Kiwi Gambling Reboot: New Zealand Extends TAB’s Online Sports-Betting Monopoly

New Zealand has enacted landmark legislation that fundamentally reshapes its gambling market by extending TAB NZ’s traditional land-based monopoly over sports and racing betting into the digital realm. The Racing Industry Amendment Act 2025, which received Royal Assent on June 28, 2025, makes TAB NZ (operated under a 25-year agreement with Entain) the sole legal provider of online sports and racing betting to customers located in New Zealand, effectively shutting out the offshore operators that previously captured an estimated 90% of the country’s online sports betting market.

This legislative transformation represents one of the most significant gambling policy shifts in New Zealand’s history, creating a protected digital environment for sports and racing betting while simultaneously preparing the ground for a liberalized online casino market scheduled to launch in 2026. The dual-track approach mirrors regulatory strategies employed in Denmark and other jurisdictions that maintain state monopolies for certain gambling verticals while opening others to competition.

Key Takeaways

• Digital Monopoly Extension: TAB NZ now holds exclusive rights to offer online sports and racing betting to New Zealand customers, extending its existing land-based monopoly into digital channels.
• Immediate Implementation: The amendment received Royal Assent on June 28, 2025, and took effect immediately, creating urgent compliance requirements for offshore operators.
• Revenue Protection: The law aims to recapture an estimated 90% of online sports betting revenue currently flowing to offshore operators, potentially increasing onshore gross gaming revenue from NZ$75 million to NZ$160 million by 2027.
• Enhanced Enforcement: Civil penalties of up to NZ$5 million for corporations and NZ$300,000 for individuals now apply to unlicensed online betting operations targeting New Zealand customers.
• Racing Industry Support: Entain has committed to a NZ$100 million investment in New Zealand racing infrastructure, contingent on successful implementation of the monopoly extension.
• Parallel Casino Liberalization: The Online Casino Gambling Bill, introduced on June 30, 2025, proposes licensing up to 15 online casino operators from 2026, creating a hybrid regulatory model.
• Consumer Protection Focus: New harm minimization regulations will be implemented specifically for online channels, with the Department of Internal Affairs serving as interim regulator.

Comprehensive Overview of Legislative Changes

The Racing Industry Amendment Act 2025 introduces sweeping changes to New Zealand’s gambling regulatory framework, transforming the country from a market where offshore operators could legally serve New Zealand customers to one where only TAB NZ may offer sports and racing betting services.

Pre and Post-Amendment Comparison

Legislative Timeline and Process

The amendment followed an accelerated but thorough legislative process:

1. December 10, 2024: Racing Industry Amendment Bill tabled in Parliament by Racing Minister Winston Peters
2. April 2025: Select Committee reported the bill back without major changes following public consultation
3. June 25, 2025: Third reading passed with cross-party support in Parliament
4. June 28, 2025: Royal Assent granted; provisions commenced immediately

The cross-party support for the legislation reflected broad political consensus about the need to address revenue leakage from New Zealand’s gambling market while enhancing consumer protection measures.

Strategic Rationale: Addressing Market Failures

The New Zealand government’s decision to extend TAB’s monopoly online was driven by several compelling economic and social factors that had created what officials characterized as unsustainable market conditions.

Revenue Leakage Crisis

Research by H2 Gambling Capital revealed that only 10% of New Zealand’s online sports betting expenditure occurred through domestic operators, with the remaining 90% flowing to offshore platforms operating in regulatory gray areas. This massive revenue leakage had several consequences:

• Racing Industry Funding: TAB NZ distributions underpin approximately 90% of horse and greyhound racing code income, making the sector vulnerable to continued revenue erosion
• Tax Revenue Loss: The government was unable to collect meaningful tax revenue from the majority of sports betting activity
• Economic Impact: Offshore spending reduced the economic multiplier effects of gambling expenditure within New Zealand

“The current situation was simply unsustainable,” explained Racing Minister Winston Peters during parliamentary debates. “We were watching New Zealand’s racing industry slowly bleed to death while offshore operators profited from Kiwi customers without contributing to the sport or paying their fair share of taxes.”

Consumer Protection Concerns

Government analysis identified significant consumer protection gaps in the offshore-dominated market:

• Limited Harm Minimization: Many offshore operators lacked robust know-your-customer (KYC) and harm minimization tools required under New Zealand consumer protection standards
• Dispute Resolution: New Zealand customers had limited recourse when experiencing problems with offshore operators
• Responsible Gambling: Offshore sites often lacked integration with New Zealand’s problem gambling support services
• Data Protection: Customer data protection standards varied significantly among offshore operators

Comprehensive Enforcement Framework

The amendment establishes a robust enforcement mechanism designed to eliminate offshore operators’ access to the New Zealand market while providing clear consequences for non-compliance.

Civil Penalty Structure

The legislation introduces substantial financial penalties for unauthorized online betting operations:

• Corporate Penalties: Up to NZ$5 million for companies facilitating unlicensed online betting
• Individual Penalties: Up to NZ$300,000 for individuals involved in unauthorized operations
• Marketing Restrictions: Penalties apply to both direct provision of services and marketing activities targeting New Zealand customers

Regulatory Powers and Enforcement Tools

The Department of Internal Affairs (DIA) has been granted enhanced powers to enforce the new monopoly:

• Account Closure Orders: Authority to require offshore operators to close New Zealand customer accounts and return balances
• ISP Blocking: Powers to order internet service providers to block access to unauthorized gambling websites
• Payment Interdiction: Ability to work with financial institutions to prevent transactions with unlicensed operators
• Public Reporting: A dedicated tip-line (gambling@dia.govt.nz) for public reporting of illegal gambling sites

Transition Period and Compliance

The DIA has provided offshore operators with a 60-day grace period ending August 27, 2025, to exit the New Zealand market gracefully. This transition period allows operators to:

• Close existing customer accounts in an orderly manner
• Return customer balances without penalty
• Cease all marketing activities targeting New Zealand customers
• Implement geo-blocking measures to prevent future New Zealand access

Industry Response and Market Reaction

The legislation has generated diverse responses from different stakeholders within New Zealand’s gambling ecosystem and international operators previously serving the market.

TAB NZ and Entain Partnership Response

TAB NZ and its operating partner Entain have welcomed the legislation as critical for ensuring sustainable racing industry funding. Entain has confirmed that its previously announced NZ$100 million investment in New Zealand racing infrastructure will proceed following successful implementation of the monopoly extension.

The investment commitment includes:

• Technology Infrastructure: Upgrading TAB NZ’s digital platform to international standards
• Racing Facilities: Modernizing tracks and training facilities across New Zealand
• Breeding Programs: Supporting thoroughbred and standardbred breeding initiatives
• International Partnerships: Leveraging Entain’s global reach to enhance New Zealand racing’s international profile

Offshore Operator Reaction

While most offshore operators have remained publicly silent about the legislation, market behavior suggests significant concern about the new enforcement regime. Within 48 hours of Royal Assent, several prominent international operators geo-blocked New Zealand IP addresses, indicating early compliance with the new restrictions.

Industry sources suggest that the substantial financial penalties have created strong incentives for compliance, particularly given New Zealand’s relatively small market size compared to the potential costs of enforcement action. However, crypto betting sites are not out of discussion, so they could be a great alternative while still available.

Local Sports Organizations

New Zealand’s major sports organizations have expressed support for the legislation, anticipating increased funding through enhanced TAB NZ distributions. Sports bodies that have historically received revenue sharing from TAB NZ expect to benefit from:

• Increased Handle: Higher domestic betting volumes as offshore customers migrate to TAB NZ
• Enhanced Distributions: Improved financial performance enabling larger revenue sharing payments
• Long-term Stability: Reduced uncertainty about future funding levels

Consumer Advocacy Perspectives

Consumer protection groups have expressed mixed reactions to the monopoly extension:

Positive Aspects:

• Stronger harm minimization regulations specifically designed for online channels
• Better integration with New Zealand’s problem gambling support services
• Enhanced consumer protections compared to offshore alternatives

Concerns:

• Lack of price competition may result in less favorable odds for consumers
• Reduced choice in betting platforms and products
• Potential for complacency in service quality without competitive pressure

“While we support stronger consumer protections, we’re concerned that eliminating competition could lead to higher prices and lower service quality,” commented a spokesperson for the New Zealand Consumer Protection Alliance.

Integration with Planned iGaming Liberalization

New Zealand’s approach to gambling regulation demonstrates sophisticated policy coordination, with the sports betting monopoly operating alongside planned liberalization of online casino gambling.

The Online Casino Gambling Bill

Introduced to Parliament on June 30, 2025, just two days after the Racing Industry Amendment Act received Royal Assent, the Online Casino Gambling Bill proposes a dramatically different approach for casino gambling:

• Licensed Competition: Up to 15 three-year licenses for online casino operators
• International Operators: Open to both domestic and international companies meeting licensing requirements
• Comprehensive Regulation: Detailed consumer protection and technical standards
• 2026 Launch: Targeted market opening in early 2026

Strategic Policy Rationale

This dual-track approach reflects careful consideration of different gambling verticals’ characteristics:

Sports Betting Monopoly Justification:

• Racing industry funding requirements create public interest in maintaining revenue streams
• Sports betting’s relatively simple product structure makes monopoly provision feasible
• International experience with tote-style monopolies provides proven regulatory models

Casino Competition Rationale:

• Casino games’ product diversity benefits from competitive innovation
• No specific industry funding requirements create less need for revenue protection
• Consumer choice in casino products may be more important than in sports betting

This policy framework mirrors approaches adopted in Denmark and other European jurisdictions that maintain selective monopolies while embracing competition in other verticals.

Economic Projections and Market Impact

The New Zealand government has developed detailed projections for the monopoly extension’s economic impact, reflecting both optimistic assumptions about market recapture and realistic assessments of implementation challenges.

Revenue Growth Projections

Implementation Challenges

Government analysts acknowledge several challenges that could affect these projections:

• Enforcement Effectiveness: Success depends on the DIA’s ability to block offshore operators and prevent new entrants effectively
• Product Quality: TAB NZ must deliver a competitive digital experience to retain customers who might otherwise seek offshore alternatives
• Technology Investment: Significant platform upgrades are required to match international standards
• Customer Migration: Some customers may reduce betting activity rather than migrate to the domestic monopoly

Next Steps and Implementation Timeline

The successful implementation of New Zealand’s new gambling framework requires careful coordination of multiple regulatory and operational initiatives over the coming months.

Immediate Priorities (Q3 2025)

1. Offshore Operator Exit: Completion of the 60-day transition period by August 27, 2025
2. Harm Minimization Regulations: Public consultation on new online gambling harm prevention standards
3. Enforcement Activation: Full deployment of DIA’s enhanced enforcement capabilities
4. Platform Enhancement: Acceleration of TAB NZ’s digital platform upgrades

Medium-term Objectives (Q4 2025 – Q2 2026)

1. iGaming Regulator Establishment: Creation of the new gambling authority responsible for casino licensing
2. Casino Licensing Process: Implementation of the competitive licensing process for online casino operators
3. Market Monitoring: Assessment of monopoly effectiveness and market development
4. International Relations: Coordination with offshore regulatory authorities regarding enforcement

Long-term Vision (2026 and Beyond)

1. Regulatory Handoff: Transfer of TAB NZ oversight from DIA to the new iGaming regulator
2. Market Evaluation: Assessment of the dual-track regulatory model’s effectiveness
3. Policy Refinement: Adjustments based on market performance and consumer outcomes
4. International Best Practices: Ongoing alignment with global regulatory developments

International Context and Regulatory Innovation

New Zealand’s approach to gambling regulation represents a sophisticated attempt to balance multiple policy objectives while learning from international experiences with different regulatory models.

Comparative Analysis

The New Zealand model shares characteristics with several successful international approaches:

• Denmark: Maintains monopoly for certain gambling types while licensing competition for others
• Norway: State monopoly for most gambling with selective competitive licensing
• Finland: Monopoly provider with strong consumer protection focus

However, New Zealand’s model is unique in its explicit linkage between gambling revenue and sports/racing industry funding, creating a direct policy rationale for revenue protection that extends beyond general fiscal considerations.

Regulatory Innovation

Several aspects of New Zealand’s approach represent innovative policy solutions:

• Transition Management: The 60-day grace period for offshore operators provides a structured exit pathway that minimizes market disruption
• Dual-Track Timeline: Coordinating monopoly extension with competitive licensing demonstrates sophisticated policy sequencing
• Industry Integration: Direct linking of gambling revenue to sports funding creates clear policy coherence
• Technology Focus: Emphasis on platform quality and consumer experience recognizes the importance of competitive service delivery even within monopoly structures

Conclusion: A Bold Experiment in Gambling Regulation

New Zealand’s extension of TAB’s monopoly into online sports betting represents one of the most significant gambling policy developments in the Asia-Pacific region, demonstrating how small markets can pursue innovative regulatory solutions that balance multiple competing objectives. By creating a protected environment for sports and racing betting while simultaneously preparing for casino market liberalization, New Zealand has crafted a unique regulatory framework that attempts to optimize outcomes across different gambling verticals.

The success of this approach will depend on several critical factors: the effectiveness of enforcement against offshore operators, TAB NZ’s ability to deliver a competitive digital product, and the broader integration of monopoly and competitive elements within a coherent regulatory framework. If successful, New Zealand’s model could influence other small markets seeking to balance consumer choice, industry sustainability, and social protection within their gambling policies.

As Racing Minister Winston Peters noted during the legislation’s final reading: “This is about ensuring that New Zealand controls its own gambling destiny while protecting both our racing industry and our citizens. We’re betting on a uniquely Kiwi solution to uniquely Kiwi challenges.”

References

1. New Zealand Parliament. (2024). “Racing Industry Amendment Bill 101-1.” 
2. Department of Internal Affairs. (2025, June). “Law changes for online racing and sports betting.” 
3. New Zealand Parliament. (2024, December 10). “Hansard Debates: Racing Industry Amendment Bill First Reading.” 
4. NEXT.io. (2025, June). “New Zealand introduces online casino bill to parliament.”