Not all countries are online gambling-friendly, but operators usually find a way to beat the system in place and offer their games and services to players. A prime example of this is SkyCity casino in New Zealand: it exploits a very visible loophole in the system to offer its games to players from this country. This is not the first time we’ve talked about SkyCity using a legal loophole in online gambling, which you can read about if that interests you.
Online gambling in New Zealand is regulated by the Gambling Act of 2003. With a focus on control and minimization of gambling-related harm to NZ players, this law prohibits gambling in the country. Additional goals that the law has include guaranteeing fair play and openness in the industry while ensuring zero incidence of gambling-related crimes.
Specifically, the Gambling Act of 2003 bans local operators from offering online gambling in the country. The only online gambling operations that are legal are Lotto NZ, which is run by the NZ Government, and sports betting, which is run by TAB.
The Act does a fantastic job of ensuring the safety, to a large extent, of NZ players. However, it extends only to local operators and doesn’t cover operators that are licensed by an overseas licensing authority or jurisdiction. And that is the catch that SkyCity is exploiting back in.
SkyCity, one of the big names when it comes to gambling in New Zealand and Australia, launched its online casino in 2019. The move was propelled by data that showed a frantically skyrocketing demand for online casino gaming among NZ players.
The challenge of course was the legal situation in New Zealand thanks to the existence of the Gambling Act. SkyCity, in a masterstroke, sailed across this hurdle by collaborating with an external agency, the Gaming Innovation Group (GiG), a much-respected operator with offices in, you guessed right, Malta!
Malta is known to have one of the toughest licensing bodies in the entire industry – the Malta Gaming Authority (MGA) – and ha what is considered a tax-friendly environment. The SkyCity casino, therefore, operates with a license from the MGA and in collaboration with the GiG.
By adopting this approach SkyCity is able to give Kiwi players the opportunity to explore gambling online.
The driving force behind SkyCity’s decision to work with a license from the MGA could be laid out to be purely economics. Players from New Zealand spend over $160 million annually at online casinos that are run by overseas operators, vital funds that the New Zealand government had absolutely no privy to.
It took the call to go with the MGA license and also simultaneously informed New Zealand’s Department of Internal Affairs of its decision to go ahead with the online casino and not wait for NZ-friendly online gambling laws to materialize. AS a result of the SkyCity move, the Government had to act quickly and it did that, asking for public submissions to introduce a regulatory framework for online gambling.
From an economic standpoint the SkyCity online casino is a masterstroke because it allows the casino legal access to the New Zealand online gambling market. This in turn creates a potential gold mine in terms of finances that the company has access to.
It does affect the national economy as well; the company contributes healthily to the national economy through the GST payments it makes year after year, on time. However, the profits go to Malta. The implication is simple – the NZ government loses out large-scale on tax dollars.
Critics have another take to the issue – according to them the SkyCity online casino would contribute exactly to the problems that the 2003 Gambling Act was looking to take care of, especially gambling addiction. Policy makers are taking this to the next level by clamoring for an overhaul of the 2003 Act.
Advocates of reform have taken the standard stance of asking the government to ensure they are able to regulate the NZ players’ access to offshore gambling sites and also make existing laws more stringent to help quell this issue.
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