A commentary published by iGaming Business and attributed to Waterhouse VC argues that New Zealand has become a test case for how governments respond to offshore online gambling. The piece is opinion and analysis, written from an investor's perspective, and its conclusions should be read in that light. The version supplied to us was cut off before its final section on Ontario, Canada.
What the New Zealand numbers show
New Zealand's legal market covers sports and racing through TAB NZ, lotteries through Lotto NZ, five land-based casinos and roughly 14,500 pokie machines in pubs and clubs. According to the commentary, it has been legal for New Zealanders to gamble on offshore sites for two decades, but illegal to operate one domestically or advertise in the country.
A 12% Offshore Gambling Duty has applied since July 2024 to offshore operators serving New Zealand residents, excluding sports and racing betting. In the 12 months to 30 June 2025, operators declared NZ$520.8 million of liable gross gambling revenue and paid NZ$62.5 million in duty. Only 26 entities were registered, and the top five accounted for 89.6% of liable revenue.
The author calculates this at roughly NZ$10 million a week in player losses and says it is almost certainly an undercount, because returns capture only the compliant part of the market. That is the author's inference, not a figure reported by authorities. The piece also cites estimates of up to NZ$800 million flowing offshore annually.
It also reports that in July 2025 the Department of Internal Affairs warned 10 students for promoting offshore sites for financial gain.
The proposed licensing regime
The Online Casino Gambling Bill was introduced on 30 June 2025, passed its first reading on 15 July and, according to the piece, is awaiting its second reading. The commentary says the Act is expected to commence on 1 May 2026. Under an indicative timeline, 15 licences, capped at three per operator, would be allocated in stages: expressions of interest in July 2026, an auction in September and applications from October. Operators would need to apply by 1 December 2026 or exit the market.
The regime would reach offshore operators, with fines of up to NZ$300,000 for individuals and NZ$5 million for corporates, plus take-down powers. Listed consumer protections include identity verification, spending limits, self-exclusion, a credit card deposit ban, advertising restrictions and bonus controls.
"My hope is that Kiwis will gamble in a safer regulated market than we currently have, with harm minimisation standards and we will have consumer protection standards" – Brooke van Velden, Internal Affairs Minister
The piece says community organisations opposed the plan over fears it would cannibalise pokie revenue, which must return at least 40% of gross profits to community purposes. In response, the government is lifting the offshore duty from 12% to 16% from January 2027, with the extra 4% ring-fenced for community returns.
The Australian comparison
The commentary contrasts New Zealand with Australia, where online casino and live in-play betting are banned. Citing Responsible Wagering Australia, it says the illegal offshore market reached A$3.9 billion in 2024 and is tracking toward A$5 billion by 2029. It adds that offshore operators account for 36% of all online gambling, that onshore channelisation has fallen from 74% to 64% in three years, and that half of those gambling offshore have done so while registered on BetStop, the national self-exclusion register. We have not independently verified these figures.
The author argues that enforcement alone struggles, pointing to rotating domains, rerouted payments and the use of VPNs, and says China's Ministry of Public Security reported dismantling more than 4,500 illegal platforms in 2024. The author's preferred answer is a regulated market "compelling enough" that customers choose it. That is a policy argument, not a settled finding, and Australian law currently takes a different approach.
The piece also notes Jarden's forecast of NZ$650 million in annual gross betting revenue if all 15 licences are issued, a figure that predates the extra 4% levy.