Foreign Firms to Dominate as Government Auctions Online Casino Licenses
New Zealand is preparing for a major shift in its gambling industry as the government moves to auction 15 online casino licenses to foreign companies starting February 2026. This landmark decision will regulate the online gambling sector for the first time, positioning New Zealand among the last developed nations to implement such oversight.
Internal Affairs Minister Brooke van Velden confirmed expectations that international gambling powerhouses will likely secure most licenses, creating ripples across the country’s established gambling ecosystem.
“We don’t have a huge online gambling market, so I would expect that it’s mainly offshore providers,” van Velden told reporters. She emphasized that the licenses, valid for three years, are not permanent arrangements: “If someone is a bad operator, DIA can always revoke their license.”
Community Funding Crisis Looms as Profits Head Offshore
Unlike traditional gambling operators such as Lotto, TAB, and local pokies venues—which must distribute profits to community initiatives—the new online license holders will face no such obligations. This stark contrast has ignited fierce criticism from domestic gambling stakeholders.
Martin Cheer, managing director of Pub Charity Ltd, which operates approximately 1,700 pokie machines generating $125 million in revenue, expressed profound disappointment with the arrangement.
“Effectively, in Class 4, 100 percent of all profits have to be given away. Well, in this instance, none of it has to be given away,” Cheer stated bluntly. “So instead of the local ambulance service or coast guard or the local footy team getting some money, it’s going to offshore shareholders.”
He didn’t mince words about the economic impact: “You can’t get any more perverse than sending your money off to some Russian-Croatian shareholder: basically never seeing the light of day in New Zealand again. That’s what I call perverse.”
Domestic Operators Push Back Against “Open Market” Approach
Documents obtained through the Official Information Act reveal significant opposition from established local gambling entities. Sky City Casino advocated for restricting the market to just five licenses, limited to companies with domestic presence—a position Minister van Velden dismissed as self-serving.
“They are looking out for themselves, right? I’m not here to look out for Sky City,” van Velden countered. “I’m here to ensure that we have a fair marketplace and a fair, regulated market.”
Meanwhile, TAB CEO Nick Roberts warned Racing Minister Winston Peters that an open market with 10 or more licenses would threaten “established funding streams for racing and sport” and risk “driving gambling profits offshore and delivering worse harm outcomes for Kiwi consumers.”
Balancing Revenue and Regulation
While the National Party had campaigned on generating substantial revenue—projecting a gaming duty of 12 percent would bring in $179 million annually—van Velden significantly downplayed financial expectations, suggesting the new regime might only yield about $13 million extra per year initially.
She maintained that safety, not revenue, drives the regulatory change: “For me, that’s less about how we gather tax and more about how we get the balance right for allowing people to use a legal channel to gamble, while at the same time protecting people from the worst kinds of harm.”
The new legislation will impose fines of up to $5 million on unlicensed operators targeting New Zealand gamblers. License holders will be required to pay GST, a 12 percent gambling duty, and a problem gambling levy—but the absence of community contribution requirements continues to fuel debate about whether this regulatory approach truly serves New Zealand’s interests.
As the February 2026 implementation date approaches, the question remains whether this market liberalization will create a safer gambling environment or simply divert profits from local communities to international shareholders.
Government’s Online Gambling Regulation Plan
The New Zealand government has unveiled its plan to regulate the online gambling industry, sparking concerns among local casino operators. The proposed framework includes issuing 15 licenses for online casino operators, with these licenses to be auctioned to the highest bidders.
This move comes alongside the National Party’s campaign promise to impose a 12% gaming duty on gross betting revenue for offshore online casino operators. Closing this tax loophole is expected to generate $179 million annually over four years, totalling $719 million. However, with approximately double the number of operators currently active in New Zealand, the competition for licenses is expected to be fierce.
Local Casinos Fear Foreign Dominance
Local operators worry they could be outbid by offshore companies with substantial financial resources. These concerns stem from the belief that foreign operators, without ties to New Zealand, may lack the same commitment to community welfare and regulatory compliance.
Jason Walbridge, SkyCity’s chief executive, expressed support for a competitive market but stressed the importance of prioritising local businesses. “We’re a trusted brand in New Zealand. Kiwis know who we are,” Walbridge said in an interview with Nine to Noon. He urged the government to consider the economic and social benefits of licensing New Zealand-based operators.
“Offshore operators are massive companies with deep pockets. They can outbid local businesses easily,” Walbridge warned. He highlighted the need for the government to prioritise local operations to safeguard jobs and ensure compliance with host responsibility and anti-money laundering regulations.
Limiting Licenses: A Double-Edged Sword?
The government’s decision to cap licenses at 15 was met with mixed reactions. Walbridge noted that fewer operators would reduce aggressive marketing and excessive advertising. “No one wants to wake up to gambling ads on every device,” he said.
Brett Anderson, CEO of Christchurch Casino, echoed these concerns, arguing that the current plan overlooks the long-term benefits for New Zealand. While he acknowledged that local casinos are profit-driven, Anderson emphasised their deeper ties to the community. “Our employees live and work here. We have a social license to uphold and a door regulators can knock on,” he said.
Call for a New Approach
Both executives stressed that local operators are better positioned to minimise harm and maintain New Zealand’s social and regulatory standards. They called on the government to consider mechanisms beyond auctions to ensure licenses benefit the community, such as prioritising operators with local investments and commitments to responsible gambling.
As the online gambling landscape evolves, the government faces a critical decision: balance the allure of high auction bids against the long-term welfare of New Zealand’s economy and communities.
As of now, gambling activities in New Zealand generate nearly NZ$1 billion annually. However, the government’s projection for the regulated online casino sector is more conservative, expecting it to be worth around $500 million when it officially launches in 2026.
Government Initiatives and Regulation Plans
The New Zealand government has outlined a plan to regulate online casinos by 2026, a significant year as it coincides with a general election. This move involves issuing a limited number of licenses through an auction process. Jarrod True, a prominent local gambling attorney from True Legal, shared insights with iGB, highlighting that the government anticipates a taxable revenue from regulated online gambling to be about NZ$500 million (US$300.8 million).
Market Analysis and Industry Response
Despite government estimates, industry insiders believe the current expenditure in the grey market could be as high as $900 million. True noted the surge in online gambling popularity during the COVID-19 pandemic, a trend that continues robustly. Currently, Tab NZ, in partnership with Entain, stands as the sole online betting operator.
Legislative Process and Stakeholder Involvement
The regulation of online casinos is marked as a priority by the government, evident from the planned early legislative actions in 2026. The process will involve drafting legislation, followed by a public consultation in 2025, seeking insights particularly from international stakeholders to refine the regulatory framework.
Challenges in Licensing and Market Competition
The exact number of online licenses and their associated costs are yet to be determined, with details on the regulatory approach still sparse. Internal Affairs Minister Brooke van Velden mentioned that advertising for these platforms would be “strictly limited,” and casino products would not be combined with sports betting or lottery services. True speculated that land-based giants like SkyCity Entertainment Group might have influenced the decision to limit online licenses to secure a larger market share.
Controversial Policies and Public Reaction
One of the more unexpected moves by the government was the imposition of a ban on gambling sponsorships, a decision that True described as “very left-field.” This reflects individual cabinet members’ influence on the legislation. The limited license policy, which could potentially be revised or discarded during the legislative process due to public and stakeholder pushback, remains a contentious issue.
New Zealand is rolling the dice on a revolutionary approach to online casinos in a daring move that’s sent shockwaves through the gambling world. Brooke van Velden, the country’s Minister of Internal Affairs, has unveiled a groundbreaking framework that promises to transform the digital gambling scene by 2026. But is this a jackpot for the nation or a risky bet?
The House Always Wins? Not Anymore
Van Velden’s announcement has the industry buzzing. “We’re not just changing the rules,” she declared, her eyes gleaming with determination, “we’re rewriting the entire playbook.” The new system isn’t just about regulation; it’s a high-stakes game of control and responsibility.
Imagine a casino landscape where only the cream of the crop gets a seat at the table. That’s exactly what New Zealand is aiming for with its selective licensing process. It’s not just handing out permits; it’s auctioning golden tickets to a select few operators who can prove they’re not just after a quick buck.
Age Restrictions: No More Kid Gloves
The days of underage gambling are numbered. With an iron-clad age restriction of 18, New Zealand is sending a clear message: this isn’t child’s play. But here’s the kicker – sports betting and lotteries are off the table. It’s a calculated move that’s left some scratching their heads and others nodding in approval.
Advertising: A Double-Edged Sword
In a twist that’s raised eyebrows across the board, licensed operators will be allowed to advertise. It’s a gamble that could pay off big time or backfire spectacularly. But don’t expect to see casino logos plastered across sports jerseys anytime soon – sponsorships remain firmly in the ‘no’ column.
The People’s Voice: A Chance to Speak Up
Van Velden isn’t just laying down the law; she’s inviting Kiwis to the table. “This isn’t just about what we think,” she emphasized, “it’s about what New Zealand wants.” It’s a refreshing approach that’s turning heads and winning hearts.
Industry Heavyweights Weigh In
SkyCity Entertainment Group, a titan in the industry, isn’t just on board – they’re practically cheering from the sidelines. CEO Jason Walbridge couldn’t contain his enthusiasm: “This isn’t just good for us; it’s good for New Zealand. We’re talking about millions that could be funding schools, hospitals, and communities instead of lining offshore pockets.”
A New Dawn for Kiwi Gambling
As the sun sets on the old way of doing things, a new era is dawning for New Zealand’s gambling scene. It’s a high-stakes game with the potential to reshape not just the industry, but the very fabric of Kiwi society.
The clock is ticking, and the world is watching. Will New Zealand’s gamble pay off? Only time will tell. But one thing’s for sure – the game has changed, and there’s no going back.
Stay tuned for more details later this year. The Department of Internal Affairs is gearing up to take the reins, and you can bet they’re not playing around. This is more than just a policy change; it’s a revolution. And New Zealand? They’re all in.
