The Minister of Internal Affairs, Hon Mark Burton, has released the terms of reference for the next phase of the gaming and gambling review.

Mr Burton said it is a "first principles" review.

"Existing gaming legislation has grown over the years on a piecemeal basis as new objectives and gaming activities have been recognised," he said. "As a result there are inconsistencies, both within specific statutes and between them.

"We need to consider how New Zealanders want gaming activities to be run and regulated, and ensure that as far as possible our legislation meets those expectations."

The review will assess and make recommendations on:
 the existing institutional, ownership and regulatory framework of the gaming industry (except for those changes already announced by the Minister for Racing in respect of the Racing Industry Board and TAB);
 the allocation of gaming profits and the systems for their distribution;
 the impact of technology on gaming, including cross-border gaming;
 the different taxation regimes applying in different parts of the gaming industry;
 the extent and nature of the social and personal costs of gaming, and the nature and funding of harm minimisation strategies.

"In the first instance, Cabinet will consider possible objectives and principles for government intervention in the gaming industry," Mark Burton said.

"A public consultation document will then be released early next year and wide public discussion and consultation will be encouraged.

"Cabinet will consider policy recommendations in the middle of next year, following the public consultations. I hope to introduce legislation late in 2001, for enactment in 2002."

The Department of Internal Affairs will manage the review, reporting directly to the Minister of Internal Affairs. The full terms of reference will be available on the web site of the Department of Internal Affairs at: www.dia.govt.nz

Attachment: Gaming Review Terms of Reference

Contact: Chris Roberts, Press Secretary 04 471-9773 or 025 270-9012, or
Pamela Fleming, Department of Internal Affairs, 495-9436
GAMING REVIEW: TERMS OF REFERENCE
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 (eg. 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 and the Government has a range of ownership and other interests in a number of organisations (eg 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 (eg. “housie”), non-casino gaming machines, Internet and cross-border gaming.

Key Tasks
Specifically, the project will:

a. review and report on any changes in the gaming sector which have emerged since the 1995-96 Review of Gaming;

b. 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

c. subject to Government decisions on (b) above:
i. 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;
ii. 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;
iii. 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;
iv. 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);
v. 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;
vi. 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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