Online Gambling in New Zealand: How the Industry Has Evolved

Gambling was a prevalent pastime in New Zealand long before the internet. By 1951, the activity became so popular that the government established the Totalisator Agency Board (TAB) to help regulate all gambling activities in the region.

As online gambling arrived in the late 1990s, many gamblers wanted to take advantage of online casinos and bookmakers. However, the government didn’t see these as legitimate, so it never made provisions for online gambling websites to exist in the country.

Despite this, the online gambling industry has evolved significantly and will be valued at an estimated $1.25 billion in 2024. Let’s have a look at the industry’s evolution and significant changes that will likely shake things up.

Gambling Act of 2003

Although online gambling sites had reached New Zealand by the end of the 1990s, there were no local operators because local laws forbade them. TAB, which regulates all gambling, made no provisions for operators wishing to launch sites and, therefore, the only sites available to gamblers were offshore options.

The government attempted to regulate the influx of offshore operators by passing the Gambling Act of 2003. The act permitted TAB and lotteries in the country to offer their services online, restricted licenses to only these entities, and effectively banned all offshore operators.

As part of this ban, offshore operators were no longer to advertise their services to Kiwi players. While you can find top-paying New Zealand online casinos at bonus.net.nz, the Gambling Act ensures these don’t actively recruit players from the country. 

Flouting the Law

Although the Gambling Act was passed to try and create a level of regulation for online gambling in the country, it ultimately failed dismally. While no operator was able to establish gambling websites within the country, many players continued to access offshore websites that openly welcomed them.

Due to the terminology and structure of the law, this loophole has no legal repercussions for players in New Zealand. Although it makes it illegal for offshore operators to recruit players or offer services to Kiwi gamblers, the law does not affect gamblers who engage with these services.

Therefore, gamblers in the country are legally permitted to access these services, even though doing so means operating in a grey area of the law. This grey area, however, has helped online gambling using services other than national lottery operators and TAB platforms become incredibly prevalent in the country.

Online Gambling in 2024

Although the Gambling Act was passed in 2003, there has been almost no change to regulation since then—even though the iGaming industry has experienced substantial growth. This means that, currently, players using offshore gambling services are still doing so using a loophole in the law.

The use of these services has been exacerbated through international developments in the industry that have filtered through to New Zealand. Among these is the rise of mobile gambling through websites optimized for mobiles and dedicated apps that provide casino games and betting opportunities.

While these developments and the loopholes have worked in favor of gamblers in the country, they have had some negative implications for the country. With all that money leaving the country and going into offshore operators’ bank accounts, the government is losing out on vast sums of capital it would otherwise generate through taxes.

These taxes, which could go toward social relief programs, government initiatives, or even defense contracts, are being avoided as the operators are not obligated to pay them.

In addition, with the prevalence of gambling in the country, problem gambling has also seen a rise. This, in turn, plays a part in affecting the country as some players encounter high levels of debt or battle to cope with their addiction—turning to government facilities for help and placing extra burden on the system.

Upcoming Changes

With the industry’s growth becoming hard to ignore and the negative effects that offshore operators have on the country, the government has finally decided to take steps to create a framework that will provide greater levels of regulation. The proposal to do this aims to minimize gambling harm, provide consumer protections to players, and help the government collect taxes.

Aimed to launch in 2026, the system is planned to work much like other legislative frameworks found in various US states and the iGaming Ontario system in Canada. The difference is that operators can only obtain a minimal number of licenses through auctions.

In addition to operators having to bid to secure a license, there are other stipulations that need to be met. The first is that the operator must meet all regulatory requirements based on new frameworks and some carried over from the legislation that TAB and the national lottery currently operate under.

Secondly, no operator may operate a service mixed with casino games. As such, lottery providers and bookmakers may not offer online casino games alongside their primary offerings. In other words, all online casinos must stand on their own and be clearly identified as such.

This move to create a regulated environment will have profound effects not only on players, who will be able to access locally operated online gambling platforms, but also on the country as a whole. Estimations from the government predict that more than $500 million will be collected in online gaming taxation over four years after the new framework launches.

For gamblers, having dedicated operators inside the country could lead to more targeted and personalized games, better offers tailored to locals, and a wider range of options for placing a bet.

Conclusion

Looking at the start of online gambling in New Zealand, it is clear that the majority of it has occurred in the shadows and through loopholes in the law. While this is perfectly permissible, it is a far cry from the freedom players deserve in choosing a reputable, local operator to gamble with.

While the industry has evolved significantly, the most prominent evolution is still underway and, if all goes according to plan, will flip the industry upside down in 2026. Whether enough licenses will be offered to make this evolution successful remains to be seen, as a lack to implement a new framework properly could push players back to the offshore casinos they’ve come to know and love.