New Zealand Announces 12% Tax on Offshore Gambling

New Zealand has done a lot of regulatory changes to online gambling before, which we’ve discussed in detail. And now, in a move that is set to help the New Zealand government snag a mammoth NZ$716 million annually, New Zealand announced its decision to impose a tax of 12% on all offshore gambling operators catering to players from the country. This would allow them to make money from online casinos catering to NZ players.

New Zealand’s New 12% Offshore Gambling Tax Payday

The new offshore gambling tax of 12% was introduced by the National Party in Parliament on 14 March 2024. The Party introduced it through Amendment Paper No. 20 to the Taxation – Annual Rates for 2023-24, Multinational Tax and Remedial Matters – Bill. The Amendment Paper introduced a host of proposals, one of which was the proposed offshore gambling tax.

In their new plan, the National Party talked of the proposed tax as a way of plugging a loophole by ensuring that operators of offshore casinos pay their share of taxes when they offer their wares to New Zealand players. So far, New Zealand laws require offshore operators to pay just the GST. Local operators, on the other hand, have to pay much more, in the form of:

Casino duties
Company tax
Problem gambling levies
Employment taxes
Gaming machine duty

How the 12% Offshore Gambling Tax Works

The proposed gambling tax of 12% is in line with the GST rules that the Government of New Zealand has in place for offering remote services to use systems that are already in place. As of now, the only fee that offshore operators pay is the GST of 13%, and it is applicable only for those who provide gambling services of at least NZ$60,000. The new taxation would spike up that fee to 25%.

The tax is applicable on gambling profits that the offshore operator enjoys. The term ‘profit’ has been specifically defined in the draft legislation. The onus is on the operator to also determine if the player is physically a resident of New Zealand at the time of gambling at their online casino. To do this they will need at least 2 finance-related documents confirming the same; these could be any of the following details of the player:

Bank details
Billing address
IP address
Mobile country code

The new tax, as of now, is stated to go into effect from 1 July, 2024. All required information should be filed every quarter with Inland Revenue. The proposed filing date would be the 28th day of the month following each quarter. For the quarter ending 31 March the date for filing would be 7 May.

Gambling Legislation in New Zealand

New Zealand is one of those countries in the world that doesn’t have any official legislation to regulate online casino gambling. There are laws to regulate physical land-based casinos, and there are laws that apply to casino operators located within the country. This makes it a prime destination for offshore operators.

While the new taxation policy is all set to roll into effect, there is still no confirmation on whether there will be a licensing authority created to ensure proper regulation of the casinos. Currently, all the offshore casinos offering their games and services to NZ players are licensed and regulated by authorities like the following:

Malta Gaming Authority (MGA)
United Kingdom Gambling Commission (UKGC)
Government of Curacao
Kahnawake Gaming Commission

Online Gambling in New Zealand

The online casino market is booming and New Zealand is currently one of the fastest growing hotspots. A study by Statista indicates that more than 500,000 players from New Zealand play online casino games or use online sportsbooks every year.

The annual gambling spend of a NZ player is NZ$2,200. Desktop casino gambling is quite popular, but increasingly, players are switching to their mobile devices – smartphones as well as tablets – to gamble online.

The new taxation, if and when it is implemented will obviously mean more revenue for the government. However, there will be challenges to overcome. For starters, it remains to be seen how effective the government would be in taking action against an online casino that is not based in the country.