Online casinos illegal in NZ, warns Internal Affairs

At least one New Zealander has paid $25,000 for a casino franchise which appears to be illegal, the Department of Internal Affairs said today.

The department said it was investigating Casino Slot Club's promotion of franchises for online casinos.

Keith Manch, the general manager of the department's gaming and censorship regulation group, said organising, promoting, managing or conducting online casinos in New Zealand was illegal.

Even if its computers are based offshore, any companies or franchise-holders active in New Zealand were subject to New Zealand law and could be investigated.

The Casino Slot Club, which is based in Malta, has computers in Vanuatu and a sales team in Australia selling franchises around the Pacific.

Mr Manch said Casino Slot Club's promotional material incorrectly stated that New Zealand franchise holders would "assume absolutely no legal or financial risk".

In June, the department advised the Newspaper Publishers Association that Casino Slot Club's proposal to advertise casino licences for New Zealand's South Island was illegal.

At that time newspapers did not publish the advertisements. However, it appeared that since then the New Zealand Herald had published advertising for Casino Slot Club and at least one New Zealander had already paid $25,000 for a franchise, Mr Manch said in a statement.

That person approached the Department and asked if his operation was legal.

"We have not yet decided what action we will take," Mr Manch said.

At present, the penalties for running illegal games of chance, including online gambling, include fines of up to $4000 for an individual or a jail term of up to three months, and fines of up to $12,000 for an organisation.

Under the Gambling Act 2003, most of which will come into force by the middle of next year, penalties will increase up to $20,000 on an individual or a jail term of up to one year, and fines of up to $50,000 on an organisation.

The new Act also prohibits advertising of overseas gambling. The penalty under this section is a fine of up to $10,000.

Except for the TAB and the Lotteries Commission, no other person or organisation in New Zealand will be able to sell gambling products online.

"Anyone considering buying into any online gambling must understand that they are likely to be breaking the law in New Zealand," Mr Manch said.

"I cannot stress strongly enough that they should get professional legal and financial advice before spending any money.

"The department is not a financial or legal adviser, and we cannot advise people about how they should organise their investments and what they should do with their money."

- NZPA