Legislative Reviews › Gaming Act Review › Gaming Review: Terms of Reference

5 November 2000

• Sectors Covered by the Review
• Key Tasks
• Project Management and Timetable

Context

In recent years there has been rapid growth in the turnover of the gaming sector, the number of people who engage in gaming, the range of gaming products, new technologies (e.g. the Internet and e-commerce) and increased access to electronic and cross border gaming. There is a perception that these trends have led to increased levels of problem gambling and could be exploited for the purposes of money laundering, fraud and organised crime.

The gaming sector currently operates under a disparate regulatory structure. This structure has grown in an ad hoc fashion, in response to concerns arising at different times and in different parts of the gaming industry. There is little consistency between the different statutes which regulate the different sectors of gaming, and a variety of different bodies exercise regulatory and administrative functions, each with a different focus and different objectives. Moreover, different sectors of the industry are treated differently for tax purposes and make different contributions to the community.

The sector embraces a wide range of commercial and non-commercial gaming activities. The Government has a range of ownership and other interests in a number of organisations (e.g. the New Zealand Lotteries Commission, the Lottery Grants Board and the Casino Control Authority). The review, however, will not delay the Minister for Racing’s proposed legislation early next year to merge the Totalisator Agency Board with the Racing Industry Board.

At the same time, technological advances have resulted in a convergence of the different forms of gaming. Distinctions between casinos, clubs and hotels providing machines and other gaming facilities are becoming blurred, as are the distinctions between gaming machines and lotteries, and between locally provided and extra-territorial gaming opportunities. Betting through interactive television, whether on sporting events or games of chance, is likely to blur the conventional distinctions in the gaming sector still further.

As a result there is a need to establish a clear view of the role of gaming in society and the role of the Government in regulating it.

Sectors Covered by the Review

It is highly desirable that the review cover the full range of gaming activities including, for example, race and sports betting, lotteries, casinos, community gaming (e.g. housie), non-casino gaming machines, Internet and cross-border gaming.

Key Tasks

Specifically, the project will:

1. review and report on any changes in the gaming sector which have emerged since the 1995-96 Review of Gaming;
2. review and make recommendations to the Government on the range of possible objectives and principles for Government intervention in the gaming industry, taking into account the current and evolving role of the gaming industry in New Zealand and overseas, the evolving technology underpinning gaming activities, the range of gaming products available, the public costs and benefits of gaming (both social and economic), the private costs and benefits of gaming, the practice of funding community activities from gaming revenues, and any other relevant considerations; and
3. subject to Government decisions on (b) above:
   1. review the existing institutional, ownership and regulatory framework of the gaming industry (including the Crown’s ownership interest in the New Zealand Lotteries Commission, the Lottery Grants Board and the Casino Control Authority but excluding its interest in the Racing Industry Board and the Totalisator Agency Board) and make detailed recommendations for any reform, consistent with the objectives and principles for Government intervention decided by the Government under (b) above, together with any recommendations for transition to a new regulatory regime;
   2. review and make recommendations on the allocation of gaming profits (including distributions which might otherwise be appropriated for those purposes by Parliament) and, if they are to be continued, the systems enabling such distributions;
   3. review the impact of technology on gaming, with particular reference to the nature and extent of cross-border gaming and the practicalities and desirability of regulating it, and make recommendations on the most appropriate form of interventions;
   4. review the different taxation regimes applying in different parts of the gaming sector, the overall tax burdens within the gaming sector and the tax burden of the gaming sector in comparison to other sectors, and make recommendations on taxation structures for gaming activities (this part of the review to be led by Treasury and the Inland Revenue Department);
   5. review the extent and nature of the social and private costs of gaming, including the potential for organised crime, fraud, and problem gambling (especially the extent and nature of the social costs of gambling in Maori communities), and make recommendations on the means of containing them and how to fund such interventions;
   6. make detailed recommendations for legislative change arising from the Government’s decisions on the issues examined in (b) and (c)(i) to (v) above, for enactment no later than April 2002.

Project Management and Timetable

The core review team will be managed in the Department of Internal Affairs and will report to the Minister of Internal Affairs.

A public discussion document outlining policy options will be released by Cabinet for consultations and analysis of submissions.

Key activities and milestones are as follows:

• February 2001: Release of public discussion document
• March/April 2001: Public submissions on the discussion document
• May/June 2001: Analysis of public submissions on discussion document
• July 2001: Cabinet decisions on the gaming review
• August/September/October 2001: Law drafting
• November 2001: Introduction of legislation
• March 2002: Enactment of legislation

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