New Zealand introduces amendment bill for offshore betting

Business News

The Government is pressing ahead with a plan to make foreign bookies contribute financially to the racing and sports industry.

A government working group said levies on foreign bookies could help plug a cash leak from foreign betting that it estimated was costing the industry $45 million a year.

However, Internal Affairs, which will administer the levies, has expressed caution about forecasting how much money they might raise, noting that it would have to rely on foreign firms voluntarily paying the charges.

The Racing Amendment Bill introduced to Parliament by Racing Minister David Bennett on Monday would require the likes of Ladbrokes to pay an “information charge” when they took bets on New Zealand racing and sporting events.

They would also have to pay a separate “consumption levy” on any bets they took from New Zealanders, on events either inside or outside of New Zealand.

The size of the levies is not fixed in the legislation and would be set out later by ministers.

Foreign bookies could be fined up to $50,000 if they failed to pay up, according to the legislation.

The working group forecast there would be a high level of voluntary compliance with the regime by foreign bookies.

But former Internal Affairs policy manager Steven Waldergrave said in a regulatory impact statement published by the department in March that there were “reasons to be more cautious in this assumption”.

The collection of the charges “would rely on voluntary compliance from offshore operators” given the “extraterritorial issues”, noted Waldergrave, who has since left the department.

The push to make foreign bookies contribute to the local racing and sports industries has been prompted by a growth in betting on New Zealand sports events though overseas bookies, including by New Zealanders.

Foreign bookies are not allowed to advertise their services in New Zealand, where the New Zealand Racing Board’s (NZRB’s) TAB, holds a statutory marketing monopoly.

But there is nothing to prevent them from taking bets from New Zealanders online.

The working group estimated that 40,000 New Zealanders placed bets worth $518m through overseas websites in $518m, resulting in potential lost income of $40m for the racing industry and $5m for sports organisations.

“New Zealanders can bet with offshore websites but, unlike the NZRB, the operators of those websites do not contribute any money back to this country,” a statement released by Bennett said.

The NZRB is separately trying to stem the flow of bets overseas by partnering with Anglo-Irish bookie Paddy Power Betfair and Britain’s OpenBet, so it can offer a fixed-odds service similar to that offered by the likes of Betfair and Ladbrokes.

It plans to offer a vastly expanded range of betting options on overseas sporting events by August next year.

NZRB spokeswoman Kate Gourdie said the TAB did pay a consumption levy in the UK in the form of a betting duty as well as fees to Australia’s Tabcorp as part of a commercial arrangement.

“We would comply with any law that we are aware of that requires us to take action in respect of our activities in that jurisdiction,” she said.