Government to amend Racing Act 2003

  • Nathan Guy

Racing Minister Nathan Guy has today announced plans to amend the Racing Act 2003 and enable the introduction of charges for offshore betting operators.    

“These changes will help create a more level playing field for the TAB in the face of offshore competition, and ensure that offshore operators pay their fair share back to our communities,” says Mr Guy.  

“By law, the New Zealand Racing Board (NZRB) is the only New Zealand-based provider of racing and sports betting via the TAB.

“This system ensures any proceeds from gambling go back to the local sporting and racing activities that make that gambling possible in the first place, and that punters operate within a regulatory framework that minimises gambling harm.

“However, a growing number of New Zealanders are now gambling through offshore betting agencies who make no contribution back to our communities.

“These offshore operators use New Zealand race information for their bets without paying a royalty back to our industry for their use. Also, by not contributing any profits back to our communities, these operators are able at work at an unfair advantage to the TAB.

“A Working Group found that in 2015, about 40,000 New Zealanders turned over $518 million offshore with $58 million in losses – this represents potential lost revenue of up to $45 million for local racing and sports organisations. The Working Group also found that these figures are likely to grow.

“Having consulted with the public, the Government is now preparing a Bill to amend the Racing Act 2003 to help keep the TAB competitive and retain New Zealand customers, and ensure that offshore operators pay their fair share back to our communities.”   

The proposed changes include:

  • Enabling the introduction of an information charge for offshore gambling operators using New Zealand race data. This is akin to a royalty fee for the use of racing products.
  • Enabling the introduction of a consumption charge for offshore gambling operators accepting bets from New Zealand. This charge reflects New Zealand’s position that proceeds from betting should be returned to the community.
  • The removal of the prohibition on the TAB taking bets during a race. Currently bets can only be placed on other sports in-game.

The removal of the restriction that requires the TAB to offer bets only on sports represented by National Sporting Organisations.

The rate of the fees will be set in subsequent regulation and will be subject to consultation. However the Government expects each of the charges to be in line with two per cent of turnover, as recommended by the Working Group.

The Government has referred the Working Group’s proposal of permitting betting on novelty prediction events to a wider review of gambling being undertaken by the Minister for Internal Affairs.

“These changes are not designed to get more people gambling - it’s about recognising the value of New Zealand events to offshore operators, and attracting New Zealand money currently gambled overseas back within our framework. This will help support local racing and sports.”  

Changes are also being proposed to the formula in the Act that determines how the proceeds of betting are allocated to the racing and sports sectors.

“The NZRB and Sport New Zealand have negotiated a new formula, which is based on net betting revenue (NBR). Payments to sport would be calculated after GST, gambling duty and the problem gambling levy are deducted.  

“The new formula will account for the growth in sports betting. It will provide a greater return to sports organisations, while still benefitting racing as sports betting continues to grow in popularity.”  

A Bill is now being prepared for introduction to House as soon as practicable.

The New Zealand racing industry is a major contributor to the economy, generating $1.6 billion in gross domestic product and providing for 17,000 full-time jobs.