The Government is looking at clamping down on online overseas betting by New Zealanders, saying it deprives the local racing industry of important income by sidestepping the TAB's domestic monopoly and results in less Government revenue in taxes.
Racing Minister Nathan Guy has announced a review of offshore online betting to be done by a working group chaired by former National MP Chris Tremain.
Mr Guy said the TAB had a monopoly on racing and sports betting under a regime that required the Racing Board to distribute profits back into the racing industry.
This was being undercut by increased use of online betting with overseas agencies, especially in Australia.
"This means offshore organisations 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 organisations that make the betting possible in the first place."
The review's terms of reference state it was unclear the extent to which New Zealanders used offshore online betting but noted the racing industry had raised concerns that the practice was undermining investment and employment in the industry.
It said overseas bookmakers were also not subject to the same 'responsible gambling' rules as the TAB and that could lead to an increase in problem and underage gambling.
"Finally, it deprives the government of potential revenue through taxation."
Mr Guy said it was a growing trend internationally and other countries were also regulating the area.
"The issue will continue to grow and needs to be addressed now."
The working group will report back with recommendations in September.
Mr Tremain was Minister of Internal Affairs until he left Parliament last year.
Other members of the group are Racing Board chief executive John Allen, Sport New Zealand chair Sir Paul Collins, Thoroughbred New Zealand representative Greg McCarthy and two Internal Affairs officials.