For more than 20 years, New Zealand operated one of the more curious gambling arrangements in the developed world. Under the Gambling Act 2003, it was illegal to offer online casino games from within New Zealand. Yet it was not illegal to play them.
Residents could – and did – spend freely at offshore platforms headquartered in Malta, Curaçao, and Gibraltar, with no consumer protections, no recourse if an operator behaved badly, and no tax revenue flowing to the New Zealand government. The prohibition was real. Its effect was to outsource the market entirely to operators the government could not touch.
That arrangement ends on 1 May 2026, when the Online Casino Gambling Bill commences. From that date, advertising by unlicensed offshore platforms becomes illegal. Up to 15 licensed operators will be permitted to offer online casino games to New Zealanders from December 2026, subject to harm minimisation requirements, quarterly reporting obligations, and a new offshore gambling duty. The government calls it bringing the market into the light. Critics call it legalising and expanding a market the government couldn’t control. Both, to some degree, are right.
How the gap stayed open for so long
The Gambling Act 2003 was designed for a different internet. Its prohibition on remote interactive gambling targeted domestic suppliers – and, in that narrow sense, worked. No licensed New Zealand entity has ever offered online casino games to domestic players. The act simply did not contemplate that an offshore operator could serve millions of customers from a server in another country, with no physical presence in New Zealand, and face no legal consequence for doing so.
Research estimated 156,000 New Zealanders aged 15 and over were using overseas online casinos in 2023-24.
The government’s own data, when it finally looked closely, told an uncomfortable story. Tax records identified NZ$342.5 million flowing to offshore platforms in the year to June 2023. Health Ministry research estimated around 156,000 New Zealanders aged 15 and over were using overseas online casinos in 2023-24.
Independent estimates of total annual player spending ran higher – NZ$700 million to NZ$900 million. Every dollar of that was spent with platforms that owed New Zealanders nothing: no mandatory self-exclusion tools, no deposit limits, no problem gambling protocols, and no obligation to respond to a complaint.
The government moved first on sports betting. In June 2025, the Racing Industry Act was amended to make TAB NZ the sole provider of online race and sports wagering to New Zealanders – a structural change that eliminated offshore competitors in that segment at a stroke. The Online Casino Gambling Bill followed within the week, introduced to Parliament on 30 June 2025. It passed its first reading 83 votes to 39, and cleared its second reading on 3 March 2026.
The policy rationale – stated explicitly in Cabinet materials – is channelisation: the theory that a competitive, well-regulated domestic market will attract players away from grey-market offshore platforms and into an environment where harm minimisation obligations actually bite. It is the same argument regulators in Ontario, the UK, and several European jurisdictions have used to justify licensing models over prohibition. Whether it holds in practice is the central empirical question the New Zealand experiment will answer.
What the new regime looks like
The architecture is more deliberate than it might appear. Up to 15 licences will be issued – one licence per platform brand – with no single operator permitted to hold more than three. Licences run for up to three years and are renewable for up to five. The allocation process runs across the second half of 2026: expressions of interest open in July, an auction in September, applications in October, with licences issued from 1 December 2026.
The consumer protection framework attached to each licence is substantive. Licensed operators must verify all users are over 18, prevent problem gambling, refuse credit, maintain internal complaints processes, and submit quarterly reports to the Secretary for Internal Affairs. Connection to a national self-exclusion register is proposed if one is established. Advertising by licensed operators will be permitted from mid-2027, gradually and with restrictions, including a prohibition on affiliate marketing and strict controls on content that could reach under-18s.
The financial structure addresses two pressures the select committee process made impossible to ignore. The offshore gambling duty rate rises from 12% to 16% of gross gambling revenue (GGR) from 1 January 2027. Of that, 4% of GGR is ring-fenced for community returns – a direct response to the thousands of submissions, many from sporting organisations, expressing concern about displacement of the existing community grant system.
The government estimates this will generate NZ$10 million to NZ$20 million annually, though the actual figure will depend heavily on how much of the grey market can be channelled into the licensed sector.
The select committee process was, by any measure, intense. The bill attracted significant opposition – from sporting bodies, from public health advocates, from Māori and Pasifika communities, and from lawyers who flagged gaps in the drafting. That opposition shaped the final text. The duty increase, the community return ring-fence, and several harm minimisation provisions were all strengthened in response to submissions. A three-year operational review is built into the legislation.
Three things the bill leaves unresolved
The channelisation assumption
The bill’s central logic rests on an empirical claim: that a licensed domestic market will meaningfully displace offshore gambling activity. This is the premise that makes harm minimisation matter – mandatory protections only protect people who are actually using platforms covered by them.
The evidence from comparable licensing exercises elsewhere is encouraging but not conclusive. Regulated markets in Ontario, the UK, and parts of Europe have captured significant shares of total online gambling activity. But the offshore market does not disappear; it competes on the same devices, at the same hours, often with more aggressive welcome bonuses and fewer restrictions. From December 2026, unlicensed offshore operators are prohibited from serving New Zealanders, with fines up to NZ$5 million for violations. The problem is that most of those operators are headquartered in jurisdictions that will not enforce New Zealand judgments, and VPN use is trivially easy and already widespread. Martin Cheer, managing director of Pub Charity, put it plainly in his select committee submission: you cannot stop the worst of the worst in that environment.
This is not a problem unique to New Zealand – it is the structural challenge every jurisdiction faces when moving from prohibition to licensing. The success of the regime depends on channelisation achieving a sufficient share of the market to make the harm minimisation obligations count in practice. The three-year review will be the first real evidence base.
Harm minimisation vs. market development
The bill’s stated priority is harm reduction. Its mechanism is competition. These two objectives are related, but they create real tensions in the design details.
The Problem Gambling Foundation, among others, has argued that granting 15 operators permission to advertise in a market that has been – by default if not by design – free of online casino advertising amounts to market development, not harm reduction. The concern is specific: inducements. Welcome bonuses, free spins, and matched deposit offers are standard commercial tools in online casino markets, and research consistently links them to re-engagement of problem gamblers. The bill does not prohibit inducements. That omission has drawn sustained criticism from harm minimisation advocates and public health researchers.
“Granting 15 operators permission to advertise in a market free of online casino advertising amounts to market development, not harm reduction.”
The concern is amplified by the demographic distribution of gambling harm. Submissions to the select committee included detailed evidence that Asian communities in New Zealand are disproportionately affected by gambling harm – one estimate put the rate at nearly ten times higher than for the general population. Māori and Pasifika communities are similarly overrepresented in problem gambling data. For these groups, a new cohort of licensed, advertising-permitted operators does not obviously represent an improvement in their situation.
The bill’s defenders point to the alternative: those same communities are already gambling at offshore platforms with no mandatory protections at all. A regulated market with imperfect harm minimisation tools is preferable to an unregulated one with none. That argument is not unreasonable, but it does not settle the question of whether the specific harm minimisation settings in the bill are calibrated appropriately.
The community funding equation
More than 50 sporting organisations – representing everything from national cycling to regional sports trusts – have argued that the bill threatens the approximately NZ$170 million in annual community grants currently distributed from gaming machine (pokie) proceeds. The argument is structural: if online casinos draw spending away from physical gaming machines, the pokie trust system loses revenue, and community sport loses grants.
Whether NZ$10 million to NZ$20 million per year is adequate compensation for potential displacement of NZ$170 million in existing grants depends on how much market share the online sector captures – and how quickly.
The government’s response – increasing the duty rate and ring-fencing 4% of GGR for community returns – partially addresses this. Whether NZ$10 million to NZ$20 million per year is adequate compensation for potential displacement of NZ$170 million in existing grants depends on how much market share the online sector captures and how quickly. The sporting bodies that led this campaign remain sceptical. The built-in three-year review is the mechanism for revisiting this if the numbers diverge from expectations.
The Pou Tangata National Iwi Chairs Forum raised a different concern: that the bill’s obligations did not adequately reflect Treaty principles or the disproportionate impact of gambling harm on Māori communities. These submissions were acknowledged but did not result in explicit Treaty obligations on licensed operators – a gap that advocates are likely to revisit as the regime beds in.
The regulator’s challenge
New Zealand does not have a standalone gambling commission. The Department of Internal Affairs (DIA) administers the Gambling Act 2003 alongside a broader portfolio, and it is the DIA that will run this regime – building and operating a novel licensing architecture, enforcing an extraterritorial advertising ban, monitoring quarterly compliance reports from up to 15 operators, and coordinating with the Problem Gambling Foundation on harm minimisation standards, all in real time.
The DIA signalled its enforcement posture early. In late 2025 – under the existing advertising rules, before the bill had even cleared Parliament – the department fined four social media influencers and an offshore operator a combined NZ$125,000 for illegal advertising. That was a deliberate message: this time the rules will be enforced.
Gambling law specialists appearing before the select committee cautioned that the consultation-to-implementation timeline was tight and that significant gaps remained in the drafting – gaps that would need to be resolved through regulation rather than legislation. That matters, because it means the DIA will have substantial discretion in shaping what the regime looks like in practice: on advertising standards, on the detail of harm minimisation requirements, and on how the community return mechanism is administered.
That regulatory discretion is both a feature and a risk. It gives the regime flexibility to adapt as the market develops. It also means the quality of outcomes will depend substantially on the DIA’s capacity and willingness to exercise that discretion in the public interest – not the commercial interest of the 15 operators who are about to become the government’s primary source of information about how the market is working.
What happens next
The immediate test is the 1 May advertising ban. Unlicensed offshore platforms – the ones that have been serving New Zealanders freely for two decades – are now legally prohibited from advertising to them. The DIA has demonstrated it will use its existing enforcement powers. The question is whether enforcement can scale to cover the breadth of the grey market, including social media channels, affiliate networks, and streaming platforms that have been used by offshore operators.
The longer test begins in December 2026, when licensed operators go live. From that point, the regime is live and measurable: how much of the NZ$700 million to NZ$900 million grey market is channelled into the licensed sector? Are harm minimisation tools being used, and by whom? Is the community return mechanism generating the projected revenue? Are unlicensed operators still accessible and still being accessed?
Regulators in Australia – still debating whether to license domestic online casinos at all – will be watching closely. So will those in the UK and Canada, where questions about how much channelisation a licensing regime actually achieves, and whether operator-led harm minimisation tools protect the people most at risk, remain live and unresolved. New Zealand has made a choice that most jurisdictions are still deliberating. The three-year review will tell us whether it was the right one.
