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New Zealand’s online gambling landscape is on the verge of a major transformation as the government prepares to implement comprehensive regulation of the digital betting sector for the first time. The forthcoming Online Gambling Bill, set to take effect in February 2026, will create a licensed marketplace that fundamentally restructures how online gambling operates in the country, with significant implications for both local and international businesses.
The Department of Internal Affairs (DIA) has estimated that New Zealanders currently spend over $300 million annually on online gambling, with total turnover potentially approaching $3 billion. This substantial economic activity has been taking place in a regulatory grey area – Kiwis can legally gamble on offshore websites, but local companies cannot lawfully offer online casino services to New Zealand residents.
The new legislative framework aims to bring this activity under proper oversight by auctioning 15 online casino licenses to qualified operators. This represents perhaps the most substantial change to New Zealand’s gambling laws in decades, creating both opportunities and challenges for businesses in the sector.
According to Internal Affairs Minister Brooke van Velden, large international gambling companies are expected to secure the majority of the 15 licenses being auctioned. “We don’t have a huge online gambling market, so I would expect that it’s mainly offshore providers,” van Velden noted when discussing the likely outcomes of the licensing process.
International platforms have significant advantages in the digital gambling space, including established technological infrastructure, brand recognition, and vast player pools across multiple countries. Companies like Bet365 and PokerStars have already attracted substantial New Zealand customer bases despite operating from offshore, demonstrating the strong market position of international firms.
The government’s decision to allow foreign operators to compete for licenses has triggered opposition from domestic gambling businesses. SkyCity has advocated for restricting licenses to entities with a New Zealand presence, arguing that this would ensure gambling profits remain subject to New Zealand income tax. Similarly, TAB has expressed concerns that an open market would jeopardise existing funding streams for racing and sport.
The new regulatory system will require licensed operators to pay GST, a gambling duty of 12 per cent, and contributions to the problem gambling levy. However, unlike traditional gambling venues such as pokies, TAB outlets, and physical casinos, online operators will not be required to distribute a portion of their profits to community organisations.
This represents a significant departure from New Zealand’s historical approach to gambling revenue distribution. Currently, Class 4 gambling (pokies) operators must distribute 100 per cent of profits to community groups, with an estimated $1 billion industry supporting local sports teams, emergency services, and community initiatives.
Business analysts suggest this policy shift could result in substantial revenue flowing offshore to international shareholders rather than being reinvested in New Zealand communities. The Cabinet has acknowledged in internal documents that community funding could suffer if gamblers shift from TAB and Lotto to online platforms operated by international companies.
The new legislation will also transform the competitive landscape by permitting licensed operators to advertise their services in New Zealand – something currently prohibited for offshore gambling businesses. The DIA has recognised that allowing advertising is essential for a functioning regulated market, providing transparency for consumers about which operators are licensed and therefore safer to use.
Industry insiders suggest this change will lead to significant growth in gambling-related advertising across New Zealand media channels. This creates new revenue opportunities for media companies but has raised concerns among public health advocates about normalising gambling behaviour.
For businesses in the gambling sector, the ability to advertise legally represents a critical component of market development. Minister van Velden noted the commercial necessity of allowing marketing activities: “If you operate an online gambling enterprise and are unable to promote your product in a legitimate market, you may find yourself questioning your existence in this space.”
While the National Party had campaigned on generating significant revenue from online casino operators, suggesting that a 12 per cent gaming duty would bring in approximately $179 million annually, the government now projects more modest initial returns. Minister van Velden has indicated that the Crown might only receive about $13 million in additional annual revenue during the first few years of implementation.
Nevertheless, the online gambling sector represents a growth opportunity for technology providers, payment processors, and marketing firms that support the gambling ecosystem. The regulatory framework creates a more stable business environment for ancillary services compared to the current unregulated market.
Licensed operators will face strict compliance obligations designed to prevent problem gambling, fraud, and money laundering. This necessitates significant investment in technological solutions for:
These requirements create business opportunities for compliance technology providers and consultants specialising in gambling regulation. Companies that can deliver effective, cost-efficient solutions for meeting these obligations will find growing demand for their services as the market develops.
New Zealand is one of the last developed countries to regulate online gambling, following behind jurisdictions like the United Kingdom, Australia, and numerous European nations. This late-mover position allows New Zealand to learn from regulatory successes and failures elsewhere while giving businesses time to prepare strategic responses.
For international gambling operators, New Zealand represents a relatively small but profitable market with high digital adoption rates and a strong rule of law. For local businesses currently involved in physical gambling operations, the regulatory changes present both competitive threats and potential diversification opportunities.
As the 2026 implementation date approaches, businesses throughout the gambling ecosystem will need to carefully position themselves for the new market structure. Those that successfully navigate the regulatory transition will be well-placed to capture market share in what promises to be a substantially reshaped industry.
The government’s approach to online gambling regulation reflects a broader trend of bringing digital markets under appropriate oversight while attempting to balance commercial interests, consumer protection, and social responsibility. How well these competing priorities are balanced will ultimately determine the business landscape for online gambling in New Zealand for years to come.
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Jonno says:
We need some change. I love a good bet!