New Zealand's Gambling Industry: The Nuances of Entering a Regulated Market in 2026

As of January 1, 2026, the Wild West era of online casinos in New Zealand has officially come to an end. The local government, with the active support of the Department of Internal Affairs (DIA) and public organisations, developed a legal model that made operating in the grey market economically unviable.

Operators were given a choice: to accept the new rules and compete for one of 15 exclusive licenses, or leave the market and face the risk of large fines and bans.

About the Jurisdiction and Its Gamblers

The country is located in the southwestern part of the Pacific Ocean and comprises several islands. The territory is administratively divided into 17 regions, of which:

• 9 are located in the North Island;
• 7 are in the South Island;
• 1 is in the Chatham Islands.

The total population of New Zealand slightly exceeds 5 million. The size of the target market may not seem impressive, but the purchasing power of local residents remains among the highest and most stable in Oceania.

According to the Numbeo analytics agency, the average monthly salary in the region is approximately $3,020. The total number of active players is expected to reach 2.2 million by the end of 2029.

The approximate amount of lost bets among New Zealand gamblers is $1,107 per year. These statistics do not include data from uncertified operators, so the final figures may be 10–20% higher.

More than 95% of the locals have stable Internet access. Online casino owners note that 70% of aggregated traffic comes from mobile channels.

The average user profile in the country looks like this:

• Age: 18–35 years.
• Gender: male (the rate of active and regular games is twice that of women).
• Income: average or above average.
• Motivation: entertainment or the desire to win big.
• Preferences: slots (the most popular niche), sports betting (football, tennis, horse racing), as well as lotteries and poker.

According to publicly available analytical reports, as of the end of 2025, the cost of acquiring one paying customer (CPA) varies from $260 to $345. This is a significant amount, and to compensate for it, operators should focus on better retention strategies.

Formation of the Gaming Market

The sector began to be regulated in 2003. At that time, the government categorised all forms of entertainment based on turnover and the size of a prize pool.

This resulted in the creation of 4 classes: from formats with minimum payouts of up to $500 per session to separate betting zones outside of casino complexes.

At the time the law was passed, the online segment was at an early development stage, so the law did not provide for its regulation.

As a result, a unique situation arose in the country: digital gambling formally remained outside the legal framework, but was not directly covered by the ban on offshore services. This legal uncertainty led to the rapid growth of the shadow niche and annual budget losses of approximately $140 million in tax revenue.

According to the iGaming Today news agency, in 2023 alone, New Zealanders will spend $1.1 billion on online betting. Virtual casino platforms accounted for approximately 40% of the industry's total income.

Starting in 2026, new amendments will come into force that can fundamentally change the configuration of the domestic market.

The document stipulates a redistribution of entertainment niches and the formation of 3 new segments:

• a land-based sector, including offline locations in Auckland, Christchurch, and other major cities;
• Lotto NZ and TAB NZ state monopolies that cover lotteries, sports betting, and horse racing;
• a licensed online niche with clearly defined requirements for commercial providers.

What the New Legal Landscape Will Look Like

The Department of the Interior Affairs has chosen a “controlled offers” strategy. Instead of an open market, as in Malta or Curacao, a model with a limited number of licences has been implemented. It is similar to the practice in Hungary and Switzerland.

The regulators are planning to issue a total of 15 permits, which will create an unprecedented level of competition. It is expected that publicly-owned providers and the world’s leading brands, such as Flutter, Bet365, and DraftKings, will account for 65% of the market.

The remaining licensees will have a share of no more than 35%.

To prevent monopolisation, there is a “3 certificates per company” rule. This is a way to restrict ownership: no single beneficiary or group of enterprises can simultaneously hold more than 3 permits.

They will be valid for 36 months. For the iGaming sector, this is a critically short period, which encourages operators to work as efficiently as possible from day one. It will be possible to extend a licence for 5 more years only in case of impeccable compliance with all established rules.

The restrictions apply not only to the number of certificates but also to the deadlines for preparing business projects and submitting documents.

The distribution of permits will be held in the form of a four-stage auction:

1. March–April 2026 — EOI (Expressions of Interest) will start to be accepted. Without filing this application and paying a non-refundable fee, entrepreneurs cannot participate in the event. The minimum deposit is $143,750.
2. June 2026 — submission of final price offers for the certificate.
3. August–November 2026 — determination of winners and submission of the Full License Application. At this stage, a detailed review of entertainment software, security systems, and financial security of platforms is conducted.
4. December 1, 2026 — the deadline for issuance of permits. Online casino owners that meet all requirements but have not received their documents by this date will be able to operate in a transitional regime until June 2027.

The winners of the tender will be given an additional 90 days to integrate their gambling services with state monitoring systems.

Financial Aspects: Taxes and Fees for Entrepreneurs

The fiscal burden in 2026 is designed to maximise the refund to the national economy. It is worth noting that players already spend approximately 89% of their casino prizes within the country, as evidenced by the reports from offshore operators.

The general tax rate for the iGaming business will be 16% of gross revenue (GGR).

It will be distributed as follows:

• 12% to the state treasury;
• 4% to a trust fund for supporting amateur sports and local communities.

Additional Levies and Fees

Apart from the fixed 16% of GGR, online casino owners will be required to contribute:

• a quarterly Problem Gambling Levy (PGL) of 1.24% of gross revenue;
• a 15% goods and services tax (GST) of the turnover from all transactions — a standard practice prescribed in the national law. Reporting at this rate is overseen by local fiscal agents.

According to industry experts, 16% is a golden mean. For comparison, in some US states, such as New York, deductions can reach 51%, while the UK has a fixed size of 21%.

A 16% tax will allow New Zealand operators to maintain profit margins while achieving a high ARPU indicator of $1,107 per year.

The legal norms also establish a fine for working without a licence, more than $2 million.

Social Responsibility: Mandatory Security Tools

The local regulator has implemented a smart real-time monitoring system. Entrepreneurs are required to integrate specialised API algorithms that will collect and transmit anonymised information on the user behaviour to the DIA.

Online casinos must also integrate:

1. Self-exclusion options with automatic signal sending to the unified state registry. If a player blocks his account on one website, he loses access to all legal providers in the country.
2. Reverse Withdrawals. When the Cash Out button is clicked, funds in the platform's account are frozen immediately.
3. AI profiling services. These are trainable models that detect atypical activity and motivate clients to take a forced break from the session.

One of the New Zealand government's major innovations is a ban on demo games for unverified users. Even free rounds are only permitted after age verification (18+), as trial versions of slots can make teenagers think that it is easy to win.

Technology Stack: Next-Generation KYC and AML

Updated Identity Verification Codes of Practice will come into force on May 1, 2026. This means that a standard passport check will no longer be sufficient.

Operators are required to implement:

1. Biometric identification services for facial recognition with protection against Deepfakes. It is only possible to place a bet after a live verification via a smartphone camera.
2. Protocols for blocking credit card transactions. Such deposits are officially prohibited from December 2025. Only debit cards, bank transfers (POLi, Akahu), and reliable fintech products can be used to make a bid.
3. Automated AML checks. Any suspicious operation over $2,300 or a series of frequent, small transactions must be recorded in the SAR (Suspicious Activity Report) format and reported to the DIA within 24 hours.

Media Promotion Regulation: Control of Advertising Activity

The authorities have introduced several new rules that significantly limit marketing opportunities of entertainment platforms of all formats.

The measures taken include:

1. Fixed transmission on TV and radio. Direct advertising is permitted only from 9:30 p.m to 6:00 a.m. This minimises interaction with the underage audience, but significantly increases the cost of airtime.
2. Limited “5x30” format. No more than 5 casino and bookmaker commercials that last 30 seconds are allowed per day on TV, radio, and streaming platforms, including local services.
3. Total ban on sponsorship. Providers of gambling solutions cannot place logos on athletes' uniforms or support teams, individual participants, or stadiums.
4. Compliance with GEO regulations. Banners with direct advertising of casino brands are permitted only within 300 meters of schools, sports grounds, and public parks.
5. Ban on cooperation with influencers. The DIA conducted a series of demonstrative raids and imposed fines totalling over $75,000 on iGaming advertising with the participation of local celebrities.

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Economic Returns of the New Digital Segment

The legalisation of online casinos is an important social security mechanism for the local government and simultaneously generates substantial budget revenues.

In the explanatory note to the draft, the Department of Internal Affairs presented the following financial expectations:

• $1.3 billion — projected online betting turnover by the end of 2026;
• more than $250 million — net annual return of the owners of casino sites;
• $500 million — potential revenue growth per 12 months once the market is fully developed;
• $7–17 million per year — estimated volume of the levy on profit for 2026–2027;
• $75 million — expected treasury revenues by 2030, according to the Ministry of Finance.

The Main Things about the New Zealand Gambling Industry

The country is making a historic transition from a shadowy, unregulated market to an elitist licensing model focused on protecting public interests and ensuring legal transparency.

Despite its small population, New Zealand ranks among the top regions by ARPU and is of significant interest to investors. The jurisdiction has every potential to become the most competitive gaming sector in Oceania.

Key aspects that should be considered when preparing for a project launch in the region:

• Artificial shortage of licences. The documents will be distributed among applicants based on the results of an auction. The application submission window is March–April 2026.
• High social burden. Self-exclusion tools, centralised state monitoring, and strict verification of the customers’ age are mandatory for casino platforms. Fines for illegal activities reach $2 million.
• Attractive financial conditions. The New Zealand market attracts investors with its stable and open tax policy. The niche has 3 basic fees: 16% annual GGR, 1.24% of income goes to the fund to fight ludomania, and 15% of all monetary transactions.

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