IBIA calls on NZ government to adopt igaming licensing model

7 October 2019

The International Betting Integrity Association (IBIA) has called upon the New Zealand government to adopt a regulatory regime that allows foreign and domestic operators to secure licences for a diverse range of products.

In its response to New Zealand’s public consultation on online gambling, the IBIA cited markets such as the UK, Denmark, Sweden and Spain as evidence of the success of the licensing model.

It added that the government should also take a liberal approach to taxation, warning that a “burdensome fiscal framework” could deter potential market entrants from applying for licences.

“It is also important that, as with the countries employing a licensing system listed above, any licence fees are proportionate and wholly based on the necessary administrative costs of proper market regulation” the IBIA explained. “Licensing fees should not be used as a revenue raising tool, and in effect an additional means of taxation, which would deter operators from seeking a licence.”

The IBIA noted that taxation systems based on gross gaming revenue have proven much more effective than turnover-based taxes, such as that in France, and says it believes a tax rate within the range of 15% to 20% of the gross gambling revenue would prove more successful.

The association added that it hoped to see a large range of legal online sports betting products available, both in terms of types of bet and events on which bets may be placed. The company cited its own integrity reports, which stated that 90% of alerts came from bets on “mainstream markets” such as final results, rather than “negative markets” such as yellow cards.

“In addition to the development of a suitable regulatory and fiscal structure for sports betting, it is also fundamental to the viability of the market that licensed operators are able to offer a wide range of sports betting products,” the IBIA said. “Imposing restrictions invariably leads to consumers seeking those banned products through other markets, including unregulated offshore channels.

“The British Gambling Commission, which covers one of the largest and most mature betting markets in the world, regulates and permits all forms of betting on all types of sporting events without any restrictions. It does so whilst maintaining a close oversight of the market and is continually working with its licensed operators, adopting an evidence-based policy approach.”

The IBIA noted that the UK’s model for integrity, “is widely seen as one of the most effective and is an example of best practice in this area” and that New Zealand should adopt measures similar to the UK in terms of the regulator’s ability to: issue codes of practice, prosecute offences, exchange information, require the provision of information and to void bets.

The IBIA’s comment is a part of New Zealand’s public consultation to gauge public support for regulating new forms of online gambling. Currently, Lotto NZ and the Totalisator Agency Board (TAB) are the only operators who may offer gambling products online but the country’s government opened the consultation to discuss ideas including expanding the range of companies allowed to operate in New Zealand.

The country’s government set out four potential regulatory models to update gambling legislation. However, the IBIA said that the first three options ⁠— keeping the market as it is, expanding Lotto NZ and the TAB's product offering and allowing only domestic operators to move into igaming — were “essentially variations on the existing monopoly model.” 

The public consultation period ended on 30 September.