New Zealand-Based SkyCity to Open Offshore Online Casino


SkyCity has announced a significant expansion into online gambling, and it has annoyed some lawmakers. Recently, the New Zealand-based SkyCity Entertainment Group announced that they would launch a European-based online casino site. They are looking to tap into the $180 million in unregulated online casino wagers placed by Kiwi gamblers.

The company is looking to take advantage of a legal loophole to establish this online casino, claiming that the law is insufficient to prevent them from forging forward with their plans. SkyCity’s proposal has upset the Internal Affairs Minister Tracey Martin. However, she also admits that there is little she can do to stop them.

SkyCity to Open Offshore Online Casino

Last month, SkyCity Entertainment Group announced plans to open an offshore online casinos site somewhere in Europe. Malta is among the areas name-dropped by the company as they look to tap into the unregulated online casino market. This lucrative market receives more than $180 million each year from Kiwi gamblers.

Australia prohibits online casinos, so you’re probably wondering how SkyCity can get away with this move. While that’s true, there’s nothing in the law preventing Australian-based casinos from opening an offshore online casino. That’s the route that SkyCity is taking.

According to an article in the NZ Herald, SkyCity will pay a $40 million tax to open their online casino site overseas. It is their intention to launch the site by the end of the year. Spokesman Colin Espiner explained that the company would self-regulate the online casinos and use the same regulatory measures used for brick and mortar casinos.

One hurdle that SkyCity will face is advertising their new online casino site. Under Australian law, the company is prohibited from advertising its casino in Australia. In the past, some casinos have circumvented the law by using offshore third-parties to advertise. Nevertheless, SkyCity has decided against that. Instead, they will use advanced SEO to allow players to find their site via online search engines.

Internal Affairs Minister Disappointed in Move

Internal Affairs Minister Tracey Martin has said that the move has disappointed her. However, she says out that this move is indicative of a larger problem. She stated that the firm’s move “highlights how inadequate these laws are – it’s not just for them, but also the huge number of offshore gambling games that are coming into New Zealand now…that we have no way to control.”

SkyCity understands the frustration of Minister Martin. Consequently, it is now looking to prevent controversy by offering to pay the appropriate tax rate on any earnings that the casino receives. If the government is not willing or is not legally permitted to accept the tax, they are offering to donate the tax payment to charity.

According to reports, SkyCity is not expecting to turn a profit during the first year of operation for their online casino site due to high setup costs. Therefore, the site would not generate any tax or charity payments before year two.

SkyCity Move Could Be Template for Other Casinos

Interestingly enough, SkyCity is the first casino company to attempt such a bold move in Australia post the online gambling ban. Depending on their success, it could provide a template for other casinos in the nation to follow suit.

Granted, a better alternative would be for lawmakers to reconsider their stance on online gambling and regulate the market. Online gambling regulation would open up a significant tax revenue stream and help to quell the growing unregulated market. It would also help to protect Kiwi punters and give Australian-based casinos an additional revenue stream.