New Zealand’s Online Casino Bill Advances with Community Funding Guarantee

The Online Casino Gambling Bill, led by Minister of Internal Affairs Brooke van Velden, will establish New Zealand’s first licensing and taxation framework for online casino operators serving customers in the country. Up to 15 licenses are expected to be auctioned, with initial approvals scheduled for late 2026.

Community Funding Takes Centre Stage

The committee received over 5,000 submissions on the proposed legislation. The majority came from sports organizations, charities, and community groups concerned that online casinos could reduce revenue from pub and club gaming machines, which currently provide substantial funding for grassroots sports and community activities.

The committee report supports Cabinet’s decision to integrate community returns into the new regulatory system. A portion of online casino duty will be allocated to sports clubs and community organizations, protecting them from potential declines in Class 4 gaming machine revenue.

“New Zealanders want online gambling brought under local law, but they also want funding for local sport and community projects to continue,” van Velden said. She described the report as “a crucial step” that prioritizes harm prevention while acknowledging the role gambling revenue plays in community funding.

Under the revised framework, licensed operators will pay increased duty on New Zealand online casino revenue. Part of this additional revenue will be ring-fenced and distributed through the Lottery Grants Board, which currently allocates profits from Lotto and Instant Kiwi.

Sports Organizations Secure Key Protections

Sports bodies have been influential throughout the legislative process. More than 50 national and regional organizations warned earlier this year that the original draft, which lacked community funding provisions, could undermine one of New Zealand’s primary funding sources for participation sport.

These groups have achieved a partial victory. While online casino operators will not operate their own grants programs, the higher gambling duty and Lottery Grants Board distribution mechanism will effectively supplement existing gaming machine returns with online revenue.

Van Velden has committed to a formal two-year review once the regime becomes operational. The review will assess online casinos’ impact on gaming machine revenue and evaluate whether community and sports funding remains sufficient.

Licensing Framework Details

The bill will end New Zealand’s current situation where offshore casino sites can legally accept New Zealand players while operating outside domestic regulations. Under the new framework, up to 15 licensed online casino platforms will be authorized to offer games to New Zealand residents.

Unlicensed sites targeting local players could face penalties up to NZ$5 million. Licensed operators must meet strict standards covering harm minimization, data reporting, anti-money laundering, and advertising, aligning with broader gambling regulations.

The Department of Internal Affairs estimates New Zealanders currently lose hundreds of millions of dollars annually on overseas gambling websites, with total turnover potentially approaching NZ$3 billion. Van Velden argues that bringing these operators into a licensed system will enable proper taxation, impose clearer safeguards, and redirect profits to local communities instead of offshore entities.

Market Context

Global online gaming revenue is expanding at double-digit rates, with New Zealand following this trend. Surveys indicate nearly one-third of adults now gamble online in some form, with offshore casino sites capturing growing market share.

Until now, Lotto NZ and TAB NZ have been the only domestic operators permitted to offer online products, despite offshore casinos marketing to New Zealand residents.

The Online Casino Gambling Bill complements earlier reforms that extended TAB NZ’s online monopoly on sports and racing betting and increased enforcement against offshore bookmakers. Together, these measures aim to reshape New Zealand’s digital gambling landscape, directing sports betting through TAB and casino gaming through licensed operators.

First approvals under the new licensing system are scheduled for late 2026.

Source: Mirage News