Online casinos in New Zealand enjoy tax and regulatory benefits but aren't required to contribute to local charities. As debates around this exemption heat up, questions arise on whether these international operators should give back to Kiwi communities.
The New Zealand online casino market is heavily regulated, and only certain entities are allowed to operate licensed casinos in the country. The Department of Internal Affairs (DIA) is the primary regulatory body ensuring gambling activities adhere to the Gambling Act.
In NZ, top casinos and betting providers are required to donate a predetermined percentage of their earnings. However, casinos operating under international licenses do not have the same obligation as they do not fall under New Zealand's local regulations. Thus, they cannot be forced to make the same charitable contributions as their licensed competitors.
Discussions regarding New Zealand's regulation of online gambling are ongoing, including discussions on how international operators should be treated regarding taxation and any contributions.
Let’s look at how the system works concerning land-based casinos and their contributions.
We mentioned charitable funds, but who exactly are the charitable organisations we referred to? The funds that are raised through these contributions are used for community purposes, including:
The government is considering exempting newly established online casinos from the same fees, but why is this exemption being considered?
Many online operators are international and subject to local laws different from those of land-based casinos. The New Zealand government sees newly licensed online casinos as an investment that will enhance competition and increase consumer choice. Most casino players are shifting to online gambling, and the government recognises that imposing fees might discourage online casino operators from entering the market.
Online and mobile casinos are not legally required to contribute to any community funds and projects, but they can choose to contribute and, in return, will foster goodwill with local communities.
The contributions can come in many forms, and they can have a positive impact on the following:
The government's plans for online casinos in New Zealand are ambitious and potentially beneficial. Internal Affairs Minister Brooke van Velden has confirmed these plans, which include permitting up to 15 online casinos to operate legally in New Zealand.
While these casinos will be liable for tax and a problem gambling levy, they will not be required to make charitable contributions. Van Velden's intention to pass legislation by the end of 2025 and set up a regulator by the start of 2026 signals a promising future for the industry.
In Canterbury, community groups received over $400,000 from Christchurch Casinos Charitable Community Trust, which helped key services weather the current economic downturn. Many contributions are made to different trusts and causes. Class 4 gaming societies distributed $345 million in 2023 through 24,000 grants to almost 10,000 charity organisations throughout New Zealand.
Currently, there are 35 gambling trusts in New Zealand, but there are what we call the 'Big Three': The New Zealand Community Trust, Lion Foundation and Pub Charity. These three trusts are the largest and most influential in the industry, managing the largest number of gambling machines and land-based casinos, consisting of 4,579 machines across 348 venues. Last year, the Big Three were responsible for 38% of the grant money.
The managing director of Pub Charity, Martin Cheer, said,
If you’re going to say to these people, we welcome you as corporate citizens, then make them responsible and make them give grants and donations. I can guarantee you they will not be put off imposing a community return, and if they are, then good riddance to them; they can go and focus on the rest of the world.
Whether or not the New Zealand government will take heed of Cheer’s words remains to be seen.
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