Casinos have been around for a long time, with Las Vegas, Marina Bay, and London being the leading destinations for any gambler. But back then, gambling wasn’t mainstream, and it was the leisure activity of only an elite few who could afford to blow up vast amounts of money. However, as the Internet became widely used and significant technological advancements were made, gambling went digital and began gaining popularity like all other industries. Coupled with the recent rapid technological advances and the rise of mobile users, gambling has become a mainstream leisure activity. The ease of gambling using smartphones from the comfort of one’s own home makes online gambling popular among players.
But how have our income tax laws caught up to this fast pace of technological advancement? Gamblers need to be aware of the gambling laws and current tax laws of the respective countries they reside. This is valid if you are playing offline or choosing to play online on offshore gambling sites. In New Zealand, all gambling activities come under the Gambling Act 2003, which states that participating in online gambling games is not illegal. However, there is a catch. New Zealand has six legal land-based casinos that are registered and licensed. But the rules of online casino games are different.
In New Zealand, the Gambling Commission of New Zealand regulates both offline and online casinos. Class 1 (rewards up to $500) and Class 2 (rewards that vary from $500-$5000 and turnovers do not exceed $25000) gambling activities are legal and do not require any licensing to operate. However, Class 3 (rewards up to $5000) and Class 4 (online gambling sites) Gambling Classes must be licensed by the Gambling Commission. However, you must note that remote gambling through communication devices is prohibited, which is different from remote foreign gambling (gambling on offshore casinos online). According to the Act, remote foreign gambling is not prohibited. So, if you participate in gambling on a website that is based overseas even though you are in New Zealand, it is not illegal. You also have to be at least 20 years of age to be considered a legal citizen to gamble in New Zealand.
In New Zealand, playing casino games is considered a hobby, and as for the taxes, there are no taxes imposed on the gambling winnings or lottery money in New Zealand. No money earned from online gambling is taxable, according to the Income Tax Act 2007, and this rule applies to online and offline winnings made. This is great news for gamblers in New Zealand. But, if you have saved this money won through gambling in a bank or invested it, the return on that money (any interest or dividends) will be considered taxable income.