The New Zealand government is set to implement new regulations within the online casino industry, potentially generating up to NZ$20 million ($11.2 million) annually for community funding. This initiative is part of the Online Casino Gambling Bill, which has recently been made available for public viewing.
Under this legislation, a portion of offshore gambling duty will be allocated specifically for grassroots organizations through the Lottery Grants Board. The idea for community funding originated in December of last year as part of the bill's framework and is designed to complement existing revenue streams from Lotto, Class 4 gambling, and TAB proceeds. Funding will equate to 4% of the operators’ gross gaming revenue (GGR).
Expected to commence on January 1, 2027, officials project that the annual community funding contribution will fall between NZ$10 million (US$5.6 million) and NZ$20 million, depending primarily on how many players switch their wagering activities to licensed online operators.
The government has opened applications for up to 15 online licenses, with assessments currently underway following an auction held in September. The final decisions regarding license allocation are anticipated this month. Operators that do not obtain a license must halt their activities by December 1.
A review of the community funding grant will be conducted two years after its implementation to address concerns raised during the policy's consultation phase. Many respondents expressed worries about the potential impact of online gambling on the revenues generated by traditional gambling methods, like electronic gaming machines (pokies), which significantly support local funding.
Out of 4,837 submissions, 3,966 raised concerns over community returns, prompting the government to commit to reassessing the community funding guidelines based on the findings from this review. The evidence concerning online gambling's effect on traditional funding sources proved inconclusive, leading to uncertainty about the promised community advantages.
A report highlighted several risks and unquantifiable costs associated with the proposal, including direct expenses for operators and administrative costs for the government. It noted a potential risk that these costs might outweigh the benefits intended for the community.
Despite the royal assent of New Zealand's iGaming legislation in May, the fully operational licensed market is still set for a 2027 launch. The initial target for rollout was June of this year, but stakeholders indicated last July that legislative uncertainties would result in delays.
Access to the market will be strictly regulated, with stringent marketing rules that prohibit affiliate and influencer advertising, along with many other promotional activities. Compliance requirements are rigorous, with gambling duty increasing from 12% to 16%, in addition to a 15% GST, a 1.24% problem gambling levy, and a 3.5% licensing fee.
