New Zealand's online gambling scene is facing a major shake-up as the government gears up to regulate the iCasino market by 2026. With the rise of online gambling, especially during and after the pandemic, the move comes as no surprise. However, there is a bit of a debate about how much revenue this new regulated market will bring in and just how many licenses the government will issue. 

 A Thriving Market Ready for Regulation

Gambling has always been a popular pastime in New Zealand, generating an impressive NZ$900 million annually. The online sector, however, remains largely unregulated, operating in a grey area where profits often slip through the government’s fingers. 

To address this, the New Zealand government has estimated that a regulated online casino market could bring in NZ$500 million each year. They plan to issue a limited number of licenses through an auction, aiming to bring order to the iCasino "Wild West" market. 

 What Industry Experts Have To Say

While NZ$500 million sounds like a hefty sum, some industry insiders believe the government might be lowballing its estimate. Jarrod True, a well-known gambling lawyer in New Zealand, suggests that the current grey market spending is closer to NZ$900 million. 

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“Online gambling is very, very popular in New Zealand, and we saw a massive explosion with Covid-19 and our physical venues locked down. That’s really continued since,” True explained.

So, is the government underestimating the potential of the NZ iCasino market? Perhaps. True also pointed out that the upcoming 2026 launch, which conveniently coincides with a general election, suggests the government is prioritising this legislation. This could mean that the government is hoping to use the regulation of the iCasino market as a political win, potentially influencing the timing and scope of the regulation. 

 More Questions Than Answers

“How many licenses?” is one of the biggest questions surrounding this new regulatory framework. At this stage, the details are sparse, with True mentioning that it is “not yet known how many online licenses the regulator will allow, nor the costs associated with licensing.” There’s also speculation that land-based gambling giants like SkyCity Entertainment Group might have lobbied for a limited number of online licenses to secure a larger market share. 

Weighing in on the debate, finance minister Nicola Willis acknowledges that the government might raise less revenue than initially hoped. According to the Inland Revenue Department's (IRD) estimation, the new tax policy for online gambling could bring in NZ$35 million a year, significantly lower than the NZ$176 million the National Party projected before the last elections. 

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“It may not be as high as we estimated; however, work on the regulatory regime will continue in such a way that it supports this sector being fairly taxed,” Willis admits. 

However, the road to regulation is still long and winding. A draft is set to be released later this year, followed by public consultations in 2025.

 A $500m Opportunity or Just the Beginning?

With all this uncertainty, one thing is clear: New Zealand’s online gambling market is in for some big changes. Whether the government's conservative estimates will hold up or if the market will exceed expectations remains to be seen. But one thing is certain: 2026 is shaping up to be a pivotal year for the country’s gambling industry. 

As the legislation tediously makes its way through parliament and public consultations begin, the iCasino market’s future will start to take shape. Will New Zealand’s auction gamble pay off? We’ll just have to wait and see.