Here's how blocking New Zealanders from international gambling might work
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But the Government may have other options, which include making it harder for punters to deposit funds with overseas betting firms.
Minister for Racing Kieran McAnulty announced last week that the Cabinet had reached an agreement “in principle” to prevent New Zealanders from placing bets with online bookies overseas.
It made the decision at the same time as approving a controversial deal that will see British gambling giant Entain take on the job of providing the TAB’s betting and broadcasting services in return for a 50% share of the TAB’s gambling revenues.
Entain has offered the carrot of an extra payment to the TAB if the Government chooses to entrench the TAB’s monopoly – and hence increase Entain’s income from the arrangement – by blocking gambling on rival overseas websites.
McAnulty agreed when answering questions on the transaction last week that one option might be to use a technique called “geoblocking” to prevent Kiwi punters from visiting overseas gambling websites.
That would likely involve placing a requirement on internet providers to disable access to those websites for their New Zealand customers.
McAnulty said there weren’t many ways that the Government could re-establish a monopoly for the TAB, but geoblocking was “certainly one of those options we're going to be looking at”.
As an additional or an alternative technique, the Government has also been consulting on the possibility of preventing credit card companies from processing payments to overseas – or all – gambling sites, or simply making it illegal for people to visit “unauthorised gambling sites”.
InternetNZ chief executive Vivien Maidaborn said geoblocking was not effective as it was “easy to get around” and said it could lead to “unintended consequences”.
The common way to circumvent geoblocking is to access the internet through a “virtual private network” (VPN), one feature of which is that it can disguise the user’s location.
VPNs have a variety of other uses in business.
“This is a technology that many New Zealanders have been using when working from home recently,” Maidaborn said.
Government-mandated content-blocking risked undermining New Zealanders’ trust in both the internet and the Government, and if the Government was to consider it there would need to be very thorough community consultation, she said.
“We don’t think that getting more money coming into the TAB warrants blocking parts of the internet.
“Given the risks that comes with, we question why we would allow any form of blocking so the gambling industry can get more economic returns.”
McAnulty has indicated other reasons why the Government might want to block overseas gambling would be to protect returns to the racing industry and to address its concerns that measures to limit problem-gambling might be weaker on overseas sites.
The Australian Government announced in April that it would ban banks from allowing customers to use credit cards to deposit funds into gambling accounts, although that was more to stop people from gambling with “borrowed money”, rather than a measure specifically aimed at overseas operators.
The New Zealand Banking Association submitted in 2019 that gambling providers and their customers could also circumvent that measure, for example by accepting and making deposits using other international payment services such as PayPal, WeChat and AliPay.
“Additionally, a block on credit cards would rely on overseas gambling websites using the correct merchant code. There is a risk that websites would change the merchant code to get around the ban,” it said.
SkyCity said last week that if the Government did seek to prevent people from placing bets on overseas gambling sites, it should at the same time also block access to unregulated, overseas online casinos.
Chief executive Michael Ahearne said there were currently “hundreds of offshore gambling websites targeting Kiwi customers operating unchecked”.
“Kiwis who want to gamble online are often doing so with very little knowledge of who these companies are, and with very little protection if something goes wrong.
“They’re not compelled to look out for problem gambling, they don’t give back to the community, and they don’t generate New Zealand jobs or pay New Zealand tax,” he said.
SkyCity estimated that about $250 million was being gambling through such sites in 2019 and believed that may have since doubled, in part due to the stay-at-home effect of the Covid pandemic.
Spokesperson Graeme Muir acknowledged that betting on online casinos was “not exactly James Bond”, but clarified SkyCity was not suggesting an outright ban on them.
Nor was it offering to shut down its online casino, which is based in Malta and restricts access to New Zealanders, he said.
Instead, it was proposing a block on online casinos – based either in New Zealand or overseas – that weren’t regulated under New Zealand law, he said.
