Every year, up to 800 million New Zealand dollars flow from New Zealand to offshore gambling sites, a figure nearly equivalent to a portion of its domestic legal gambling market. Facing an unstoppable "grey torrent" like legendary rugby star Lomu, the New Zealand government has chosen to confront it head-on—the "Online Casino Gambling Act" aimed at legalizing online casinos is advancing in Parliament. Simply put, if you can't stop it, why not build a better stadium and bring the players back. Waterhouse VC believes that if New Zealand can balance regulation and market vitality, its model could become a blueprint for the Asia-Pacific region. Interested in exploring the forefront of global gambling market regulation? PASA official website continuously tracks the intersection of policy and capital.
First, how severe is the offshore "leakage"? Data reveals the grey torrent
New Zealand's gambling dilemma lies in the huge gap between law and reality. Legally playable by local residents are TAB NZ's sports horse racing, Lotto NZ's lottery, five physical casinos, and about 14,500 slot machines, but online casinos have long been in a "playable, not operable" grey area.
Offshore operators take advantage of the void. Starting from July 2024, New Zealand will impose a 12% offshore gambling tax on operators serving its residents. In the 12 months ending June 2025, only 26 entities reported, generating a taxable GGR of 520.8 million New Zealand dollars, contributing tax revenue of 62.5 million New Zealand dollars. However, Waterhouse VC points out that this is just "the compliant small part," and the actual leakage could be as high as 800 million New Zealand dollars annually.
More problematic is that offshore platforms usually offer "one-stop services," where players can easily switch from slot machines to sports betting. This is also eroding TAB NZ's exclusive rights—although its 25-year partnership with Entain contributes about 200 million New Zealand dollars annually to the horse racing industry, about 180 million still flows overseas each year.
Second, International Mirror: It's better to guide than to block
This dilemma is not unique to New Zealand, the article lists three "solutions":
Hard block: Even in China, by 2024, more than 4500 illegal platforms were destroyed, but the "whack-a-mole" game never ends. The United Nations Office on Drugs and Crime estimates that the global illegal gambling annual betting amount is as high as 1.7 trillion US dollars.
Laissez-faire: Tax revenue and consumer protection continue to be lost.
Guidance: Establish an attractive legal market.
The lesson from Australia is clear: the ban on online casinos and live betting has led to an offshore market size of 3.9 billion Australian dollars in 2024, expected to soar to 5 billion by 2029. The domestic channelization rate dropped from 74% to 64%, and some people still flowed offshore even after registering with the national self-exclusion system BetStop.
Ontario, Canada, however, is a positive example: since opening its regulated market in 2022, 83.7% of online players choose to bet on legal platforms three years later, generating 2.04 billion Canadian dollars in tax revenue.
Third, New Zealand's plan: 15 licenses, community compensation, and channelization ambitions
New Zealand is taking the third path. The "Online Casino Gambling Act" will be introduced on June 30, 2025, expected to take effect on May 1, 2026, with core designs including:
Number of licenses: Up to 15, with a single operator limited to holding 3
Allocation phase: Expression of interest in July 2026, auction in September, application in October
Deadline: Operators must apply or exit the market by December 1, 2026
Extraterritorial enforcement: Fines up to 300,000 New Zealand dollars for individuals, up to 5 million New Zealand dollars for corporations, with the right to prosecute unlicensed overseas operators
To alleviate community organizations' concerns about slot machine revenue being eroded, the government will raise the offshore gambling tax from 12% to 16% starting January 2027, with the additional 4% specifically for community returns (currently slot machine operators return about 300 million New Zealand dollars annually to the community).
Consumer protection measures include identity verification, spending limits, self-exclusion, and prohibition of credit card deposits. Jarden predicts that if all 15 licenses are issued, annual total gambling revenue could reach 650 million New Zealand dollars, with net revenue of about 474.5 million after deducting a 27% tax burden.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
Original in-depth gambling channel: https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
