BetPlaysIn this article, we will once and for all decypher the New Zealand gambling market and provide answers to some conundrums that even the National and Labour parties can’t seem to agree on, and that individual research papers don’t answer as they focus on one area only. We will combine the known research data to answer questions such as:
The New Zealand gambling market has several components that are intertwined so we can’t blindly look at one piece of stats or a research paper, especially as one large area of the market – the black market – is an unknown. These are the components that comprise the NZ gambling market:
The New Zealand land-based gambling expenditure – money lost on gambling – currently stands at $2.8bn as reported by the DIA. This is a 15% increase over the last five years. If the trend continues, the market is expected to be worth $3.2bn in five years and it will surpass $3bn in 2025/26.
| Gambling activity | 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 |
|---|---|---|---|---|---|
| TAB NEW ZEALAND | $332 | $315 | $385 | $380 | $376 |
| NZ LOTTERIES COMMISSION | $530 | $631 | $694 | $654 | $710 |
| GAMING MACHINES (outside Casinos) | $924 | $802 | $987 | $833 | $1,070 |
| CASINOS | $616 | $504 | $559 | $387 | $604 |
| TOTAL | $2,402 | $2,252 | $2,625 | $2,254 | $2,761 |
The gambling expenditure descried above is only for the four main types of gambling activity – TAB racing and sports betting, NZ Lotteries products, gaming machines outside casinos, and casino gambling. Therefore, it includes actual land-based gambling (casinos and gaming machines) but also TAB online sports bets on tab.co.nz. Technically, this is domestic gambling, not necessarily land-based.
Under the new gambling regulation regime as proposed by National, TAB and NZ Lotteries will retain the monopoly on sports betting, racing and lottery products as the licensed foreign-based operators won’t be allowed to offer these products. TAB is the sole online betting operator in New Zealand – black market sportsbooks excluded – in partnership with Entain.
These numbers include the five SkyCity land-based casinos, but not their online operation as that is technically an offshore casino since the SkyCity Online Casino is licensed in Malta.
This market is expected to grow slowly and steadily over the following years.
It remains to be seen whether the NZ-licensed online casinos, that will become a thing when the regulatory framework is introduced, and which will probably include SkyCity Online, will appear in this statistics or some other.
Since 2016, offshore gambling operators must pay GST at a rate of 3/23 of their gross profits from the New Zealand players. The last known total profit of offshore operators that paid the GST was $345m, which means New Zealand got $45m in GST.
These taxpayers are the online casinos that do business by the book and that carry a strong licence such as Malta or United Kingdom, and it certainly includes SkyCity Online, that operates under a Malta licence.
Under the new regime that started with 1 July 2024, in addition to 13% GST the operators will pay 12% offshore gambling duty, which will instantly increase the tax burden on the operators that are currently paying GST from NZ$41m to NZ$86m annually.
According to the New Zealand government, the new tax regime and upcoming IP geoblocking of offshore operators that refuse to pay the GST and the offshore gambling duty will increase the number of willing taxpayers.
NZ$179m is the number mentioned by the National Party, and to reach it the number of taxpayers would merely have to double. While the Labour Party disagrees with this number and considers it overblown, we at DashTickets believe the estimate is correct, if not conservative. If there will indeed be an increase in the number of taxpayers, the offshore casino tax revenue could surpass NZ$179m.
Two questions remain – what is the percentage of offshore tax dodgers that will be willing to pay the 25% tax on their income in New Zealand, and what is the size of the black market. At the moment, no one knows the answer and can not even make an educated guess.
It has been estimated that there are a grand total of 4,800 active online casinos globally, although not all of them have a significant market share, obviously. Us at DashTickets would estimate that there are anywhere from 30 to 300 online casinos that an average consumer has heard of.
New Zealand gambling lawyer Jarrod True of True Legal said the government has budgeted a taxable annual revenue of NZ$500m for regulated online gambling. However, estimates made by TAB and NZ Lotteries say the currenty black market spend is closer to $900m.
When 25% tax is applied, this would produce tax revenue between $125m and $225m. The government proposed tax revenue of $179m falls neatly between these two numbers.
The annual spend at local casinos, TAB and NZ Lotteries is $2.76bn, while those online offshore operators that pay GST have a revenue of $345m. This means that 89% of the money is spent locally.
This will likely shift towards online operators in the future as more offshore operators are brought under the tax umbrella and as few selected casinos get local licences, making them appear as household names to Kiwis.
The known numbers are the land-based casino total spend of $2.76bn and the revenue of online casinos that pay GST, which is $345m annually. This makes for a total spend of $3.1bn annually.
What we don’t know is the amount of money that is spent on the black market, which would be the offshore online casinos that don’t have their statistics registered anywhere.
In 2022, the population of New Zealand was 5.124 million. Therefore, on average, a person in New Zealand spends $605 on gambling.
If we only look at the adult population – there were 3.69 million registered voters for the 2023 general election – the average spend increases to $840.
Around 2.8 million New Zealanders, or over 75%, participate in some form of gambling annually. If we look at this group alone, then an average Kiwi who gambles spends $1107 on gambling.
These are the most accurate numbers on New Zealander gambling spend you’ll ever see, as DashTickets is the only one that combined the land-based gambling spend with the known online offshore gambling spend. The correct number for an average Kiwi gambling spend is between $605 and $1107 per year, depending on which group you look at.
These numbers are likely much higher, as we can’t know how much do Kiwis spend on offshore casinos. If National’s estimate of the black market is to be trusted, then feel free to add between 10% and 20% to the above numbers.
The 2018 Health and Lifestyles Survey revealed that 13% of New Zealanders have participated in online gambling, but 9% went online to buy a lotto ticket. This means that 69% of New Zealanders who gamble online, do so to place bets on lottery.
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