Regulatory relief for class 4 gambling operators and casinos Operational Update1 July 2020
Regulatory relief for class 4 gambling operators and casinosOn 1 July 2020 the Government introduced a number of regulatory amendments to mitigate the impact of COVID-19 on the gambling sector. These acknowledge the significant impact of COVID-19 on the gambling sector and the flow-on effects for community funding. The regulatory amendments extend and supersede the interim relief measures that DIA implemented in March and April 2020, which included:
The Gambling (Fees) Amendment Regulations 2020 and Gambling (Class 4 Net Proceeds) Amendment Regulations 2020 take effect on 1 July 2020. In brief, the amendments:
Suspending regulation 10(1) will relieve non-club societies of the obligation to return a minimum of 40 per cent of gross proceeds to the community for 2020 and 2021 financial years. Suspending regulation 11 will provide societies with an opportunity to accumulate adequate working capital reserves to achieve financial viability. The expectation is that community distributions will continue and return to the required minimum as soon as the working capital reserves have been achieved. Financial viabilityThe issues around liquidity and financial viability are longstanding, and we are pleased to have had the opportunity to work with the Gaming Machine Association of New Zealand (GMANZ) to resolve these issues. From 1 July 2020, non-club societies will be able to retain enough gross proceeds to enable them to maintain a ratio of current assets to current liabilities of up to a maximum of 1.5:1. It's important to note that this allows a cash reserve only. The reserves cannot be used to purchase fixed assets (for example gaming machines or gaming equipment). Financial viability assessments will be paused as a new process is developed, taking into account the new asset to liability ratio. Societies can continue to operate on their existing licence until their licence is renewed. The Department will actively monitor societies’ activities, accounts, and returns to ensure they are maximising returns to the community. DIA is pleased to have the continued support of GMANZ on the work to implement these changes, and in particular to develop operational policy for both managing the transition period and ongoing financial viability assessment. Licence renewal – submit full applications by 31 July 2020As part of our transition to business as usual, DIA will no longer be automatically extending licence renewals. All Class 4 gambling operators who were due to renew their licences between 30 March 2020 and 30 June 2020 will need to ensure full applications are received by DIA by UpdatesWe will continue to update the DIA gambling website regularly. If you have specific questions, please email us at gambling@dia.govt.nz. |