Loot boxes have come under fire in New Zealand (NZ) and from consumers who disagree with the in-game rewards available for purchase. Some players have even went as far as calling loot boxes “gambling” in spite of recent game developments. The main problem that seems to be consistent among gamers is that loot boxes can be purchased and for the right amount of money, players can become exceptional players without any real gameplay knowledge or experience. Most gamers also argue that because of loot boxes and the income they create, game developers are making rewards based on gameplay even harder to acquire, sometimes unrealistic for the number of hours players spend on game.

New Zealand’s Gambling Commission has recently decided that loot boxes do not meet the criteria to be considered gambling under the Gambling Act of 2003. New Zealand official Trish Millward wrote “While the payment of money for a loot box with the contents of which are determined by chance may appear to be gambling, the Department is of the view that loot boxes does not meet the legal definition of gambling”. However, in the United States, Hawaii State Representative Chris Lee stated that “The concern is that once the algorithm identifies a player who is likely to keep spending money they lower the odds and you keep spending more. It’s absolutely unethical and unfair.” Lee is taking a stand against loot boxes and has even called the new Star Wars Battlefront 2 an “online Star Wars gambling casino”. Loot boxes are currently regulated by gambling commissions in China and Japan and are subject of investigations by gambling regulators in several other countries.

The randomized loot boxes were first introduced in China around 2007 but since has become a highly popular rewards system for the gaming industry. ZT Online was the first known game to incorporate loot boxes and is a Chinese developed free-to-play game. Intended for the gaming community in China, ZT Online used loot boxes to assure monetization from a game that developers say otherwise would be illegally ripped or played for free by consumer sharing. It was a big hit for ZT Online and eventually the network reported a monthly revenue exceeding 15 million. Loot boxes have been implemented through several different types of games since their conception but are frequently used in free games to offer in game purchases and upgrades. This system has worked well for ZT Online developers and is the driving force behind the free-to-play game market.

Recently, Star Wars Battlefront 2 has received a lot of backlash for their loot boxes, even causing developers to rid the system all together over recent game updates. A Reddit reply from EA’s community team regarding loot boxes has become the most un-liked comment in the sites history and caused the Star Wars developers to reconsider their pay for upgrade “loot box” packages. Consumers were accusing EA Sports the developers of Battlefront 2, of making special characters too hard to obtain through regular gameplay, citing that to unlock Darth Vader it takes over 10 hours of gameplay to aquire his card and obtain his character. Developers swiftly removed the option to pay for loot boxes before the game hit shelves but states that they will be back after they figure out a more reasonable system for their loot boxes and upgrades.

The Gambling Act of 2003 is the legislation that regulates the gambling industry in New Zealand, except for sports betting and horse racing. The bill has consolidated the gambling laws for the country into one law that is more effective and current. The law was put into place to support responsible gambling, limit criminal activity and monitor the fairness and integrity of the games. The Act allows for multiple forms of gambling to be classified into 4 specific classes based on the amount of the prize that can be won. There are currently 4 agencies that oversee the gambling industry regulations in New Zealand: The Department of Internal Affairs, The Gambling Commission, Gambling Compliance Group, Lotteries Commission.

It is unclear at this time if loot boxes will eventually be classified as a form of online gambling in certain countries around the world or just another part of the game but in New Zealand it is unlikely to be changed anytime soon. Until there is a growing concern or a clear reason to change what has previously been stated, loot boxes in NZ will be legal and unregulated in the gaming industry.

New Zealand’s (NZ) Gambling Commission

It is reported that New Zealand residents spend around USD $600 a year on gambling. This number would likely rise if the statistics from offshore gambling enterprises were included. However, since they are regulated offshore, their revenue streams do not directly impact the local economy. What is it about these offshore brands that draws so much activity away from local pokies and brick-and-mortar establishments? For starters, it is selection. New Zealand online casinos feature a wide host of game types, including slots, table games, specialties and more. Games are powered via software from top-rated online gambling technology providers and boast high quality animations and simple gameplay. Specialty games involve Lottery style games like Keno, which should appeal to Kiwis because a sizeable portion of their yearly gambling expenditure goes to lottery options. Free play versions are available for players to acquaint themselves to the games before betting any real money.

Pokies are land based terminals popular in New Zealand and Australia. They feature a video poker format and make up the bulk of gambling revenue within NZ. Online poker in New Zealand can be found through licensed offshore sites, and not just video poker. There are several different online game types including popular games like Texas Hold ‘Em, Omaha, etc. Local punters can access these options from the convenience of their own computer. A downloadable supplementary software creates a poker lobby where players can customize their playing filters regarding game size, pot size and more. Free play is available for players to try out new strategies and get a few practice hands in before wagering any money. The offshore poker interface supports tournament and single-game play.

If sports betting is your game, there are also online sportsbooks accepting NZ bettors. Sports like football and rugby are popular in New Zealand, with punters making online bets, bets through the telephone and television services. However, these options can be limited. Licensed offshore sportsbooks feature betting lines on sports from around the world, including popular American leagues like the NFL, NBA, MLB and NHL.

Offshore gambling has other perks like mobile and live betting/live dealer games. Their mobile suites are designed to work with most Apple, Android, Windows and Blackberry devices. Responsive design technology keeps design and gameplay elements consistent across multiple screen size dimensions. Bonuses are another huge component with offshore gambling sites. They are financial rewards given to players at no additional cost for use within the casinos, poker rooms and sportsbooks. Bonuses are designed to keep people playing and are offered throughout the year.

New Zealand gambling laws permit online activity through offshore vendors as long as they are legally licensed and regulated by a respected government. Locals may prefer to stay away from casinos as tourism increases, and offshore gambling sites provide the same high quality experience, but from the comfort of your own home.

As a manager at the SkyCity Hamilton Casino she plead guilty to stealing at least $1.98 million from the casino between the years 2008 and 2013. That plea was heard in June of this year. She was the acting general manager and finance manager of the casino, which allowed her the freedom to falsify 71 transactions and route funds to her personal accounts throughout the course of 5 years that she worked there. This casino property focuses on brick and mortar gambling entertainment destinations and does not offer any type of New Zealand online casino games.  To our knowledge she did not have access to any type of Kiwi friendly online gambling sites from which to extend her criminal activities.

In January 2016, the court heard another guilty plea from Tessa Grant for fraudulently stealing $795,000 dollars from the Waikato Diocesan School for Girls. She managed to do this as the schools acting commercial manager from December 2014 through August 2015 in various transactions. She has been charged with 2 counts of using documents to gain pecuniary advantages along with 2 more counts of altering documents and three counts of using forged documents. When SkyCity learned of the charges being brought against Grant, they revealed some more irregularities in their books, which lead to further charges being levied.

Her attorney’s defense was centered on the personal hardships that she had faced in the time leading up to the fraudulent activity. The emphasis was placed on the fact that she has recently lost her partner the year before and had financial issues that led her down the criminal path. In trying to establish a clear line of understanding to her crimes, the officiating bodies of the case were not swayed. Her offenses were deemed “clever and cunning” by Judge Philip Connell as he continued to express his reluctance to believe that Grant was merely helping her family.

Grant had used large portions of the money to buy lavish gifts for her self as she was reported to have spent over $50k on jewelry and over $60k on transporting a horse from the UK. She was also reported to have spent a significant portion of the money she had stolen on buying properties she intended on building an equestrian club on. A horse arena, a horse truck, and a $300,000 payment to a member of New Zealand’s performance equestrian team were all cited in the case.

The New Zealand Racing Board is the direct beneficiary of this amendment, should it pass. The Offshore Betting Working Group originally submitted the proposed changes back in 2015 to try and help the NZRB compete with international online gambling sites that accept New Zealand residents. The NZRB’s TAB betting service is a bit outdated and their online technology simply could not keep up with the streamlined platforms of international competitors. The TAB platform even suffered an embarrassing crash in fall of last year, highlighting their technical flaws.

One of the biggest points with this amendment is that international operators must pay a consumption charge on winnings from Kiwi punters. The Working Group suggested implementing a 2% rate, but nothing has been made official yet. In addition, international operators must turn over data regarding Kiwi punters to determine the specific amount owed. As a matter of fair treatment, operators may not be charged more than what the NZRB charges local racing and sports betting outfits.

International operators must also pay fees to use information on New Zealand racing and sporting events. Those who pull in less than $60k from Kiwi bettors are exempt from any additional charges regarding consumption and information usage. Any brand in violation of the bill’s procedures faces a $50k fine; $20k for individuals at fault. However, New Zealand’s government may not possess the clout necessary to impose such enforcement. One thing that could aid New Zealand with their enforcement is their association with the Asian Racing Federation, which recently assembled an Anti-Illegal Betting Task Force aimed at internationally licensed online gambling platforms. Despite various enforcement strategies, it will be difficult to force international brands to comply with the gambling laws in New Zealand.

In-race betting will now be available via the Racing Amendment Bill, but only bets on the final race outcome, not on race events in real time. The same policy applies to in-game sports wagering, which the local TAB betting service offers Kiwi punters. The NZRB will also have the freedom to offer betting lines on domestic and international sports that it does not have agreements with. Normally, the NZRB would have to work out a deal to determine the distribution levels of betting income, but with this bill the NZRB can offer betting lines without any prior agreements. This is arguably the best point of the amendment, because now the NZRB can offer wagering on America’s National Football League, for example, one of the biggest leagues in international sports.

New Zealand’s mission is not to encourage more gambling, but rather to increase the value of local sporting and racing events to offshore operators. They also want to reel in money currently being gambled overseas back into the local regulatory framework. If the Racing Amendment Bill passes, New Zealand will be better able to hold international operators accountable for offering Kiwi sporting events.

Unfortunately there will always be unscrupulous individuals present in every industry, and the gambling entertainment market is no exception. It is important, whether you are playing pokies online or offline, that you ensure you are only patronizing legally licensed casinos offering their services to New Zealand players. You have the least chance of encountering a negative, fraudulent or questionable set of circumstances that way.

When O’Brien was the operator of the Bluegrass trust he was found to have deliberately hidden his involvement with the gambling machine community for the sole purpose of taking illegal payments. The Department later found that he was not suitable for the position he was holding with the trust as a result of an investigation in a trust he was involved with before 2010. The Crown Prosecutor on this case was Grant Burston who remarked on O’Brien’s intentions in starting the Bluegrass Trust. “The reason he set up Bluegrass and paid money to racing clubs was so he could continue to receive a third of those payments back to himself.”

The prosecutor was aggravated by the case because he claimed the racing clubs believed they had no choice but to pay O’Brien a third of their profits. That O’Brien had deceived them into believing that’s what was required of them to continue to receive contributions from pokie machine profits. The prosecutor was further aggravated by the fact that the money that was paid to O’Brien was directly depriving the racing clubs and community organizations of funding that they very much needed.

On the other end of the spectrum, Michael O’Brien’s lawyer, Bruce Squire QC, believes that the deception by O’Brien has been exaggerated. He maintains that the deception was limited and he believes it false to illustrate his client as very sophisticated or clever. At the end of the day, his defense attorney believes that he is neither informed nor astute in his attempts to deceive people and that depiction is a tactic by the prosecution.

The Justice in the matter, however, believes otherwise being quoted to have said O’Brien’s deceptions have struck at the core of the regulation of gambling bodies. With the investigation of another trust in O’Brien’s name before this one taken into account, Justice Dobson elaborated with details of the case. “You distanced yourself from the organization of the trust, you represented your father as acting in your place by forging his signature on relevant documents and sending emails purporting to come from him.” He continued to explain that he believed the defendant to have been “relatively sophisticated” and knowingly deceived the Department of Internal Affairs and “…those who were entitled to rely on the integrity of the applicants.”

Kevin Coffey, and Paul Max were also involved, receiving their own charges of obtaining by deception and will be sentenced later in July.

During a discussion on the laws that govern casino management in Samoa, Faumuina Wayne Fong, the ruling HRPP party Member of Parliament, initiated a call on the government to reconsider their stance on allowing locals into the casinos. The Member of Parliament for the urban seat of Faleata West has informed the parliament that the board accountable for collecting revenue is in danger of extremely low earnings primarily because only foreigners are allowed into the casinos. They postulate that if the locals were allowed to access the casinos that are in their own back yards, that the total revenue for the year would reach desirable levels. It has been projected to be the definite increase that has been previously needed.

The Samoan Prime Minister, Tuilaepa Seilele Malielegaoi, thinks that the locals should stick to bingo and has frankly rejected the call to let Samoans into their own casinos. He recalls the primary reason that the casinos were allowed on the island to begin with and holds true to the previous parliament’s values to keep the dangers of gambling away from his beloved indigenous people. This strict regulation does drive Samoan residents to visit offshore destinations for gambling entertainment, such as legal New Zealand online gambling sites.

It’s not as if this decision was made decades ago. The first gambling licenses were awarded in 2010 in an attempt to recover from the 2009 tsunami, which wiped out about 30% of the local economy. It wasn’t until 2014 that the first casino in Samoa opened near the international airport at Aggie Greys Resort at Mulifanua. The prime minister explained himself on his weekly radio show before the casino opened, citing increased job opportunities and tourism to the island as the benefactors of such a decision. The idea, as reiterated by the prime minister, was to get tourists to spend more time and money on the island to and to pour new wealth into the local economy.

Today, the largest casino in Samoa is the Whitesands Casino Samoa located in Apia. It has 24 table games, 220 slot, gaming, and video poker consoles. The casino is set on a beautiful tropical landscape and has direct beach access. The Parliamentary bills committee will make the final decision after they have sufficient time to deliberate on the various claims by several members of parliament and the prime minister’s stance on the matter.

Pou’s current occupation has him working at Kentucky Fried Chicken in Matama, though nobody really expects that he will continue on with that job for any length of time.  At only 27 years old and millions of dollars at his disposal, his options have widened to say the least.

Pou, who expressed gratitude over the win and a desire to use it to help his family, won the jackpot playing Mega Moola, a popular slots game powered by Microgaming.  The game has paid out nearly 560 million euros in winnings, including a life changing $20 million jackpot won by an ex-soldier from Great Britain.

Pou was congratulated by the Head of Casino executive John Quinn who stated that being able to deliver these kinds of jackpot wins to players is a highlight of his job.  Enjoying online betting at legally licensed offshore internet casinos is not illegal in New Zealand, but there are those who would like to find a way to pull back a little bit on the growing momentum of offshore online gambling among Kiwis.  This latest multi-million dollar win is likely to spark more conversation about the controversial topic.

Individuals who are a part of the anti-online gambling movement cite problem gambling as their biggest concern.  However, the most reputable legal online gambling sites in New Zealand all take problem gambling very seriously and have integrated resource for players who are struggling with these issues.  Some sites also support self imposed limits on player accounts for those players who are dealing with their self control.  It is in their best effort to protect their players from potentially harmful effects of gambling for the sake of the industry as a whole.  If these operators were seen exploiting struggling players, it would mark the end of the industry as we know it.

Another perk New Zealand players have when playing casino games online is that they don’t have to pay any taxes on their winnings.  This includes Pou and his huge win.  As of now, there really isn’t a downside for NZ players seeking legally sanctioned online casino gambling.