New Zealand's online casino market projected to reach NZ$500 million by 2026

The New Zealand online casino market is evaluated to reach NZ$500 million per year by 2026, according to recent forecasts. The government has been developing a system of e-gambling regulation so that both international and potentially domestic players would benefit from the new rules and enjoy the gameplay. The new regulatory framework will ensure that gambling is a safer activity while maintaining bank-ability for online casinos. However, tax income obtained from this realignment will mitigate some of the problem of unregulated offshore gambling. We are traveling to the scenic and wonderful New Zealand to delve into the world of gambling in the country, and find out what are the developments in the gambling arena within New Zealand.

Gambling market in New Zealand today

Today's New Zealand gambling market New Zealand's gambling market is a notable aspect of the country's economy and is forecasted to grow to NZ$2.89 billion by the end of 2025. This market includes sports betting, lotteries and pokies (slot machines). But the online gambling market, which is largely unregulated, has thrived — with offshore operators targeting New Zealanders. It is believed that illegal gambling is worth roughly $NZ900 million a year, nearly twice the government's quota for a regulated online casino market.

Currently, online gambling is illegal but tolerated, leading to a thriving grey market. As the people are increasingly looking for a legal and supervised online casino setting, the government announces licensed casinos to be up and running by 2026. This will shift the focus of gambling from unregulated sites to a safer, taxable market, estimated to produce NZ$500 million a year. This level of regulation will establish consumer safeguards, cleaner gambling environments and additional tax revenue that the government can utilize to fund local projects, all while future-proofing New Zealand's online casinos for growth.

Projected market growth for the online casino industry

The online casino industry in New Zealand is likely to experience significant market growth in the nearest future. The government has introduced industry regulation expectations for 2026 to develop an ordered framework that will have a positive impact on the market's growth. The regulatory changes will open numerous economic opportunities which establish New Zealand as an influential gaming participant worldwide.

Forecasted NZ$500 million annual market by 2026

Regulated online casino market in New Zealand estimated to generate NZ$500m a year when it launches in 2026. This projection assumes a deliberate policy shift to legalize and tax the previously informal sector in line with international norms. However, industry experts think the market is more likely around NZ$900m, taking into account the size of the current grey market.

Estimate of comparative revenues

Regulatory change has a significant impact on the gambling market, relative to other established sectors. This creates an ideal demand: in 2024, online gambling was worth an estimated $900m a year to offshore sites, according to local lawyer's report. The numbers are impressive. The change will enable improved customer protection and higher tax generation, and will also reduce the offer of uncontrolled gambling.

Industry growth drivers

A number of factors are behind the explosive growth of New Zealand's online casino market. The following forces are helping to define the future of the space as it edges closer to regulation. Here are some of the key factors behind the market's expected growth:

• Technological innovations: Breakthroughs in gaming technologies like VR and AR are providing online casinos with the power to offer a more immersive experience to their players. These upgrades provide an improved gaming experience, enhanced graphics and more engaging features which in turn generate a wider, more tech-savvy audience and increased player retention.
• Boost in mobile gaming: With the proliferation of smartphones, mobile gaming has started to rule the online casino market. Now, players can enjoy casinos at their convenience, day or night, which has further increased player participation. It's easier to gamble online thanks to mobile-optimized apps which provide seamless, easy-to-use experiences for the masses.
• New approaches to regulation: Public attitudes towards internet gambling are evolving with a developing consensus in favor of regulation based on consumer protection and ensuring a safe experience. With increased demand for reputable and non-biased, regulated online casinos for New Zealanders, this step of regulation has the potential to ensure a more honest and responsible gambling environment that can provide a win-win situation for both players and operators.
• Economic benefits: Allowing for a legal online casino industry will result in a boom in economic activity, including the collection of licence fees, taxes and the creation of jobs. Tax revenues can be directed by the government back into social services and problem gambling solutions. A regulated market also calls for the attention of foreign entrepreneurs and an overall investment environment, thus further solidifying New Zealand's footprint on the international iGaming scene.
• Global trends: New Zealand's plans to regulate are in line with global trends, and as countries all over the world move to regulate online gambling. This global change protects consumers, ensures fair competition and raises much-needed tax money. In following these international guidelines, New Zealand can continue to progress in the world gambling market while creating a safe environment for its players from the country.

Regulatory and government aspects

The New Zealand government is currently working on the online casino framework so that it is fully launched by the end of 2026. The projects' intention is to organize and regulate burgeoning online gambling market — turning it from the grey market that it currently is to a legally and technically controlled sector. In this context, a finite number of permits will be issued in order to maintain an open and competitive market through the imposition of rigorous regulations.

The government's policy is a balance of accessibility and responsibility; at the same time, the significant elements of the regulatory bill will cover overall and individual topics related to advertising, consumer protection, and the preservation of the integrity of gaming. Those rules are set to be rolled out and they should include provisions for operators to adopt responsible gambling checks, including age verification and self-exclusion. Furthermore, ad guidelines will be established, so promotional materials do not target youths or those who are most susceptible.

The legislation is destined not only to safeguard players in a safer gambling environment, but to enable the industry to achieve its potential and generate maximum revenue thanks to a fair tax scheme. The government's objective is to establish a safe and regulated online casino market so that players can trust playing online, while also enabling the site to contribute taxes that will fund the community.

Here are the key features of the regulatory bill and implications for the market and operators:

The grey market: impact and current spend

The grey market is an excavating part of New Zealand's online casino industry, and one that has helped increase the strength of the market. The lack of regulation on this market shows the extreme demand for online betting options in New Zealand and just how much money could be made from the industry once it's regulated.

With the government continuing into their second year of discussing and negotiating to bring forth a regulated market, this influence of the grey-market will have a huge influence on the future of New Zealand online gambling. Below, there are some ongoing grey market trends to consider:

• Significant market size and expansion: The grey market is said to be worth around NZ$900 million per year which demonstrates that the industry is growing in New Zealand. This growing unregulated market demonstrates how much money could be made from a regulated market. Now that offshore operators have by far the largest share, the government can create a regulated market closer to its target of NZ$500 million
• Expanding participation during the COVID-19 pandemic: The pandemic prompted a surge in online gambling, with the closure of brick-and-mortar sites. A lot of Kiwis began shopping online, a habit that remained after the pandemic was over. The move suggests that new Covid-19 consumer behaviours have become permanent, which bodes well for online gambling demand and the need for legal services
• Higher engagement rates among younger age groups: Interest in online gambling among young people (16-24 years) has become the focus of recent research, partly due to the rapid rise in gambling activity through the online channel, and the convenience afforded by mobile devices. This is the target group who is riskier for gambling problems and will be exposed to unfair practices and addiction risk if they are not legislated. While the regulation can also be a significant way of protecting younger players and driving sustainable growth in the market
• Lack of consumer protections: For players, in an unregulated online gambling market, there are no consumer protections, like fair play, dispute resolution, responsible gaming mechanisms. Since there is no regulation, the players are exposed to rapacious treatment, with no protection from unscrupulous operators. Government regulation is required to ensure fair play and the safety of those who are most at risk
• Government's response and plans: By 2026 New Zealand hopes to have implemented a regulatory system to provide improved safety for online gambling activities. This model will accomplish consumer protection, good play and taxes. By embracing the industry through regulation the government hopes to provide increased protections for players and facilitate the future expansion of the market

These grey market trends show the appetite for New Zealand facing online gambling services and the difficulties that players encounter in an unregulated environment. With the government pressing on with its plans, tackling these concerns will be key to creating a safe and fair online gambling market in New Zealand.

Challenges and risks the market may face

While New Zealand is on its way to regulation of the online casino industry, a few concerns and possible downsides must be taken into consideration for a seamless transition and steady progress. These range from issues of a regulatory nature and tax matters to limiting the impact of offshore gaming operators and strengthening the consumer protection and responsibility of operators.

Regulatory compliance and taxation issues

The implementation of an online casino regulatory framework in New Zealand is expected to produce a large amount of tax money. The government expects the size of the regulated online casino market to be worth NZ$500 million a year by 2026. But taxing gambling operators - particularly those based offshore - is not straightforward. Whereas domestic operators are subject to Goods and Services Tax (GST) and other duties, offshore operators have, until now, functioned beyond the tax grasp of the New Zealand authorities.

To offset this, the government has imposed an offshore gambling duty, where offshore Internet casino operators must pay a 12% duty on the gambling income received from Victorian players on top of the GST that already applies. This is designed to even the playing field so that all operators pay their fair share of taxes to the country.

Risks of offshore gambling operators

There are a number of risks associated with offshore gambling operators who offer online casinos to New Zealand players. They can be in violation of local laws and also contribute to problems with unfair gaming, poor player protection, and, worst case scenario, financial harm to players. In addition, no tax dollars are generated on these offshore platforms, which means a loss of potential income to the New Zealand treasury. The government's introduction of the Forward Model assessing tax on offshore gambling is a move in the right direction to combat some of these risks posed when offshore operators do not pay their dues in taxes.

Consumer protection and responsible gambling

Protection of consumers' interests and fostering a responsible gaming environment are all important for the regulatory framework in the market of online gaming. Measures proposed by the government to protect players include age verification checks, self-exclusion options, and gambling limits. The setting up of a licensing regime will further have a number of advantages as it will create the mechanism of imposing strict controls on operators, providing an environment for the players that is more secure and covered. These initiatives are designed to minimize gambling harm and improve the integrity of the online casino industry in New Zealand.

Profitable market opportunities

It is crucial to know where to look, and when and how to take advantage and profit from the lucrative online casino market in New Zealand. Operators can help grow the market while complying with regulations by targeting high revenue potential areas.

Final thoughts

General interest in the New Zealand online casino market is set to soar and could top NZ$500m a year by 2026 on the back of regulation. A shift from the grey market to a regulated one would raise taxes and, more importantly, promote consumer protection and end illegal offshore gambling. The main drivers of growth are going to be mobile gaming, live dealer games, and innovation. There is potential for the market to flourish as it seizes opportunities that come to the fore, such as licensing, responsible gambling, and partnering, providing a more secure, lucrative space for both players and operators.