The House Always Wins, But New Zealanders Lose: How the Online Space Exacerbates Gambling Harm
By olivia bing
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Introduction
By now, everyone is intimately familiar with the crevices and pores of former cricketer Brendon McCullum’s face. For a while, he faithfully appeared before every YouTube video, aggressively encouraging viewers to sign up to an obscure gambling website, before speeding off into the sunset in his luxury car. McCullum is the brand ambassador for 22Bet, a gambling website located in Cyprus. Though it is illegal for bookmakers overseas to advertise in Aotearoa New Zealand, 22Bet found a legal loophole. As YouTube is an international company, the ads were able to be promoted to New Zealanders, with a well-known Kiwi cricket icon as its face. Thankfully, YouTube has pulled the ad, but this situation has brought light to our shaky gambling policies.
The Harms of Gambling
What makes this ad so disturbing is viewing it in its context. Gambling in Aotearoa is everywhere, with the four legalised types being: the Lotto, TAB sports betting, electronic gambling machines (pokies), and casino gambling. Though gambling may have some benefits, such as funding community activities, even these are contested. The Department of Internal Affairs found Lotto’s claims of 100% of its proceeds funding the community to be misleading. Gambling’s harm-related costs can be severe and wide-reaching.
Problem gambling is growing, and it is affecting many groups. Harmful gambling is described in s 4 (1) (a) of the Gambling Act 2003 as “harm or distress of any kind arising from, or caused or exacerbated by, a person’s gambling; and includes personal, social, or economic harm suffered.” The Ministry of Health’s research showed that 22% of New Zealand adults are affected at some point in their lives by their own or someone else’s gambling.
According to a 2022 report by the Ministry of Health, gambling harm disproportionately affects Māori, Pacific, and some Asian communities. Māori were found to be 3.13 times more likely to be problem gamblers than non-Māori and non-Pacific peoples. Gambling harm most prominently materialises in two ways. Firstly, New Zealanders lose approximately $2.6 billion annually from gambling. Findings show that particularly in socioeconomically deprived communities, people spend 3 times as much as people in least-deprived communities.
Secondly, harmful gambling does not only affect the gambler, but impacts their loved ones too. There is a strong correlation with domestic abuse and harmful gambling behaviour. Former Auckland councillor Josephine Bartley’s mother had a chronic gambling problem, which eventually led to losing their Māngere family home. Children are also drawn into the system early. Surprisingly, there is no minimum age to buy a Lotto ticket. Although winnings are limited to below $1000 before requiring parental permission, it allows children to play in the system and experience gambling’s addicting effects – such as dopamine rushes. Children are also susceptible to video game gambling. For example, research found 28% of Pacific young people spend over $20 per month on video game loot boxes.
The Online Gambling Space Exacerbates Harm
With the background in mind, Brendon McCullum’s 22Bet endorsement appears all the more sinister. His presence as a Kiwi cricket icon brings legitimacy to this uncontrolled, offshore gambling website. What McCullum does not mention is that the Gambling Act cannot protect New Zealand participants, due to 22Bet being overseas and thus outside the Act’s jurisdiction.
As companies have found, our legal system has many loopholes when it comes to online gambling. The Gambling Act 2003 hasn’t been updated to account for technological advances since its enactment. Despite s 16 of the Act prohibiting online gambling and online advertising within New Zealand, companies have exploited our regulations’ deficiencies. New Zealand is described as a “grey market”, due to its lack of barriers and taxation of offshore websites. Similarly to 22Bet, many gambling companies are located offshore in order to bypass New Zealand regulations, allowing Kiwis to gamble without restriction. For example, SkyCity and Christchurch Casino have launched an online gambling platform in Malta. Furthermore, despite online advertising being illegal, the domain name “ChristchurchCasino.com” still allows Kiwis to easily search and locate the site.
Surprisingly, these companies are not breaking any laws. The Department of Internal Affairs stated that under the Act, they are “limited in what measures [it] can take against overseas online gambling platforms”. These sketchy methods have immensely benefitted gambling companies. A conservative estimate shows that revenue has increased from $139.3 million to $332.6 million between 2014 and 2020. This is highly concerning, as without regulation, these companies could spread virtually unlimited amounts of harm.
Further, the Government is selling the TAB to the British gambling corporation Entain. It is currently unclear what this means for problem gambling- especially in the online space. However, the Problem Gambling Foundation has raised concerns over Entain’s predatory advertising practices, such as promoting online casino games to pregnant women in 2018. Up until now, the Government had regulated the TAB. However, moving forward, the offshore private company simply promises to “foster a meaningful relationship” with the Problem Gambling Foundation and similar organisations. Such claims have already rightfully garnered much scepticism. This deal could likely exacerbate gambling harm due to Entain’s enormous global reach. In fact, it is difficult to see how the deal benefits New Zealanders in general.
Next Steps
The Gambling Act hasn’t been reviewed for 20 years. This is drastically outdated and doesn’t account for any of the technological changes that have occurred. It is crucial that the Government considers the impacts of online gambling advertising, and access to the platforms themselves. However, in light of the selling of the TAB to Entain, it is unclear how Parliament plans to proceed. Though it is difficult to outline what exactly should be done, a starting point would be to monitor and regulate the alarming means by which gambling companies target Kiwis in shifty, and ethically dubious ways.
Meagre reforms in this area are insufficient. For example, the Internal Affairs Minister announced reforms to the gaming machine industry that will require pokie machine venue staff to register problem gambling and be trained to aid problem gamblers. However, this reform doesn’t support wider regulation of the industry, nor does it regulate existing machines.
Even with reforms, online gambling and gambling advertising remain unregulated. The Government is now considering banning online betting, apart from the TAB, to address and reduce harm-related risks. It will be interesting to see how the Government addresses offshore gambling platforms, which currently evade New Zealand regulations. As it is only early days, there is currently no indication or plan as to how Parliament intends to take on this momentous task. Hopefully, the Government will act quickly on their claims, lest the opulent seduction of 22Bet haunts our screens once more.
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Featured image source: Pxfuel