Explanatory note
This note is not part of the regulations, but is intended to indicate their general effect.
These regulations, which come into force on 1 August 2021, prescribe matters relating to consumption charges payable by offshore betting operators to the designated authority under Part 5 of the Racing Industry Act 2020 (the Act).
An offshore betting operator (as defined in section 105 of the Act) is a person located outside New Zealand who takes bets on racing events and sporting events held in or outside New Zealand from persons resident in New Zealand.
Part 5 of the Act sets out a scheme under which offshore betting operators must pay charges in New Zealand to recognise the financial returns they enjoy from the bets they take on racing and sporting events held in New Zealand and from people resident in New Zealand. The Department of Internal Affairs is the designated authority responsible for administering the scheme, including by collecting the charges and enforcing payment through the issue of penalty notices under the Act. The effect of section 117 of the Act is that an offshore betting operator is liable to pay consumption charges if their revenue from taking bets on racing and sporting events from persons located in New Zealand, whether the events are held in or outside New Zealand, exceeds $60,000 (being the amount specified in section 51(1)(a) of the Goods and Services Tax Act 1985 for the operator to become a registered person under that Act).
The general effect of these regulations is as follows:
Regulations 6 to 10 provide further detail relating to the operation of the scheme and require an offshore betting operator who meets the threshold for paying consumption charges to—
provide their contact details to the designated authority; and
pay consumption charges, for each period of 3 months (the return period), at the rate set by the Minister based on 10% of their gross betting revenue in that period; and
file a return with the designated authority relating to the amount of consumption charges (converted to New Zealand dollars) that the offshore betting operator is required to pay in each return period; and
pay the consumption charges for each return period no later than 28 days after the end of the return period.
Regulation 11 deals with the distribution of consumption charges collected by the designated authority. After complying with section 118(1)(a)(i) of the Act, which requires the designated authority to apply the money received from consumption charges towards paying the cost of administering the scheme, the designated authority must distribute the remainder of the money in specified percentages to the department responsible for the integrated problem gambling strategy (currently, the Ministry of Health), Sport and Recreation New Zealand, the Racing Integrity Board, and Racing New Zealand (acting on behalf of the 3 racing codes) for the purposes set out in section 118(1)(a)(ii) to (iv) of the Act.
Regulation 12 and Schedule 2 set out further provisions relating to the issue of penalty notices by the designated authority in respect of unpaid consumption charges, including the information that must be contained in a penalty notice and how it may be issued, and specify penalty amounts.
Regulatory impact statement
The Department of Internal Affairs produced a regulatory impact statement on 19 May 2021 to help inform the decisions taken by the Government relating to the contents of this instrument.
A copy of this regulatory impact statement can be found at—
Issued under the authority of the Legislation Act 2012.
Date of notification in Gazette: 1 July 2021.
These regulations are administered by the Department of Internal Affairs.