What can New Zealand learn from The New Zealand Gambling Act?
In December 2018, the former President of New Zealand, Michel Temer, sanctioned the Law no 13.756/2018 .
Known as new Betting law , it will regulate the practice of sports betting throughout the country .
According to the official text, it has 2 years to be implemented, which can be extended for another 2.
Since there is still little information about the next steps of the Federal Government, fears and expectations are great.
Even more that some countries that have legalized sports betting recently are experiencing some problems.
This is the case, for example, in New Zealand.
Reliable Sites To Bet Online
- 700+ casino games & slots
- VIP program & regular promotions
- $1 minimum deposit
Payment methods
Legalization of gambling in New Zealand
In 2015, the Portuguese government approved the legal Regime for online gaming and betting, the RJO.
The objective was, through a decree-law, to regulate the exploitation of sports betting in the country.
Why Has New Zealand regulated online gambling?
The main reasons for the inclusion of a law applied to sports betting and online casino games were:
- Keep tax money in New Zealand
- Have control over the online gambling landscape in the country
- Create a safe gaming environment for Portuguese bettors
The law has generated a lot of expectation for bookmakers and for punters, in the same way as it is happening now in New Zealand.
In practice, however, not everything went so smoothly.
To operate in the country, bookmakers need to have a specific license and follow a particular tax taxation model.
The RJO, however, stipulates a system of sky-high taxes that makes it difficult for legalised bookmakers in New Zealand to make a profit.
The result: this has greatly reduced the benefits initially stipulated for the legalization of online betting.
Large online sports bookmakers have moved away from the country and are not interested in obtaining the Portuguese license.
And many Portuguese bettors have not ceased to be illegal players, betting in houses that, even without a license, have their services available in New Zealand.
Portuguese Still Prefer Illegal Homes
Around 75% of Portuguese prefer illegal bookmakers, according to a 2018 report by Universidade Nova de Lisboa and Instituto Qdata.
The same report showed that revenues in legal games in the country reached EUR 155 million only in 2018.
But, only 66.5 million they were collected as taxes for the Portuguese government.
This number could be much higher if the tax model allowed betting sites offer good conditions to Portuguese bettors.
The total tax burden on homes
legal fees are up to 16% of the total collected, not taking into account the actual profit.
This led to legalized homes creating
odds
very low
and unattractive.
As the pass-through to the government is too high, legal houses cannot offer in New Zealand odds competitive to their bettors.
For the players, that was another hurdle.
They have few options, such as 20bet or a 22bet . Even without a license, they offer their services to the Portuguese.
After all: what's the fun of betting on your team's victory and not profiting anything from it?
Portuguese gamblers ' illegality causes tax problems
This illegality still implies problems with the declaration of income of Portuguese bettors.
They cannot transfer a large amount of money to a bank account without declaring it.
The Portuguese continue to bet on illegal houses, but they need to use alternative means of withdrawal
The most common are Paypal, Skrill, Ecopayz and even Transferwise.
This, however, is negative for everyone, but especially for the country.
Mainly because illegal gambling money continues to circulate in New Zealand.
New Zealand Follows Portuguese Example
The proposal of Law no 13.756/2018 it is nothing more than an extension of what already exists.
Currently, the only licensed gambling in New Zealand is controlled by the Federal Government.
With the new Betting law , private companies may have a license to operate in the national territory.
This license provides for online sports betting and in-person bingos in stadiums.
She also predicts that bookmakers will have full control over their operations in the country.
It will only be necessary that they follow the guidelines established by the Union and the Federal Government.
As expected, bookmakers will have to pay taxes to operate in the country.
Foreign bookmakers could be banned in New Zealand
With the RJO there was the regulation of the online gambling space in New Zealand.
This has made it forbidden to bet in unregulated houses in Portuguese territory, including those that are on foreign servers.
That's why it's illegal to bet on certain houses in New Zealand, even with VPN.
This carries risks and can be considered a criminal offense.
If the New Zealand law comes out, it's pretty much the same thing that's going to happen here.
We will no longer be able to bet on houses that do not have a regular license established by the government.
On the one hand, the new regulation brings many benefits, such as the generation of income through taxes to the state.
Legalized bookmakers can support entire government programs. Bolsa Família, for example.
On the other hand, it will further restrict New Zealanders ' options and make betting less attractive.
With very high taxes, bookmakers are limited when it comes to making offers.
This drives away bettors, as there is no point in investing a lot without a guarantee of profit.
Therefore, it will be very important how the New Zealand Government will regulate online betting in New Zealand.
Current Law Does Not Address Online Gambling
The current law, from 1941, does not regulate the New Zealand online space in relation to foreign websites.
At that time there was no internet. That is also why we want to change the old law.
That's because today New Zealand players can bet online in New Zealand, provided that on sites hosted in other countries, of course.
Regarding the procedures, what bookmakers do is open a current account in New Zealand, which is totally legal .
After the payments are processed and sent to the International server is that one can place the bet.
With it, from a legal point of view, the bet is made on foreign soil.
England Is A Good Example
It's true that New Zealand can teach New Zealand a lot about what not to do. But it is on the English model that the New Zealand Government should base itself.
England today is the largest country in terms of legalized online sports betting.
The UK moves more than £ 1.5 billion annually.
One of its differentiators is the variety of content.
Since the 1960s English bookmakers have accepted guesses about anything.
There are those who create bets on their own life, including. This makes it easier to create return and odds more attractive .
But the most important thing is the way England rate the bets.
The UK has one of the lowest taxes on sports betting in the world. Taxes on bets and on winnings is only 3%.
Future of betting in New Zealand
In New Zealand, online gambling is moving slowly, but the country is in the crosshairs of the international market.
The Remote Gambling Association, one of the entities that brings together the largest betting sites in the world, is part of the lobby in New Zealand.
According to her, New Zealand has the potential to be the second largest online sports betting hub.
The passion for New Zealand Football is one of the reasons why the country is listed among entrepreneurs in the area.
With the new law, betting will certainly finance football clubs.
And those who think that this is a great news is because they do not remember that this has already happened with cigarettes, with beers and even with automotive companies.
Today most of the teams are supported by financial institutions.
Several football stadiums, for example, have passed into private government concessions.
They were "rented" for certain periods, and the amounts collected belong to the companies that run them.
With legalized sports betting, sport as a whole can receive incentives in the country.
Step 1: Create a fair taxation system
Attracting foreign betting companies to invest in New Zealand is not enough.
This is because the country drives away many investors from abroad due to its high tax burden.
Creating a fair tax system, therefore, is the first step.
The Federal Government needs to quickly define this to convey confidence to the market.
According to Copenhagen Economics, companies should evaluate all the spending they will have before entering a licensed market.
The main evaluation points in terms of costs are:
- Tax burden
- Market restrictions, such as limitation on marketing actions
- Corporate compliance according to market niche
- Costs of acquiring a licence to perform in New Zealand
In addition to the financial costs of legalization , bookmakers still need, according to Copenhagen Economics, to weigh the benefit this legalization.
In this sense, the Federal Government needs to create a positive ground for bookmakers that will operate in New Zealand.
Only then can the country have a plumbing fee high in the domestic betting market.
Channeling rate-indicative of success
The plumbing fee is the most important concept The New Zealand Government needs to understand!
And this is very simple.
Essentially, a good plumbing rate implies that most New Zealand bettors will bet on New Zealand licensed houses.
Say the New Zealanders bet $ 300 million on legalized bookmakers and acting in New Zealand.
But at the same time, they bet $ 50 million on bookmakers outside the legal system.
In total, we would have a value of $ 350 million wagered. If we divide 300 by 350, the plumbing rate would be 86%.
That is: 86% of New Zealand bettors would bet on the legalized market.
By way of comparison, the UK had a plumbing rate of 95% in 2016.
According to Copenhagen Economics, the taxes on total earnings that households pay in the UK, however, was 15%.
In New Zealand, however, the fees are on the total volume , not about the profit .
And this makes a big difference in the activity of bookmakers, and consequently, in the quality of service they offer.
To better understand how this works, let's look at 2 examples.
Case 1: 10% VOLUME tax:
100 bettors will bet on Betclic. Each bets $ 20.
Total bets are 20 x 100 = $ 2,000
That is, they spent $ 2,000 on the House. It is on this amount that she will have to pay 10% tax.
The tax payable will then be $ 2,000 x 0.1 = $ 200.
Case 2: 10% tax on profit:
100 bettors will bet on Betclic. Each bets $ 20.
Total bets are 20 x 100 = $ 2,000.
That is, they spent $ 2,000$ for the House. Suppose that, at the end of the day, taking out the costs that the House had, your profit is $ 500.
It is on this amount of $ 500 that the House has to pay the 10% tax.
The tax payable will then be $ 500 x 0.1 = $ 50.
So the problem is not only the amount of tax in itself that houses pay, but yes what they are taxed on .
New Zealand needs to make it easier for businesses to legalise
The equation is easy to understand.
New Zealand levied high fees from companies legalized in the country.
But it kept the tax rate low. Billboard , which is owned by the Portuguese government.
This creates distrust not only among companies, but also among bettors.
For this reason, it is normal that 75% of Portuguese still bet on illegal sites in the country , for only in this way can they make their guesses with odds attractions .
Creating an environment of trust is key between government, businesses and bettors.
This is a task that we consider to be the New Zealand Government's priority at this time.
This is possible if the licensing costs are low for bookmakers.
In addition, it is important that there is a fair market restriction. Especially in terms of marketing.
The goal should be to achieve a high channeling rate in New Zealand!
Even more so if we consider the large number of New Zealand bettors.
Reliable Sites To Bet Online
- 700+ casino games & slots
- VIP program & regular promotions
- $1 minimum deposit
Payment methods
