Estimates regarding revenue gains vary significantly between the Inland Revenue Department and the National Party of the country.
Government in New Zealand to Benefit from Additional Tax Revenue
Gamblers in New Zealand enjoy numerous gambling activities, ranging from lotteries and instant games to prize competitions and pokies. The players in New Zealand enjoy access to a lot of action via legal gambling.
However, not all gambling activities require licencing, and moderate regulation results in the government losing out on what could be benefits added by tax revenue. According to the latest announcements, lawmakers seek to narrow the gap by implementing changes that include online gambling taxes on offshore operators.
The government can gain additional taxes worth NZ$35 million, according to calculations by the Inland Revenue Department (IRD) every year. Estimations are based on implementing a 12% tax rate on gross betting revenue and predicting 5% annual revenue growth. Calculated at a benefit of NZ$155 million across the following four years.
The National Party in New Zealand is way more optimistic with its tax revenue expectations. According to expectations, the estimated amount from online gambling taxes could reach NZ$176 million. Should the expectations of the National Party be realised, the benefit across the following years would reach NZ$716.
Goverment to Benefit from Taxing New Zealand Online Casino Operators
There will undoubtedly be significant benefits to New Zealand from enforcing online gambling taxes on operators. The estimations by the National and IRD vary considerably. The finance minister of the country, Nicola Willis, supports the levy for online gambling. She refers to the current market as the Wild West, which is problematic and unregulated.
SkyCity, which has operated its online casino for the past five years in Malta, welcomes the implementation of online gambling taxes. The proposed changes will help to level the playing field. Increase the low share in the online casino arena, according to the Forsyth Barr report.
The proposals are on par with the pre-election pledge by the National Party to introduce and ensure online casinos pay a fair amount in taxes. There is still uncertainty regarding the specific details of online casino licenses. However, everyone agrees that a regulated environment offers more control.
Government Tax Commitments in New Zealand
Significant changes are the order of the day, according to the Amendment Paper, which includes improvements and focuses on offshore online casino taxes. The aim is to close the loophole in which New Zealand operators pay more tax than offshore online casinos. Simon Watts deems the offshore online casino operators paying tax on GST unfair. In July 2024, it all changes, and a 12% increase in gross betting revenue will apply to offshore operators.
The Cabinet also decided to regulate online gambling in principle; the New Zealand Gambling Act currently regulates gambling operators in the country. The country remains one of the few that fails to regulate online casinos, which places Kiwis at risk of being the targets of corrupt offshore gambling operators.
2024 Online Gambling New Zealand Statistics
Online gambling revenue could reach US$1.25 billion this year in New Zealand, according to Statista. Statista projects annual growth of 6.03% between 2024 and 2028, resulting in US$1.58 billion in 2028. In contrast, projections indicate a market volume of US$0.64 billion and US revenue of US$23,030,00 million this year.
The key trend in New Zealand online gambling is the rapid rise of mobile gambling, as more Kiwis prefer to access online casino operators via mobile devices. Next is the growth of placing sports bets on football, cricket, and rugby online. The country’s economic stability, combined with high disposable incomes, plays a vital role in the growth of online gambling.
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