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Online gambling sites fake NZ connection

At least 13 offshore gambling websites are using New Zealand website addresses, and one is using the New Zealand coat of arms.

While the sites have addresses ending in “.nz” they are not run from within New Zealand or subject to New Zealand’s stringent gambling regulations.

Only Lotto and TAB have approval to run gambling products online in New Zealand. Part of their approval includes a requirement to return a portion of the proceeds they collect to community groups.

The Department for Internal Affairs (DIA) believes the offshore operators are cashing in on New Zealand’s brand of a well-regulated country and the websites could potentially be run by criminal organisations.

It has contacted the hosting providers of the websites in an attempt to get them removed, said the DIA’s director regulatory systems (gambling) Chris Thornborough.

“One of the sites we contacted was brazen enough to use the government’s official Coat of Arms. We can only presume this was done to suggest some sort of formal connection with the New Zealand government or our local gambling laws.”

Thornborough said the department has suspicions one of the sites it has contacted may be run from within New Zealand. If this is true, there could be legal implications.

For the others, there is little the DIA can do, other than ask for the removal of the coat of arms, and suggest hosting providers remove the sites.

New Zealanders can legally gamble on sites outside of the country but the DIA worries for the safety of consumers who choose to do this.

“These operators can exist in unregulated or under-regulated places and can be run by criminal organisations looking to cheat you out of your money or use the contact to attempt to hack identities.”

Rogue operators could be running gambling sites which give punters zero chance of winning.

In contrast, New Zealand’s Lotto operates under strict rules to ensure chance. A recent Official Information Request made by a member of the public to the New Zealand Lotteries Commission through the FYI site demonstrates the level of regulation involved in ensuring even the balls are free from any defect of property which might cause a skewing of results.

Each ball is checked at least once every 10 draws for weight and size in the presence of Audit NZ and visually inspected before each draw.

Between draws, the balls are stored in a tamper-proof case and then in a chest with a dual lock. One set of keys is held by Lotto NZ, the other by Audit NZ. The chest then goes into a similarly dual-locked steel cabinet. Audit NZ inspects the balls again before each draw to ensure they have not been tampered with.

Offshore gambling sites do not offer the same level of assurance.

“There is no way to tell whether a jackpot or a playing opponent are real, whether the odds are genuine, or even whether it is a game of chance at all,” said Thornborough.

While Thornborough can give the advice to consumers to steer clear of offshore sites including those which have a website address ending with “.nz”, the DIA can do little to stop them.

To purchase an “.nz” website name, correct address details must be provided. The address does not have to be a New Zealand address.

Victoria University of Wellington’s associate professor Susan Corbett wrote for Newsroom she thinks this approach should be reconsidered and New Zealand should follow Australia’s lead where “.au” website names can only be purchased by people or businesses with a physical or legal address in Australia:

“The Australian government requires the .au Domain Administration (auDA) to operate this ‘closed’ regulation model because .au is considered a public good. auDA’s most recent strategic plan confirms it will “continue to promote the .au space as a trusted, well-recognised space run for the benefit of all Australians”.”

“There's these fly-by-night operations that are operating out of, under-regulated or unregulated spaces. That's just an open invitation for criminals to get involved."

InternetNZ runs the administration of New Zealand’s domain names. Chief executive Jordan Carter said 82 percent of New Zealand web addresses are registered to a New Zealand owner. Australians account for 11 percent, and the remaining 7 percent of “.nz” addresses have owners based in other countries.

Rules around ownership were established 15 years ago and are currently under review.

“One of the questions that's come up is whether we should follow what some other jurisdictions doing and require some kind of local legal presence or other connection to New Zealand.”

The review is expected to be finished next year.

The DIA will continue checking for illegal operators and is taking a strong consumer protection stance, said Thornborough.

“There's these fly-by-night operations that are operating out of under-regulated or unregulated spaces. That's just an open invitation for criminals to get involved.

“What may look like a legit gambling site may not be a legit gambling site. It may literally be just a way of conning people or ripping them off.”

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