The New Zealand government indicated Thursday that it could move to curb overseas Internet gambling on sports and horse racing.
Racing Minister Nathan Guy announced the appointment of a working group to "shed some light" on the growth of New Zealanders taking part in offshore online racing and sports betting.
Racing and sports betting in New Zealand is a monopoly of the TAB agency run by the New Zealand Racing Board, which is required by law to distribute all profits back to the racing industry and sports groups.
"When New Zealanders place their sports and racing bets with overseas betting operators online, they operate outside of our regulatory framework. This means that offshore organizations make money on New Zealand racing and sports without paying their fair share of tax, or making contributions back to the racing industry or sporting organizations that make the betting possible in the first place," Guy said in a statement.
"These New Zealanders are also operating outside the safety net of gambling harm mitigation that we have here."
Guy said the working group, which was due to make recommendations later this year, was the first real attempt to clarify the extent of the problem and work towards developing solutions.
"The racing industry contributes about 1.6 billion NZ dollars ( 1.21 billion U.S. dollars) to New Zealand's GDP (gross domestic product), is a major source of employment supporting over 17,000 full time jobs across the country, and has a particularly strong presence in our regions," said Guy.
"Given the global trend towards online betting, this issue will continue to grow and needs to be addressed now," he said.
"The issues at hand are complex but we are not the only country dealing with this problem. There is now a growing body of international work on this matter the working group can reference. "
The group's terms of reference said the racing board and industry were concerned that New Zealanders were increasingly turning to overseas betting agencies, particularly those based out of Australia.