Almost 4,000 consultation responses raised concerns over a potential drop in community returns.
New Zealand’s government has agreed to include a community funding guarantee within the country’s new Online Casino Gambling Bill, amid concerns that the launch of legal iGaming could lead to a decline in community returns from land-based venues.
Cabinet papers dated 28 November revealed the government was considering ringfencing
an amount equivalent to 4% of operator Gross Gambling Revenue to fund community returns.
The document said proposed changes could result in community returns of between $10 million and $20 million in the first 12 months from 1 January 2027, depending on the total GGR generated by the licensed online casino gambling market.
The matter was a key focus of the recent Governance and Administration Committee report on the bill, which had its initial reading in parliament in July. A public consultation on the legal framework drew more than 5,000 submissions from individuals and organisations, with almost 4,000 raising concerns over community returns.
The community returns are a source of funding taken from land-based gambling revenue and distributed back to sports clubs and community groups. This is then used to support grassroots activities, including helping Special Olympics athletes get to national competitions.
Some had raised concerns over legal iGaming drawing players away from traditional land-based gambling such as pokies machines, which could lead to a decline in community returns.
Has the iGaming launch been delayed?
Notably the document reports this ringfenced community funding amount will be charged from 1 January 2027, indicating the launch of legal online gambling in New Zealand could be delayed by a few months, from the initial July 2026 go live date.
This launch date was previously called into question by some legal experts. Jamie Nettleton and Samuel Gauci, both of Addisons, told iGB in July that the targeted go-live date was tight, especially due to length of the now-completed consultation.
Minister of internal affairs Brooke van Velden publically acknowledged the issue in a statement dated 4 December. She said the bill would include a guarantee of channelling some iGaming revenue back into New Zealand communities.
“Many groups were concerned that more gambling online would mean less gambling on pokies machines, and therefore a decrease to the level of funding returning to community groups,” van Velden said.
“Submissions clearly showed New Zealanders want community returns from online gambling activity to ensure communities continue to get the funding they need. Cabinet agreed to provide these returns and the committee supported that decision.
“We will review online casino gambling’s impact on pokies revenue after two years to ensure that community returns are still providing adequate funding for community and sports groups.”
The committee also recommended the Lottery Grants Board be responsible for distributing community returns.
iGaming bill will reduce gambling harm according to minister
Other issues raised from the consultation included the impact of legal iGaming on gambling harm in New Zealand. Some put forward concerns that “normalising” gambling could lead to greater harm, while others flagged the potential for increased harm from higher levels of gambling advertising.
In response, van Velden said the bill would include measures to reduce gambling harm. She said this would be its primary goal “first and foremost” and improve on the current black market situation, whereby no safeguards are available with unlicensed websites.
“I’ve listened carefully to these concerns,” she said. “The regulatory settings the bill will put in place are intended to reduce gambling harm first and foremost. This represents a significant improvement from the status quo where there are no safeguards to protect Kiwis gambling online.
“This is an important piece of legislation that will bring online casino gambling under New Zealand law for the first time. I look forward to seeing it progress through the House”
When might legal iGaming launch in New Zealand?
The bill was first tabled earlier in 2025 and passed its initial first reading in parliament in July, after which it was passed to the Governance and Administration Committee ahead of the consultation.
Should the bill pass, up to 15 operators will be granted licences in the regulated iGaming market. Other key points include operators having to pay a goods and services tax and an offshore gambling duty of 12%, as well as a mandatory levy of 1.24% of profits to fund services for gambling harm.
Licensees would be allowed to advertise gambling activities with limitations, such as no advertising to children. A suitable age verification tool will be required.