The steeple of NZ's biggest casino. Photo: Dave Rowland/Getty Images

SkyCity’s bet on offshore online gambling lays bare the crapness of NZ’s law

SkyCity want to open an online casino. What makes them any different from the sharks already here, asks Don Rowe.

In a presentation to shareholders announcing a record $169.5 million net profit, SkyCity this week signalled their desire to launch an online casino. That’s despite legislation which on the face of it prohibits New Zealand forays into online gambling. But New Zealand’s casino giant appears to have found a workaround. 

The Gambling Act, which reads largely as a harm-reduction manifesto, is essentially toothless when it comes to regulating offshore operators, as Internal Affairs minister Tracey Martin told The Spinoff recently.

Thus success for SkyCity in the online arena depends on either the law being changed law or finding a way under the existing rules to take on the competition. And judging by comments yesterday from Chief executive Graeme Stephens, SkyCity is opting for option two.

“You’ve got to be pretty globally competent, if you are going into the online space, and we don’t have any of that competence today, so if we were going to do anything, I’m pretty confident it would have to be with a partner at least to start with,” he told Stuff.

Notably, because offshore operators are outside of government jurisdiction, they are free to employ all manner of aggressive sales tactics, manipulative deposit incentives and near-ludicrous fund management terms – as detailed the Spinoff’s story on Jackpot City.

When the Spinoff asked the minister about the legality of SkyCity’s course of action, Martin said she was unaware of any legal exposure SkyCity would face, and that the company would be free to enter into an arrangement with an offshore provider licensed in another jurisdiction.

“This would likely put them on the same footing as any other offshore gambling operator and under current law, New Zealanders would be able to access those gambling products,” she said.

In May, SkyCity spokesperson Colin Espiner noted that unlike offshore operators, the company complies with a vast array of legislative requirements, including harm minimisation measures, anti-money laundering legislation, local employment law, company tax laws, gaming taxes and GST in both Australia and New Zealand.

But despite Stephens’ insistence that SkyCity wouldn’t do anything “aggressive” in this space, a partnership with an established offshore company would mark a significant shift, making an overhaul of the Gambling Act more urgent.

“This is one of the reasons why it is important to look at the regulatory framework for online gambling,” Martin told the Spinoff.

“Our current legislation is based on three principles – of community benefit, harm minimisation and trusted providers – and gambling online with offshore operators disrupts that.”

Questions also remain around government owned bodies such as the TAB, who engage in many of the same practices as the offshore companies Martin has condemned, including deposit-matching and bet-pushing via text and email.

“I’m intending to take a paper to cabinet about updating the laws around online gambling as soon as I can,” said Martin. “After that is done, there will be a chance for public input into this work.”

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