Entain subsidiary sent advertising materials days before TAB partnership was enacted
TAB's new operator, Entain, appears to have breached the New Zealand Gambling Act within a week of receiving ministerial approval.
Racing Minister Kieran McAnulty gave the London Stock Exchange-listed gambling giant the green light to take over TAB operations for 25 years on May 23, guaranteeing an investment of $900 million in the New Zealand racing industry over five years.
Cabinet will also extend TAB’s monopoly over sports and racing betting to the online environment, where there are currently little to no regulations.
Newsroom has seen an email sent by Entain subsidiary Party Casino to a New Zealand customer on May 29, just days before the partnership came into effect and a week after McAnulty’s thumbs up, promoting a free sports betting offer.
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The email advertisement began, “Hi ******, How about a fantastic sports betting offer?”
Advertising of overseas gambling is banned by section 16 of the Gambling Act 2003.
The two-decades-old Gambling Act 2003, widely accepted as no longer fit for purpose, gives the Department of Internal Affairs limited powers to address infringements from offshore providers.
Andrée Froude, a spokesperson for industry watchdog the Problem Gambling Foundation, said advertisements like Party Casino’s emails just shouldn’t happen. “It is not legal for those offshore operators to be advertising to New Zealanders and we know that they do all sorts of things to get around our laws.”
An Entain spokesperson said it was aware of claims a subsidiary had sent promotional materials to a New Zealand-based customer but didn't further address the advertising issues, instead drawing attention to New Zealand's wider lack of online gambling regulation.
"It is important to note there is currently no legislation that prevents the hundreds of offshore casino operators or offshore wagering providers from transacting with NZ residents."
The spokesperson said it was supportive of regulation being put in place immediately.
"Following receipt of ministerial approval and completion of the partnering arrangement, Entain have commenced the shutdown process for the small number of NZ resident customers engaging with Entain subsidiary brands such as Party Casino and Bwin."
The Problem Gambling Foundation has other concerns about Entain’s behaviour.
The UK Gambling Commission fined Entain £17m last year over “completely unacceptable” safer gambling and anti-money laundering failures, largely within its well-known Ladbrokes brand.
It also copped a A$78,540 fine from the Northern Territory state regulator in February this year for urging a heavy gambler to open a Ladbrokes account, which he did under a false name, then failing to identify his behaviour as the customer gambled through A$3.3m of his financial planning firm’s customers' money.
Australian financial regulator Austrac is also undertaking an anti-money-laundering investigation into Entain.
According to research carried out by consultancy firm Regulus for SkyCity, Entain made an estimated $2m in New Zealand markets in 2020.
When asked about Entain’s New Zealand advertising activities, McAnulty didn’t entirely answer Newsroom’s questions, but said the new TAB operating entity would need to comply with all New Zealand law, including any legal requirements under the Racing Industry Act 2020, the Gambling Act 2003, the Overseas Investment Act 2005, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
“When considering the partnership arrangement, I had been particularly aware of the harm minimisation requirements of that Act and I have been determined to make sure it is a good deal for harm minimisation.
“I am confident that Entain’s size and scale will allow TAB NZ to provide better harm minimisation than the status quo. I also note that the partnership will not prevent the Government from further regulation for harm minimisation, and I have been clear with TAB NZ that I intend to do this.”
Currently only Lotto and TAB are allowed to operate online gambling websites in New Zealand. SkyCity’s online casino offering is based in Malta for this reason and Christchurch Casino is also looking to launch an offshore online gambling platform.
New Zealand is aggressively targeted by online gambling sites, mostly from overseas, because it is one of the few developed nations without legislation regulating online casinos. Total online gambling revenue increased from $139.3m in 2014 to $332.6m in 2020, according to consultancy firm Regulus. It could hit $600m by 2025.
The Department of Internal Affairs has been looking at the laws governing online gambling since 2019, with a distinct lack of progress. A recent change in ministers – Jan Tinetti has been replaced by Barbara Edmonds – plus the upcoming election are unlikely to speed up any legislative change.
