New Zealand iGaming: 4% GGR for Community Funding
- New Zealand government mandates 4% of gross gaming revenue (GGR) from iGaming operators for community funding.
- The Online Casino Gambling Bill aims to regulate online casinos and address concerns about community returns from land-based venues.
- The regulated online casino market is projected to bring in NZ$500 million annually from 2026, contributing to a US$2.89 billion gambling market by 2025.
Shockingly, almost 4,000 submissions raised concerns over community returns. New Zealand moves to implement a community funding guarantee for future igaming operators. The New Zealand government has agreed to include this provision within the country’s new Online Casino Gambling Bill, addressing concerns that the launch of legal online casinos could negatively impact community returns from land-based gambling. This article delves into the implications of this decision, the potential delays in the igaming launch, and the broader impact on the New Zealand gambling market.
New Zealand Government’s Community Funding Rule for iGaming Operators
The new zealand government has agreed to ringfence an amount equivalent to 4% of gambling operators’ gross gaming revenue (GGR) to fund community returns. This decision came amid concerns that legal igaming could draw players away from traditional land-based gambling options, such as pokies, leading to a decline in community returns. The matter was a key focus of the recent Governance and Administration Committee report on the bill. It had its initial reading in Parliament in July.
Potential Delay in iGaming Launch and Online Gambling Bill
Notably, the ringfenced community funding amount will be charged from 1 January 2027, indicating the launch of legal online gambling in New Zealand could be delayed by a few months from the initial July 2026 go-live date. Some legal experts have already called this launch date into question. Jamie Nettleton and Samuel Gauci, both of Addisons, told iGB in July that the targeted go-live date was tight, especially due to the length of the now-completed consultation.
Key Data Comparison
| Metric | Current (Land-Based) | Projected (Online) |
|---|---|---|
| Market Size (2025) | Approx. NZ$1 Billion | US$2.89 Billion |
| Community Returns | Varies | 4% GGR |
| Regulatory Status | Regulated | Aimed at regulating online, 15 licenses |
Minister Brooke van Velden’s Commitment to Community Returns and igaming regulation
Minister Brooke van Velden publicly acknowledged the issue in a statement dated 4 December. She said the bill would include a guarantee of channelling some igaming revenue back into New Zealand communities. Van Velden stated that submissions clearly showed New Zealanders want community returns from online gambling activity to ensure communities continue to get the funding they need. Cabinet agreed to provide these returns and the committee supported that decision.
Impact of Legal iGaming on Gambling Harm and Responsible Gaming in new zealand
Other issues raised from the consultation included the impact of legal igaming on gambling harm in New Zealand. Some put forward concerns that “normalising” gambling could lead to greater harm, while others flagged the potential for increased harm from higher levels of gambling advertising. In response, van Velden said the bill would include measures to reduce gambling harm. She said this would be its primary goal “first and foremost” and improve on the current black market situation, whereby no safeguards are available with unlicensed websites.
Key Points of the Online Casino Gambling Bill and licensing system
Should the bill pass, up to 15 online casino licences will be granted in the regulated igaming market through an auction process. Other key points include gambling operators having to pay a goods and services tax and an offshore gambling duty of 12%, as well as a mandatory levy of 1.24% of profits to fund services for gambling prevention. Licensees would be allowed to advertise gambling activities with limitations, such as a ban on gambling aimed at children. A suitable age verification tool will be required. The Department of Internal Affairs (DIA) manages the Gambling Act 2003. Tab NZ and Lotto NZ are also affected.
Online Casino Operators: Current vs. Projected Revenue
This section provides a comparison of current revenue streams from land-based gambling and projected revenues from the regulated online casino market. It highlights the potential for growth and the impact on community returns. The Gambling Act 2003 is being updated to reflect the new landscape. New Zealand’s regulatory framework aims at regulating online gambling.
Governance and Administration Committee Recommendations and Regulatory Framework
The Governance and Administration Committee played a crucial role in shaping the Online Casino Gambling Bill. Their recommendations included the Lottery Grants Board being responsible for distributing community returns. This decision ensures that funds are allocated effectively to support sports clubs, community groups, and grassroots activities. The committee’s involvement underscores the importance of a robust regulatory framework for regulating online gambling. The aim is harm minimization.
Enforcement and Penalties for Breach of New Zealand Law
The Online Casino Gambling Bill includes stringent enforcement measures and penalties for non-compliance. Online operators face fines up to NZ$5 million for breaches of the new regulations. This is aimed at deterring unlicensed gambling and ensuring that all licensed operators adhere to responsible gaming practices. The Department of Internal Affairs (DIA) will be responsible for monitoring and enforcing these regulations. Offshore platforms that remain unregulated will face cease-and-desist orders.
New Zealand Moves to Regulate Online Casinos: Impact on igaming business
The introduction of the Online Casino Gambling Bill represents a significant shift in New Zealand’s approach to online gambling. By regulating online casinos, the New Zealand government aims to create a safer and more controlled gaming environment for New Zealand players. This move is expected to generate substantial tax revenue, which will be used to fund community initiatives and address gambling-related harm. Operators must now prepare business plans to comply with the new regulatory framework. The aim is harm-minimisation.
The Future of iGaming in New Zealand
The future of igaming in New Zealand hinges on the successful implementation of the Online Casino Gambling Bill. The two-year review will be critical in assessing the impact of the new regulations on community returns and gambling harm. The government’s ability to balance innovation with responsible gaming will determine the long-term success of the regulated online casino market. SkyCity and other gambling operators in New Zealand must adapt to this new era. Online gaming industry and related sectors like data.bet are set to evolve.
Deep Dive: Market Analysis
The New Zealand igaming market is poised for significant growth, with projections estimating a US$2.89 billion market by 2025. The introduction of a regulated online casino market is expected to generate NZ$500 million annually from 2026. This growth is driven by increasing internet penetration, mobile gaming adoption, and a shift in consumer preferences towards online platforms. The 4% GGR requirement aims to balance economic benefits with social responsibility, ensuring that community groups continue to receive adequate funding. The impact of the online casino market on Class 4 pokies will be monitored closely through a two-year review.
Frequently Asked Questions
What is the Online Casino Gambling Bill?
The Online Casino Gambling Bill is new legislation in New Zealand aimed at regulating online casinos, introducing licensing requirements, and ensuring consumer protection.
How much will be allocated for community funding?
4% of the gross gaming revenue (GGR) from licensed online casinos will be allocated for community funding.
When will the new regulations take effect?
The new regulations are expected to take effect from 1 January 2027, with a potential delay from the initial July 2026 go-live date.
Conclusion
The New Zealand Online Casino Gambling Bill marks a pivotal moment for the country’s igaming industry. The 4% GGR community funding requirement reflects a commitment to balancing economic growth with social responsibility. While potential delays and regulatory challenges remain, the long-term outlook for the regulated online casino market is positive, with significant opportunities for licensed online operators. The success of this initiative will depend on effective implementation, ongoing monitoring, and a willingness to adapt to the evolving needs of the market. A two-year review will be conducted.
