabinet has agreed on a two-year review after implementation of the community returns policy to assess the impact of online casino gambling on other forms of gambling and community returns.
Van Velden continued: “The message from communities was loud and clear – if we’re regulating online gambling, they want to see benefits flow back to local sports clubs, community groups and grassroots organisations.
“I have listened, and now as a government, we are delivering on what matters most to communities across the country.”
The minister then sounded a warning on necessary protections and safeguards, commenting:
“Problem gambling prevention and harm minimisation standards are non-negotiable and unchanged. Protecting Kiwis from gambling harm is still my number one objective.
“Community funding will not compromise this Government’s commitment to reducing gambling harm“, she concluded.
Van Velden’s firm stance against online casino proliferation
33-year-old van Velden has been across the gambling brief in NZ, since taking up her ministry position in November 2023.
In July this year, she fronted the government’s proposed online casino legislation, which is set to introduce a maximum of 15 licences for online casinos in the country.
She has been firm in her position against the proliferation of gambling operators within the overall framework.
Questions have been asked about the impact of gambling-related harms and how the gambling is penetrating local communities and the economy, including the presence of offshore operators in New Zealand.
In response, Van Velden asserted her confidence in the upcoming review of the regulation system: “This evidence-based review will inform necessary adjustments allowing us to make informed policy decisions based on real-world data in future“, she said.
The Minister of Internal Affairs continued, “This is new money on top of existing funding from pokies, Lotto and TAB (statutory body for sports betting in NZ). We’re not taking anything away, we’re adding to what’s already there.”
The ACT Party politician believes the new bill to introduce change will fill a void that is long overdue, as well as performing a critical function to bolster New Zealand’s regulatory framework for gambling.
Van Velden explained: “Right now, Kiwis are gambling on thousands of overseas websites with no safety nets, no spending limits, and no recourse when things go wrong. That’s unacceptable.
“This Bill brings those operators under New Zealand law, with proper consumer protections, harm minimisation measures, and now, community benefits.”
These factors will be major drivers to support the new policy. The ring-fencing method may be new to New Zealand’s gambling framework, but it is a common approach in other markets, including Australia where the targeted funding takes place.
However, it is believed the NZ approach will be more specific and defined, compared to the Australian model.
The tougher stance on offshore operators will also stimulate the domestic casino market, with existing operators able to compete better within the system of 15 licences.
Ring-fencing considerations in the UK
However New Zealand isn’t the first country to take this approach, in fact the UK is trying to do something similiar… In the UK, the ring-fencing approach has been considered as part of measures to address high-risk gaming activity.
The issue was discussed in a recent Select Committee hearing, but as expected, the UK Betting and Gaming Council reacted strongly to oppose the concept.
MPs are keen to pursue the potential option for targeted funding so the dialogue and considerations around ring-fencing are likely to continue, even if no change is imminent.
