WELLINGTON, New Zealand – A controversial plan by the New Zealand government to license and allow advertising for online casinos has ignited a fierce debate, pitting the potential for economic growth against concerns about a surge in problem gambling.
The government is set to auction off 15 online casino gambling licenses, a move that would, for the first time, allow these operators – many expected to be foreign-owned multinationals – to advertise their services within the country. Internal Affairs Minister Brooke van Velden argues that advertising is essential for the viability of the new market.
“How do we ensure that it’s actually profitable enough or beneficial enough for someone to even want to bid for the license?” van Velden questioned, suggesting that restricting advertising would make the licenses unattractive. “If you are an online gambling outfit, and you can’t even advertise, you are probably going to sit there wondering, why are you even here?”
But critics, including problem gambling advocates and even some within the existing gambling industry, are sounding the alarm. They warn that a flood of advertising will normalize gambling, lead to inducements, and ultimately increase rates of problem gambling.
“It just feeds into the normalization of gambling,” said Andre Froud, a spokesperson for the Problem Gambling Foundation. Froud argued that such inducements “should be prohibited”.
Martin Cheer, managing director of Pub Charity Limited, a major operator of “pokies” (slot machines) in New Zealand, predicted a “bombardment of advertising” that would significantly alter the media landscape. He contrasted this with the already-substantial advertising from existing gambling entities like Entain, TAB, and Lotto.
The core of the disagreement lies in the projected impact on the overall size of the gambling market. Minister van Velden insists the aim is not to expand the market, but rather to channel existing online gamblers toward regulated, safer platforms. “The aim is not to expand the size of the gambling market.”
However, Froud and others remain unconvinced. The Problem Gambling Foundation states that they “had no idea it would be as high as that [15 licenses]. We had thought around five.”
Further complicating the picture is the sheer scale of the existing, unregulated online gambling market. Documents released under the Official Information Act indicate that the total value of online gambling transactions in New Zealand could already be a staggering $3 billion annually – larger than the country’s racing industry and double the size of the national lottery. Because this market is currently unregulated, the data is not concrete.
The size and impact of the new system. Jason Wallbridge, Chief Exectutive of Sky City casino, said that research done showed that seven licences would be a better fit for the country.
The government maintains that regulating the market will allow for better data collection and monitoring. “Once we regulate the market, we can actually capture that data and figure out whether or not it does increase over time,” van Velden said.
The new regulatory regime is slated to go into effect by February of next year, setting the stage for a potentially transformative shift in New Zealand’s gambling landscape. Whether the government’s gamble on regulation and advertising pays off, or leads to a surge in problem gambling, remains to be seen.