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.
