New Zealand Saw a Surge in Gambling Spending

The coronavirus pandemic served a significant blow to nearly every industry, including that of gambling. In New Zealand, the niche took a hit due to lockdown measures to curb the virus spread. However, the industry made a tremendous comeback later in 2020, with people spending more on gambling than recorded in its history.

New Zealand's gambling business kicked off the year with an overall drop in gambling revenue during the first quarter. The country went into mandatory lockdown, which meant people could not visit casinos and indulge in the activity. New Zealand's Department of Internal Affairs, responsible for the nation's gambling industry, recorded an 18% drop in spending on pokies. Casinos counted an even more significant loss of 22% while the TAB was down by 10%. However, the lottery recorded a 13% increase in revenue, which was supported by the fact that it is more localized than casinos.

Things did not start to peak until the third quarter after the mandatory lockdown was lifted in June. The third and fourth quarters reported that pokies generated 116% profit thanks to the lifted restrictions. This surge represents about $130 million in the third quarter, indicating how steadily players are returning to machines. The games had a tremendous turnover of $252 million in the fourth quarter between October and November alone. This figure beats the highest quarterly figure record set in December 2007, which stands at $245 million.

Gaming Machine Proceeds (GMA) also benefited from the gambling spending surge to record a 6.4% increase in revenue. Chris Thornborough, the Department of Internal Affairs director, says that these positive results were unexpected. While they expected pokie and casino spending to rise post-covid restrictions, such a vigorous bounce-back in expenditures was not expected. It is even more surprising considering that the number of venues that got back to business is less than before the pandemic. Statistics indicate that for every eight gambling venues that shut down, only four opened back up.

Problem Gambling and Social Injustice

While these high revenue numbers spell good news for New Zealand's economy, they have many gambling addiction advocates worried. Andree Froude, the Problem Gambling Foundation marketing director, expressed concern about the source of all the money used in games, lotteries, and casinos. She also pointed out that more than 50% of the country's pokie machines are disproportionately set in poor communities. Therefore, the money is coming in from deprived individuals who cannot afford to lose it.

Pete Dengate was quick to argue that while this may be a concern, the sharp decline in tourists due to the travel ban would result in the melting of the fourth-quarter gains. Dengate is the current Gaming Machine Association chair, which is the pokie industry body. He stated that even if the decreasing gaming machines' argument is considered, it does not change the number of gambling addicts. Pete's statement is rooted in the fact that the upsides of the situation at hand outweigh the downsides. He says thanks to mandatory 42% pokie profits given back to the government through Gaming Machines Proceeds, New Zealand communities will have boosted health, environment, education, and sports funding.

New Zealand Gambling Industry

New Zealand has embraced the gambling industry and managed to control it. The sector operates under the supervision of the Department of Internal Affairs. The country makes the industry work for it while entertaining residents by demanding a portion of profits from all public gambling directed to the community. Gaming Machines Proceeds undertakes the profit collection. Gambling is a significant revenue source for NZ, with rising yields over the last decade. In 2018-2019, the niche collected a record $939 million as reported by the Department of Internal Affairs. While this steady rise was interrupted by COVID-19 in 2020, the industry picked in the last quarter and even broke the record for the highest revenue income in a quarter with $252 million.

New Zealand's gambling industry hosts diverse kinds of indulgences that meet different player needs. Most of the bodies that provide these services are state-owned, making it easy for the government to have a hand in how the niche runs. The various kinds of gaming in the nation are;

• Casinos

New Zealand did not embrace casino gambling until 1994, when the first establishment was opened. Today, six gambling dens operate across the country, four of which fall under the SkyCity brand in different locations, and the other two are Dunedin Casino and Christchurch Casino.

• Online gambling

Internet gambling is a legal activity in New Zealand supported by the 2003 Gambling Act. The country's law leaves no room for ambiguity in the matter and states that it is acceptable to gamble online as long as the service is not accessed from an NZ based operator. New Zealand gamblers can only access slots, table games, video poker, and live games from foreign online casinos. This opens the floodgates for a vast pool of options when it comes to sets and bonuses. However, it forces players to be cautious when choosing ideal casinos, incentives, and payment methods. On the upside, one is not required to pay tax on any winnings they collect.

• Horse racing

Bookmaking has a long history in New Zealand. The industry was thriving in the 19th century, but it was declared illegal in 1920. The activity remained banned for four decades until the Totalizator Agency Board (TAB) opened its doors in 1961 and saw the law overturned. During the time, horse race betting was reserved as an on-course activity, and it was illegal to conduct anywhere else. Today, it is still a popular option among locals and runs both offline and online. The New Zealand Racing Board (NZRB) took over as the body overseeing this gambling niche.

• Lotteries

Lotteries are among the oldest forms of gambling in New Zealand. The first official lottery event, Art Union, was conducted in December 1877 during the Otago Art Society. The New Zealand Lotteries Commission was opened over a century later in 1987 and has been running the service ever since. Lotto tickets have been available online since 2008.

Conclusion

New Zealand is currently relishing in the gambling spending surge experienced in the past few months. However, it has yet to deal with the issue of rising problem gambling related to the same.