KIWI ONLINE CASINOS AGAINST THE LAW

10 August 2007

New Zealand government gives Christchurch Casinos seven months to shed online gambling operations

Bad news from the New Zealand press over the weekend is that the Kiwi government Internal Affairs Department has required land casino operator Christchurch Casino to exit the online gambling market within the next 7 months.

The Dominion Post reports that all bets are off for Christchurch Casino's online operations, which include two online casinos, poker rooms and online bingo venues. The company has been given 7 months to extricate itself from online gambling after the Department ruled that this form of gambling breaches the country's Gambling Act.

Christchurch Casino launched its first online casino, Kiwi Casino.com, in 2000 and later expanded its Internet gaming activities to include a portfolio of sister websites offering online bingo and poker.

The department told Christchurch Casino in August 2006 that its involvement in Internet gambling breached the Gambling Act, passed in 2003, having cleared it after an earlier investigation carried out under previous legislation, which prevented organisations other than the TAB from accepting bets from Kiwis over the Net.

Internal Affairs spokesman Trevor Henry confirmed that the Department had not sent a letter asking Christchurch Casino to "cease and desist".

However, Christchurch Casino advised Internal Affairs in October 2006 that it intended to sell the business, which it confirmed it had done in a letter to the department in March 2007. The Dominion Post report does not disclose which company bought the online casino.

Henry defended the delay, saying: "The way these things work, there are always exchanges and argument and so forth. Internal Affairs reached the decision and said `we will be sending a letter' and then in the meantime we got advice from Christchurch saying `we are selling'."

Internal Affairs Minister Rick Barker says he is satisfied with the process the department followed.

"Prior to taking prosecution action, the department sought Crown Law advice to confirm its view. It received this on 23 February 2007.

"Had Christchurch Casino chosen to keep the website and defend the issue through the courts, the process would have definitely taken longer."

Henry says the Department's investigation will be closed once Internal Affairs has confirmed that no New Zealand entity now has an ownership interest in Kiwi Casino.com.

The sale of Kiwi Casino was not made public until it was mentioned in a report prepared for Minister Barker by the department last month. The report addressed allegations of loan sharking and other impropriety at the casino that had led to calls for a public enquiry.

Internal Affairs said the allegations had been used to suggest that the casino was not properly managed and that the department was "not an effective casino regulator".

Christchurch Casino ran the company through an overseas subsidiary, Christchurch Casino E-Gaming Investments, using a gaming licence issued by the Government of Antigua and Barbuda.

Papers released to NZ InfoTech in 2002 under the Official Information Act showed that Internal Affairs let its investigation lapse after accepting assurances from Christchurch Casino that procedures were in place that made it difficult for New Zealanders to register to use its websites.

Internal Affairs' national manager of gaming compliance at the time, Gregory Crott, finally closed the department's investigation in 2002 after NZ InfoTech requested an update on its status.

He cited "the length of time taken on the investigation" as one reason for the decision.

Henry says Internal Affairs kicked off a fresh investigation in August 2005 on the initiative of its Christchurch inspectorate, a year after the Gambling Act came into force.

"As NZ InfoTech reported in 2002, the department gave Christchurch Casino the benefit of the doubt. That was under legislation current at that time. The situation changed under the Gambling Act which included a specific provision covering remote interactive gambling."

Online Casino News courtesy of InfoPowa