New Zealand is not inventing online gambling: it is recognizing that it already exists. That was the central premise that Paul James, Secretary for Internal Affairs and Chief Executive of the Department of Internal Affairs (Te Tari Taiwhenua), set out during a keynote speech at the Regulating the Game conference, held in Sydney.
James presented the Online Casino Games Bill as a pragmatic response to a reality that current legislation has been unable to contain. According to the most recent estimates, New Zealanders wagered around $935 million dollars in online casinos during 2025, 10% more than the previous year, the vast majority through hundreds of foreign sites operating outside any local regulation.
“The reality is that online casino games are already part of New Zealanders’ lives, but without protections,” James said. “The bill will close the regulatory gap. It will legalize it.”
The gray market problem and the 2003 law in New Zealand
The New Zealand Gambling Act of 2003 prohibits the provision of online gambling services from New Zealand territory, but does not prevent citizens from accessing foreign operators. This generated what James described as a “gray market”: a zone of legal ambiguity in which millions of dollars circulate daily without the State having the capacity to regulate, supervise, or protect players.
The new legislation seeks to close that gap not by eliminating the supply, but by drawing it into a formal framework. The logic is that, if New Zealanders are going to play online anyway, it is preferable that they do so on licensed platforms, subject to consumer protection and harm minimization standards.
Up to 15 licenses: a data-driven decision
One of the most striking aspects of the project is the decision to issue a maximum of 15 licenses. Far from being an arbitrary number, James explained that it responds to concrete data: more than 95% of New Zealanders who currently play online do so on approximately 15 foreign sites.
“This limit will balance consumer choice,” James said. “They will be able to choose from those 15 providers and the goal is for New Zealanders to access and use online casinos with one or more of those operators. We believe this helps us with regulation, maintaining harm minimization standards and controlling growth.”
By aligning the number of licenses with actual player habits, the government is betting that the transition from the gray market to the regulated one will be smooth and effective, without generating such a restricted supply that it pushes users back toward illegal operators.
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Tougher sanctions for illegal offshore operators
The new New Zealand law not only enables licensed operators, but also significantly raises the cost of operating outside the system. Sanctions for offshore sites that continue to attract New Zealand players without authorization could reach $2,9 million dollars, compared to the current maximum fine of just $5.870 dollars. In addition, the bill gives regulators the power to block and take down illegal websites.
Advertising rules are also part of the regulatory design. Licensed operators will be allowed to market their products, with restrictions, while advertising may not be directed at minors or contradict the harm minimization objectives established by law.
The regulation implementation schedule
The New Zealand bill recently passed its second reading in Parliament and is expected to move to the Committee of the Whole House before formal approval. The implementation schedule provides for the legislation to come into force on May 1, 2026, with the receipt of expressions of interest in July, a license auction in September and an application process starting in October.
From December 1, 2026, only licensed operators will be able to offer online gambling services to New Zealand residents. Operators already operating and who have submitted an application may continue to do so until their case is resolved or until June 1, 2027, whichever comes first.
The New Zealand model and its lesson for the regional debate
New Zealand’s approach offers an interesting contrast to the trend in other countries that oscillate between rhetorical prohibition and incomplete regulation. Instead of pretending that online gambling does not exist or criminalizing a widespread practice, the government chose to recognize the reality of the market and design a regulation tailored to it.
“An incorrect balance will mean that people will opt for the black market and New Zealanders will play without any type of support or protection,” James warned. The phrase summarizes the philosophy behind the law: regulating is not capitulating to gambling, but regaining control over how and where it happens.
