New Zealand is poised to reshape its gambling framework by auctioning online casino licenses to foreign companies, marking a significant pivot in its regulatory approach. Set to commence in February 2026, this initiative will introduce stringent regulations for the first time in a sector that has seen local operators express concern over potential market dominance by offshore entities.
A balanced marketplace amid global competition:
Documents revealed by Radio New Zealand (RNZ) indicate apprehension among local gambling establishments about losing significant market share to these global players. Unlike traditional gambling outlets like the Lotto, TAB, and brick-and-mortar casinos, the new online contenders won’t be required to redirect a portion of their profits to community grants—a practice that has been a cornerstone of New Zealand’s gambling revenue distribution.
Internal Affairs Minister Brooke van Velden, representing the Act Party, emphasized that the introduction of online casino licenses is an attempt to create a fair and competitive market environment. “We don’t have a huge online gambling market, so I would expect that it’s mainly offshore providers,” van Velden told RNZ. However, she also noted the dynamic nature of the auction process, where “someone else could put forward their name and say, ‘hey, I can do it better’, and that would be up to the auctioneers and DIA (Department of Internal Affairs) to figure out who could do it better,” highlighting the potential for revocation if operators fail to meet standards.
The contention over market access and community contributions is further complicated by the positions of local heavyweights like Sky City and TAB. Sky City advocated for limiting licenses to entities with a domestic presence to ensure profits are taxed within New Zealand. Conversely, the TAB’s chief executive, Nick Roberts, conveyed to Racing Minister Winston Peters that an expansive licensing strategy could jeopardize the traditional funding models for racing and sports, potentially delivering “worse harm outcomes for Kiwi consumers.”
Impact on community funding and local economy:
Critics argue that the lack of mandatory community contributions by online operators might shift funds away from local initiatives to offshore accounts. This concern is reflected in the profound disappointment expressed by Martin Cheer, managing director of Pub Charity Ltd. “Effectively, in Class 4, 100 percent of all the profits have to be given away. Well, in this instance, none of it has to be given away,” Cheer stated, highlighting the contrast between traditional and online gambling revenue allocations.
The government, while opening the market to foreign competition, insists that the main goal is not just to generate tax revenue but to ensure a safer gambling environment. Van Velden projected that the regime might only bring in an additional $13 million a year in the early phases but stressed the importance of a balanced approach to permitting legal online gambling while protecting consumers from potential harm.
New Zealand’s move to regulate its online gambling market places it among the last developed nations to do so, aiming to balance economic interests with consumer protection. As the online casino market opens, the implications for local community funding, tax collection, and regulatory oversight will continue to unfold, shaping the future of gambling in New Zealand.