The New Zealand government has announced plans to increase the Offshore Gambling Duty from 12% to 16% through the Online Casino Gambling Bill. Minister of Internal Affairs Brooke van Velden has confirmed that the additional revenue will fund local community development initiatives. The announcement came after massive blowback from local communities, who feared that the proposed Online Casino Bill would restrict grassroots sports funding.
New Zealand Minister Announces Online Tax Hike to Fund Community Development Initiatives: Quick Overview
- The New Zealand government has announced a 4% hike in gambling taxes. The additional funds will support local community initiatives, including sports clubs, community groups, and grassroots organisations.
- Interior Minister Brooke van Velden explained that the government plans to invest revenue from online gambling in community development. This effort will not compromise the government’s mission to eradicate problem gambling.
- The Cabinet has proposed a two-year review after implementation of the community returns initiative to evaluate its impact on local communities. Lawmakers will follow this data-based approach to make future decisions.
Public Feedback Fuels New Zealand’s Gambling Tax Reforms
On Wednesday, October 29, New Zealand’s Minister of Internal Affairs, Brooke van Velden, announced a hike in gambling taxes from 12% to 16%. The additional revenue will fund local communities. The minister explained that the government has listened to the public and is “delivering on what matters the most to communities” nationwide.
Minister van Velden noted:
The message from communities was loud and clear – if we’re regulating online gambling, they want to see benefits flow back to local sports clubs, community groups, and grassroots organisations. I have listened, and now as a Government, we are delivering on what matters most to communities across the country.
In July, Ms van Velden presented the Online Casino Bill for parliamentary approval. The draft bill seeks a complete ban on unlicensed gambling sites targeting Kiwi customers. It suggests auctioning 15 gambling permits during the first licensing window, allowing authorities to regulate the sector.
However, the news generated widespread backlash from local sports bodies nationwide, which have historically relied on gambling sponsorships to stay operational. In August, over 50 regional sports bodies representing football, cricket, rugby, cycling, etc., had asked the government to rethink the policy.
Draft Bill Plugs a Critical Gap in New Zealand’s Regulatory Framework
Van Velden reiterated the government’s commitment to ensuring consumer safety and preventing gambling harm. Community funding will not compromise that agenda, the minister confirmed.
She explained:
Problem gambling prevention and harm minimisation standards are non-negotiable and unchanged. Protecting Kiwis from gambling harm is still my number one objective. Community funding will not compromise this Government’s commitment to reducing gambling harm.
The minister explained that increasing the Offshore Gambling Duty from 12% to 16% will enable the government to direct this 4% revenue to community return initiatives. This will open a new revenue stream for local communities. However, the exact impact of this tax reform is uncertain.
The Minister stated:
While I am confident the regulated online casino market will provide new community funding opportunities for New Zealand sports clubs and community organisations, I do acknowledge that predicting the exact impact on existing Class 4 [pokies] returns creates some uncertainty.
She explained that the cabinet has agreed to review the impact of the community returns policy after two years. Lawmakers will use the real-world statistics to make data-based decisions in the future.
Ms van Velden said:
Cabinet has agreed on a two-year review after implementation of the community returns policy to assess the impact of online casino gambling on other forms of gambling and community returns. This evidence-based review will inform necessary adjustments, allowing us to make informed policy decisions based on real-world data in the future.
The minister emphasised that the Offshore Gambling Bill will not drain resources from local communities but open new revenue streams. Additionally, the bill will plug a gap in the existing regulatory framework.
She said:
This is new money on top of existing funding from pokies, Lotto, and TAB. We’re not taking anything away – we’re adding to what’s already there. Right now, Kiwis are gambling on thousands of overseas websites with no safety nets, no spending limits, and no recourse when things go wrong. That’s unacceptable. This Bill brings those operators under New Zealand law, with proper consumer protections, harm minimisation measures, and now – community benefits.