How online gambling regulations are going to change in New Zealand

Online gambling is very popular among New Zealanders. Citizens spend up to $700 million annually, gambling on online casino platforms. The majority of these operators are offshore providers. This means they operate without oversight or control from the New Zealand government.

The industry will go through a major reshuffle in the coming months, as the country is now introducing new laws to guide operators and their activity. These changes are expected to come into full effect by December 2026. In this article, we will explore how the new online gambling regulations will reshape the New Zealand gambling landscape.

Current NZ regulations

Despite being a thriving million-dollar industry, the New Zealand casino market has always operated within a legal gray area. In fact, the 2003 Gambling Act makes it illegal to operate an online casino. The law prohibits “remote interactive gambling”. This has been interpreted as casino betting done via phones and computers.

The only forms of gambling permitted by law are through the New Zealand Lotto. Licensed class 3 lotteries, such as charity raffles, can also be used to raise funds. These are run organizations like the Heart Foundation and Coastguard). Sports betting is also permitted, but only through TAB New Zealand. No other organization is permitted to offer online racing and sports betting to New Zealanders. This prohibition applies to all races and sports betting events, including those that take place outside New Zealand.

Despite these restrictions, thousands of offshore providers operate gambling platforms anyway. That’s because the current legal structure does not prohibit Kiwis from gambling on sites based overseas. But offshore operators are blocked from promoting or advertising their sites. Defaulters must pay a fine of $10,000.

New regulations 

The government is set to introduce a new law that will change the gambling landscape. The new regulation will grant licenses to a few operators and impose new operational requirements.

Interested operators will be able to get a New Zealand license after following a three-stage process. The licensing process will begin with a general expression of interest. This will be followed by an auction for qualified operators invited by the regulator. Finally, successful operators in the bid will be eligible to apply for a full license.

New Zealand will begin issuing these new licenses between August and December 2026. There are only 15 license slots available to operators. These slots will be allocated through an auction. Each license is for a single platform or website. This means a single operator can obtain a license for multiple gambling platforms. The maximum number of platform licenses that a single operator can hold is three.

The newly issued licenses will be valid for three years. After this initial period, the operator can opt to extend the license by another five years. The licenses only permit operators to provide online casino games like slots and table games. They can also offer bets on virtual sports or computer-simulated racing betting. However, bets on actual races and events involving sports betting are not allowed. Only the TAB has been permitted to provide this service.

What will happen after the new law is introduced

New Zealand’s new online gambling law will impact everyone in the industry. For businesses, it presents a rare opportunity to do business legally in this newly regulated market. Players also get to enjoy better protection under the new system. Some of the changes that are expected to happen in the industry as a result of this new law include:

Limited licenses will promote competition 

The decision of the New Zealand government to cap the number of licenses at fifteen is strategic. Primarily, the limited slots will raise revenue for the government. Many operators will be competing for limited slots in the initial auction phase. But beyond the financial incentive, capping the number of licenses is also good for the industry. It gives consumers a choice without overwhelming them with options. Competition motivates better services as operators compete to get the attention of players.

Compliance and enforcement 

New Zealand's Department of Internal Affairs (DIA) is the agency in charge of the country’s gambling industry. This agency will maintain a registry of all licensed operators. This will make it easier for players to easily verify licenses. The DIA will also ensure compliance and impose penalties on offenders.

The law empowers the regulator with a wide range of enforcement tools. They can give formal warnings, enforce undertakings, and issue take-down notices. Serious offences may also lead to pecuniary penalties as high as $5 million. Penalties may be applied to both the operator and its director or management staff.

Restrictions on advertising 

The new gambling law will affect how operators of gambling services advertise their operations. The law does not ban advertising, but operators must adhere to strict conditions. These conditions are meant to protect gamblers from unsafe practices. Some of these restrictions are listed below:

• Operators cannot compensate social media influencers, athletes, or celebrities for promoting the brand.
• Advertisements that target persons under 18 are prohibited. It is also illegal for operators to erect outdoor advertisements in public places within 300 meters of any place or area where underage children would normally congregate. Examples of such places include schools, skate parks, and sports fields.
• No advertisement should be shown between 6.00 am and 9.30 pm.
• A licensed online gambling company can only run five 30-second ads across all channels for any 24-hour period.
• Front-page prints in newspapers or transit advertising on buses and trains, are not allowed.
• Operators cannot offer practice games or demos to attract users.

Industry implications 

New Zealand already has a strong and thriving gambling industry. The entire industry will generate projected revenues of over $3 million in 2025. The online casino industry will contribute a significant portion of this.

With this new law, the online casino industry is expected to double its current size by 2030. This will position New Zealand as a leading regulatory jurisdiction alongside others like the United Kingdom and Malta. The changes are also likely to attract global operators.

Introducing stricter laws will allow the government to earn significant revenue from the industry. The auction alone will raise up to $200 million for the Government of New Zealand. Community returns could reach between $10 and $20 million in the first year. But this depends largely on how much revenue licensed operators generate.

What will happen to current brands?

Currently, New Zealanders gamble on hundreds of offshore gambling websites without legal restrictions. But all that is set to change when the new gambling law comes into effect. The new legislation will have an extra-territorial effect. This means it will apply to operators both within and outside New Zealand.

Once the new licensing regime is in place, New Zealanders will only be allowed to legally play on 15 regulated gambling platforms. Existing brands in the New Zealand gambling market have to apply for one of the available spots to continue their operation.

However, given the limited number of licenses, many operators may be forced to withdraw their services. Some operators may also choose to continue operating regardless of what the law says. This will create a thriving black market that may still get patronage from many Kiwis. It’s up to the DIA to implement measures to weed out unlicensed operators.

Conclusion 

The decision to regulate a largely unregulated industry is definitely a positive development. Online gambling is already popular in New Zealand. And regulating the market will only enhance consumer protection. It will also help the government earn more revenue. But the new law could also fuel a black market boom if not properly managed. The legislative framework must deter unlicensed offshore providers and make it less attractive for players to interact with them.