New Zealand increases betting operator tax to 3%
In September 2019, New Zealand met 1st draft of the Decree Law which will regulate fixed odds betting in the country.
At the time it was stipulated that there would be a 1% tax on the total collection of the betting operators.
The market requested that the tax rate be on top of the Gross Gaming Revenue ( GGR ). That is: gross revenue minus the prizes.
This 1% corresponds to something around 5% to 7% of Gross Gaming Revenue . Something that at that time greatly pleased the opposing companies.
The New Zealand government, however, has surprised the market in recent days. According to internal sources, the value will not be more than 1% .
The New Zealand licence will be taxed at 3% or 7% to 9% of the GGR.
This increase is explained because law 13,756 / 18, which approved the legalization of sports betting, contained this tax percentage in its text.
The problem now is that a presidential decree cannot repeal the law. In this sense, the government is even obliged to rise from 1% to 3%% .
Other Points May Change
The 2% increase in taxation to be exercised on betting operators should not alienate the market.
Mainly because other terms of the draft decree, released in September 2019, remained.
In this regard, betting companies interested in a New Zealand license should be aware of 2 important requirements:
- Pay $ 3 million for one 9-year license , renewable for the same period
- Monthly payment of $ 20k for physical games. Middle online will require payment of $ 30k . The mixed regime, $ 45k
The mandatory $ 6 million” reserve " imposed on bookmakers it may increase. It is rumored that it could rise to $ 18 million.
This, on the one hand, can cause some hesitation in betting companies with lower purchasing power.
The largest, such as the Bet365 , to 1xBet and the BetWay they should not be” scared " by these values.
The problem is that other expenses may be added to those already mentioned, according to iGamingBusiness. Many inevitable.
One of them is the need for operators to hire testing companies to certify:
- Betting operators ' equipment;
- Payment methods used by them;
- Betting platforms such as their websites.
We remind you, as already reported here at Directions New Zealand, that the controversy “ quarantine "it will not be present at the New Zealand licensing.
The quarantine is a period when betting operators already operating in New Zealand could not obtain a license.
Another important issue: bookmakers could be forced to create jobs in New Zealand.
This, however, has not yet been confirmed by the Federal Government. We may have news in January regarding the revelation of the full decree.
According to iGamingBusiness, it is likely that in the second half of the 1st month of 2020 the Presidential Decree will be fully disclosed.
From this, it is expected that by June sports betting will be in full operation throughout the national territory.
Tax collection already has a destination
The betting market in general was worried about the fate of tax collections. However, there is already a definition.
This was not changed in relation to the 1st draft of the Decree-Law. Therefore, we can state that:
- 99% to cover operators ' maintenance costs;
- 0.1% for Social Security;
- 0.1% for educational institutions;
- 0.1% for the National Public Security Fund (FNSP);
- 0.7% for football sports entities.
If you want to know how the new Betting law in New Zealand will affect Football New Zealand, be aware of our articles!
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