New Zealand online casino policy could direct up to NZ$20m a year to community funding

New Zealand's government is moving ahead with a community funding mechanism tied to its Online Casino Gambling Bill, which officials estimate could deliver up to NZ$20 million (US$11.2 million) a year to local organisations. Under the policy, a portion of offshore gambling duty would be ring-fenced for grassroots groups through the Lottery Grants Board. The policy was published for viewing last week.

The guarantee was first considered in December last year and will be calculated as the equivalent of 4% of operator gross gaming revenue. It is intended to complement existing funding from Lotto, Class 4 gambling and TAB proceeds, creating a new stream for communities. It is due to start on 1 January 2027. Government officials expect annual contributions of between NZ$10 million and NZ$20 million, depending largely on market uptake and how far wagering shifts to licensed online operators.

The consultation drew 4,837 submissions, of which 3,966 raised concerns about community returns. Respondents worried about the effect of online gambling on revenue from traditional channels such as electronic gaming machines, which remain a key source of local funding. Government papers described the evidence on that impact as mixed, and officials committed to reassess the arrangements two years after implementation, seeking views from licensed and prospective operators as well as community groups.

The official report was cautious about the benefits. It said the value of grants to community groups cannot easily be monetised, and that the proposal brings direct costs to operators, administrative costs for government, unquantifiable opportunity costs, risk to Lotto NZ and a low risk of increased gambling harm. It concluded that there is a risk the costs may outweigh the community benefits.

The licensed market is still some way from full operation. The legislation received royal assent in May, but the launch has slipped by more than a year from an initial June target. Up to 15 online licences are being tendered, with applications being assessed after an auction in September. The final stage is expected this month, and operators that fail to secure a licence must stop operating from 1 December.

The regime is tightly controlled, with affiliate and influencer advertising banned alongside many forms of promotion. Operators will face gambling duty rising from 12% to 16%, plus 15% GST, a 1.24% problem gambling levy and a 3.5% licensing fee.