Offshore Gambling Companies Set to Dominate New Zealand’s Online Casino Market

The New Zealand government is preparing to auction 15 online casino licenses, a move that is expected to see offshore gambling operators dominate the country's digital betting landscape. This shift marks a significant development in New Zealand’s gambling industry, which has until now largely restricted online casino operations within its borders.

Offshore Operators Expected to Lead the Market

According to Internal Affairs Minister Brooke van Velden, the majority of these licenses are likely to be secured by foreign companies. "We don't have a huge online gambling market, so I would expect that it's mainly offshore providers," van Velden told RNZ. While the licenses will be issued for a three-year period starting in February 2026, there is room for adjustments if needed. Operators found to be non-compliant could have their licenses revoked by the Department of Internal Affairs (DIA).

Concerns Over Market Impact and Community Funding

The introduction of an open online gambling market has raised concerns among domestic gambling operators, including Sky City Casino and the TAB. Both entities have opposed the government’s decision to allow as many as 15 operators to enter the market.

Sky City has argued that licenses should be restricted to businesses with a domestic presence. "The safest way to ensure online casino profits are subject to New Zealand income tax is to only allow incorporated New Zealand companies to hold licenses," the casino stated in a letter to Minister van Velden.

Similarly, the TAB warned that an open market would threaten the viability of domestic gambling organizations, potentially diverting revenue from local racing and sports funding to foreign companies. "This model risks our ability to appropriately fund racing and sport, while driving gambling profits offshore and delivering worse harm outcomes for Kiwi consumers," said TAB CEO Nick Roberts.

No Community Grants Requirement for Online Operators

Unlike traditional forms of gambling in New Zealand, such as Lotto, the TAB, and land-based casinos, the new online casino license holders will not be required to allocate a portion of their revenue to community grants. This has sparked criticism from organizations that rely on gambling profits to fund local initiatives.

Martin Cheer, managing director of Pub Charity Ltd, pointed out the disparity: "Effectively, in Class 4 gambling, 100% of profits have to be given away. In this instance, none of it has to be given away. Instead of funding local ambulance services or sports teams, profits will go to offshore shareholders."

However, a Cabinet paper from November 2024 indicated that imposing community grant requirements on online casino operators might deter them from bidding for a license. The government noted that increasing financial burdens on operators could lead them to exit the market, reducing competition and tax revenue.

Regulatory Framework and Economic Implications

New Zealand is one of the last developed nations to introduce regulation for online gambling. Under the new law, unlicensed operators targeting New Zealand customers will face fines of up to $5 million. Licensed operators, on the other hand, will be required to pay Goods and Services Tax (GST), a 12% gambling duty, and a problem gambling levy.

While the National Party had projected significant revenue from online casino operators, van Velden noted that the initial financial gains for the government are expected to be modest, with around $13 million in extra revenue anticipated annually in the early years. "For me, it's less about how we gather tax and more about how we get the balance right between allowing legal gambling and protecting people from harm," she stated.

Future of Online Gambling in New Zealand

Despite the concerns raised by domestic operators, the government is committed to ensuring a fair and regulated market. Van Velden emphasized that prioritizing local operators over offshore companies could violate New Zealand’s free trade agreements. "I think it's fair to allow anybody to bid for one of the licenses rather than giving preference to those who have been established in New Zealand," she said.

As the regulatory framework takes shape, the debate over how online gambling should be structured in New Zealand is far from over. While the government aims to create a safer gambling environment, questions remain about the long-term impact on local businesses, community funding, and the overall economy.

With the first licenses set to be issued in 2026, stakeholders across the gambling industry will be closely watching how these changes unfold and what they mean for the future of New Zealand’s online gambling market.