Emerging iGaming Vertical in New Zealand: Projections and Expectations

Given the industry’s impressive upturn, launching a digital segment appears to be a strategic decision. Consequently, the local government is planning to introduce an online casino licensing framework in 2026, offering promising opportunities for international investors.

Average Local Player: Key Characteristics

The number of punters is predicted to hit 2.2 million by 2029. The citizen penetration rate in the sector is forecasted to reach 39.2% by this year's end.

A typical player from New Zealand can be described as follows:

• age group — between 18 and 35 years old;
• gender — male (men gamble twice as often as females);
• earnings — (above) average (a median monthly income of $3,020);
• motivation — desire to win or simply to have fun, depending on the type of amusement.

The report from the state’s Gaming Machine Association indicates that nearly 70% of adults participate in niche activities at least once a year. While lotteries are the most favoured, sports betting, wagers on racing, and pokies also hold significant popularity.

Let us examine the main traits and preferences of New Zealanders:

1. Network access. More than 96% of the population has a steady Internet connection. The primary mobile service providers are Spark, Vodafone, and 2degrees, offering 4G and 5G coverage.
2. Payment methods. Residents are increasingly choosing digital wallets, credit cards, and cryptocurrencies for niche transactions.
3. Traffic sources. Approximately 70% of users access gambling portals via smartphones or tablets. Among popular platforms are Google, YouTube, Facebook, Reddit, X (formerly Twitter), and Instagram.
4. Sought-after gaming options. Slot machines constitute the most prevalent form of RMG content. Additionally, bookmakers, lotteries, and poker are highly popular. The most favoured wagering disciplines include football, tennis, and horse racing.

Current Regulatory Model and Content Classification

In 2003, the country’s government passed the Gambling Act, which categorised all forms of entertainment depending on scale and reward size.

The breakdown is the following:

• Class 1 encompasses small, uncertified games with payouts of up to $500 per session (for example, charity raffles fall into this category).
• Class 2 comprises content with prizes or potential turnover not exceeding $5,000 and $25,000, respectively, and does not require a licence if certain conditions are met.
• Class 3 covers larger charity events that demand an official permit, with winnings limited to $5,000.
• Class 4 consists of slot machines located outside of casino venues and is subject to the most stringent regulation.

iGaming was just emerging in the state when the law was enacted, so the supervision of this vertical was not included in the framework. Consequently, online gambling remains illicit domestically. However, there is no explicit prohibition on offshore operators, leading to regulatory gaps in the sector.

These legal loopholes have fueled the rapid expansion of the shadow market, causing an estimated annual loss of $140 million in tax revenue for the local budget. In 2023, digital portals made up 40% of the sphere’s total profits.

Sector’s Major Brands

To date, only brick-and-mortar facilities, state online lotteries, horse racing, and classic sportsbooks are officially permitted to provide services in New Zealand.

The local industry’s participants can be divided into 3 main categories:

Monopolies

Brands holding exclusive rights account for the majority of the total market profit, approximately $600 million.

The 2 leading companies are:

• Tab NZ, a certified sports and horse racing betting operator, boasts a strategic technology and product partnership with Entain. As of summer 2025, it is the only legal bookmaker within the country, following the adoption of a law that prohibits offshore wagering firms.
• Lotto NZ, a state raffle enterprise, has been operating since 1987 under the management of the local Lotteries Commission. Its activities are strictly regulated by the government, and all revenues are directed to the Lottery Grants Board. Among the company's main products are Powerball, Strike!, and Lotto.

Local Brands

SkyCity Entertainment Group is a leading name in New Zealand's land-based gambling sector.

The studio operates venues in the following cities:

• Hamilton;
• Auckland;
• Queenstown.

The company has also expanded its reach and debuted in the local iGaming vertical, with its digital platform holding a Maltese gambling permit.

There are other niche establishments in the state, but of a smaller scope. The land-based segment contributes approximately 45% to the overall industry profit.

Offshore Portals

There are 2 categories of shadow iGaming companies:

1. Illicit websites. Operate outside of local regulations and do not bring any commissions to the state’s budget.
2. Taxpayers. Usually, these are online casinos that follow established rules properly and hold reputable licences, such as Maltese or British ones. Such brands cover VAT and the gambling levy.

Starting July 1st, 2024, New Zealand's government imposed an extra offshore fee of 12%, in addition to the existing 13% VAT tax. The overall fiscal burden upsurged to 25%, ranging from $24 million to $51 million annually for each enterprise.

Establishment of an Online Licensing Framework

In response to the expansion of the grey segment, the country’s authorities intend to introduce a licensing programme in 2026 and grant 15 certificates through a competitive tender.

The new regulation is anticipated to enhance oversight by implementing global standards, including:

• obligatory KYC checks;
• age restrictions on advertising;
• penalties of up to $3 million for non-compliance.

The primary objective of the reform is to steer gamblers towards licensed websites, improve customer protection, and boost tax revenues. Furthermore, in 2026, new regulatory authorities will be created to ensure even more rigorous oversight.

The initiative aims to foster healthy competition, attract considerable investments, and draw in major operators to the market. These goals are already showing signs of success, as some international companies have demonstrated clear interest in entering the legalised digital sphere.

The following brands have already revealed their plans to secure a local licence:

• SkyCity;
• 888 Casino;
• Super Group;
• Bet365, and others.

Current expenses on the shadow market are approaching $900 million. After implementing the system, a 25% fee on these operations is expected, which could generate between $125 million and $225 million in revenue for the country's treasury.

Anticipated Transformations and Market Expansion

Upon the programme's launch, the 2 monopolies within the state will retain exclusive rights on sports betting, stakes on horse racing, and lotteries. The local authorities have already announced that foreign operators will be barred from providing services in these verticals.

Presently, offshore brands that fulfil tax obligations bring nearly $345 million in profit. Gamblers already spend approximately 89% of their money within the country. This competitive advantage enables Tab NZ and Lotto NZ to sustain their dominant positions in their niches. Nonetheless, the issuance of new licenses is likely to result in a redistribution of market share.

International operators can expand their presence through:

• financial investments;
• global popularity of their brands;
• experience of working in a highly regulated environment.

Meanwhile, domestic enterprises can sustain a competitive edge thanks to recognition among locals, gained client trust, and a comprehensive understanding of regional preferences.

The Main Things About New Zealand’s iGaming Vertical

New Zealand is actively adopting the strategies and legal models of leading gambling jurisdictions across Europe and North America, striving to introduce lawful online entertainment to its citizens. By implementing an online licensing programme, the country advances its regulated sector, benefiting businesses and the government while also safeguarding the welfare of customers.

Here are the main takeaways from the article:

• The domestic gambling sector’s GGR is projected to hit $3.11 billion in 2025 and grow at a CAGR of 3.21% till 2029, reaching $3.53 billion.
• A typical player from New Zealand is a man aged between 18 and 35 with an above-average salary, seeking either winning opportunities or amusement (depending on the type of content).
• In 2003, the country’s government passed the Gambling Act, segmenting all forms of entertainment products into 4 groups. At that time, iGaming was in its early development stages, so it was not included in this classification.
• Industry participants can be divided into 3 main categories: monopolies, local operators, and offshore companies.
• The new regulation is anticipated to improve oversight by adopting global standards, including obligatory KYC checks and age restrictions on advertising, among others.

With the forthcoming modifications, New Zealand is well-positioned to establish itself as a leading amusement centre.

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