From current and recent policy changes, it is clear that Nicola Willis understands the benefits that the online casino industry in New Zealand can have for its economy. Online gambling is a divisive topic in many countries around the world, but it is one that you should not ignore and should acknowledge for the benefits it can bring, just as Nicola Willis has.
Nicola Willis, the New Zealand Finance Minister, has made her position on online gambling clear through policy decisions and actions. In 2023, after some study and research, she stated that she would be implementing GST and other duties against offshore black market casino platforms operating in New Zealand. New Zealand’s Government has since introduced an offshore gambling duty, which requires offshore platforms to pay an additional 12% duty, in addition to GST, for the privilege of operating in New Zealand.
This decision to allow the platforms, but to ensure that they are taxed and regulated, is an intelligent one that you should understand as a reflection of Willis’ thoughts on how the online casino industry can be helpful for an economy. It seems that Willis and the NZ government are cognisant of the fact that these platforms will always exist, and attempting to ignore or block them from operating isn’t a viable choice. History has always shown that prohibition doesn’t work. Rather, they regulate and tax the platforms, allowing new online casinos in New Zealand, but at the same time ensuring NZ consumers are protected while also gaining a significant measure of tax revenue as well.
Is taxing online gambling really a good thing?
Short answer, yes. By levying tax against online gambling platforms, the NZ government also bring in a stronger regulatory environment. This means that they can ensure a fairer and safer online casino market for NZ consumers, as well as gain a boost in revenue.
Nicola Willis stated in 2023 that she wasn’t a fan of the black market online casino industry that was operating in and around NZ’s digital space, but that she was ready to “regulate it and… tax the heck out of it”. This shows remarkable presence of mind, as she is allowing the greater benefits of being able to have some effect on the market, and gather tax revenue to outweigh her personal concerns about the activity of online gambling itself.
Willis also displayed a commendable grasp of the reality of the online casino industry surrounding her country and its potential for growth. She stated in 2023 that the online casino market was already large and that it was forecast to grow much faster than other areas of NZ’s gambling markets. The NZ Government introduced a new Act in March of 2024 that included the offshore gambling duty, which is nothing short of evidence that Nicola Willis meant and believed what she had said earlier, and has acted on what she believed.
What exactly are the benefits of taxing the gambling market?
We’ve looked at Nicola Willis’ thoughts and can see the follow-through of her actions, but what exactly are the benefits that can be gained by the NZ government from greater taxation of the online gambling market?
Boost to government revenue
To put it very simply, more money. In 2024, the NZ government was estimated to have gained approximately NZ$500 million from regulated online gambling platforms, in addition to revenue from the lottery and physical casinos. Just like governments everywhere, this revenue will go towards nationalised services, infrastructure and anything else the NZ government sees fit to spend money on.
A fair market
Particularly in gambling markets that include long-standing domestic operators, taxation and regulation of offshore platforms means a level playing field for all. This means that the marketplace should be competitive and, therefore, fair. The more competitive an online casino marketplace, the more likely it is that platforms will need to offer good incentives to players to gain their custom.
Safer and more responsible gaming
New Zealand’s government is regulating as well as taxing these platforms. This means that they are enforcing on them all the same consumer safeguards that customers at domestic online and physical casino spaces enjoy. Things such as age verification, responsible gambling advertising and other responsible gaming initiatives are the standard. By regulating the market, the NZ government is protecting its citizens.
What challenges are there in taxing this industry?
Now that we’ve looked at some of the benefits that taxation brings, let’s look at what makes taxing and regulating these offshore platforms difficult.
Compliance is not easy to enforce
Unfortunately, many offshore black market gambling platforms will simply refuse to cooperate and trust that users will bypass any obstacles put in the way of using them. As well as outright refusal, many of these offshore platforms are set up and designed in such a way as to make bypassing regulations part of their bread and butter, and they might have confusingly labyrinthine company structures designed to obfuscate the truth of their origin. The remedy for these concerns is increasingly expensive monitoring systems and IP blocking.
The market moves fast
Being entirely digital and often backed by cutting-edge technologies, the online casino market moves incredibly fast. New platforms, new payment methods and other changes are distressingly frequent. Regulatory and tax systems tend to move much slower than the market, so operators can be flexible enough to sidestep the behemoth that is a state’s bureaucracy. While this constitutes a constant drain on a state’s resources, the revenue gain is typically more than up to cover the task.
To sum up
It’s true that it has been a couple of years since Nicola Willis spoke specifically about the online casino industry and how it is affecting the NZ economy, but we can extrapolate from her previous statements and her following actions. The strategy of the NZ government and Willis seems a wise one, to acknowledge the existence and growth of the market and then to impose reasonable tax and regulatory oversight.
As the online casino market surrounding NZ continues to grow and evolve, we should expect further regulatory and taxation legislation and growth as well.