Shifting Odds: The Rise of Modern Gambling & New Zealand’s Legislative Response
by levi pruden
Trigger Warning: The following content contains discussions of gambling, financial risk, and addiction, which may be distressing for some individuals.
I Introduction
There is something quite terrifying about the digital age, in that the advertisement of and access to harmful activities can become very rapidly over-propagated and under-regulated. Arguably, nowhere has this been more apparent than with the constantly evolving landscape of gambling, an area of law that the current Government of Aotearoa New Zealand has, and continues to, work to develop.
This article aims to do a few things. Firstly, it will examine the problems with modern gambling, in terms of what it looks like and how we engage with it as a society. Secondly, it will address the recently updated legislative framework in NZ for addressing these problems, and the various rationales that underline it. Finally, it offers both considerations and criticisms, presenting roadblocks and suggestions for the ongoing journey to tackle gambling as a society.
II The Problem
A Addiction: Why does it happen?
The underlying issue with gambling is that it is really, really ‘fun’. This is not anecdotal, but rather a scientific explanation of how our brains interact with and perceive the activity. Problematically though, even as repeat gambling tends to cause you great losses, it becomes much harder to break away the more you play.
This is for a few reasons, in particular that the choice to continue gambling often does not depend on success. Studies show that dopamine activity in response to gambling tends to accelerate as one gets closer and closer to the anticipated event (the reveal). Worse still, the brain of someone suffering from a gambling disorder may overreact to the possibility of reward but underreact to the reality of outcomes, motivating them, in spite of loss, to look ahead optimistically (and thus keep gambling).
Overarchingly, our willingness to gamble is reflective of the fact that we are fundamentally both irrational and vulnerable. A basic understanding of probability will tell you that you are in all likelihood going to end up a loser. The more you gamble, the more you tend towards the mean result (loss). Yet, factors such as overconfidence and efforts to ‘loss-chase’ (empowered by the “get rich quick” nature of high stakes gambling) see us continue anyway.
Scholars have argued that there is a biologically coded preference towards the pursuit of uncertain rewards, even when we might consider those rewards to be less optimal than alternative, certain outcomes. This helps to explain why we start to gamble in the first place. Addiction itself is a snowball effect of these behaviours and their effects on our brain compounding over time. Naturally, it is addiction that acts as the root cause of problematic gambling, where self-control is lost and an unhealthy relationship with the activity can quickly develop.
B Growth: Spread & Integration of Modern Gambling
Generally, society is willing to accept many behaviours that are largely acknowledged as detrimental, with alcohol and gambling being prominent activities in the lives of many. These are activities that are often not just tolerated, but embraced, at least to the extent that many are willing to engage in them to some degree. Whilst this integration has taken place over a number of years, this article is particularly focused on modern gambling, which, given its many unique and rapidly evolving characteristics, is an ample challenge to lawmakers.
In 2018, the US Supreme Court effectively overturned a widespread federal ban on sports betting (outside of Nevada) with its decision in. What has followed is the rise of massive bookies such as FanDuel, DraftKings, and BetMGM, noted for their massive spending on advertising that sees them be promoted throughout sports broadcasts and often includes major celebrity endorsements.
Inevitably, given that people watch those same sports and follow those same celebrities, this industry growth and promotion has been felt in NZ too. This is where regulatory challenges arise, as even if there are limits domestically on advertising (as applied to the TAB), we live in a globalised and interconnected world where the unregulated marketing machine inevitably breaks through.
However, gambling schemes today exist on a much broader spectrum than many might believe:
Many video games have utilised a formula of micro-transactions and in-game assets that thus far has largely gone unregulated, exposing young people to gambling behaviour that is often perpetuated by influencers as well.
The stock exchange has seen a rise in irrationally aggressive and risky investor behaviour akin to gambling, with this behaviour often being glorified in large online spaces (such as Reddit’s ‘r/wallstreetbets’ community).
Volatile alternatives to the stock market, such as ‘meme coin’ pump-and-dump schemes, have also diminished responsible financial decision-making.
Even major elections have found themselves caught up in this rise of gambling culture, with the Kalshi prediction market offering money lines on just about every major event that we as a society watch and engage with every day.
The simple reason for this growth is that gambling schemes are extremely profitable, particularly those that exist in spaces where Government regulation continues to lag. Major businesses have taken care to exert significant control over social attitudes toward gambling, compounding this growth going forward. The consequence is that even if people still as a baseline appreciate that gambling is ‘bad’, they are conditioned to its existence (without sufficient education of what gambling now often looks like) to such a degree that it now is able to thrive in new markets, without adequate scrutiny.
C Harm: Tangible Costs of Widespread Gambling
It is likely true that society is largely willing to accept gambling because its deeper consequences are often less obvious and immediate than for other vices (such as alcohol and drug use). More accurately, the real problems with gambling are not based on abstract morals, nor do they exist in a vacuum of general ‘harm’.
For individuals that suffer from gambling use disorder, the hole they find themselves in can get very deep very quickly. Continued gambling as a way out of their situation sees the accumulation of stress and hopelessness, wherein they become increasingly isolated from those around them. Particularly given the social acceptance of casual gambling, and that people might not be honest about their degree of involvement, it can be quite difficult for others to realise that those they know have developed a problem, and thus to address it. These people and their loved ones are the primary victims of this industry.
For society as a whole, widespread gambling amounts to a severe decline in productivity, financial literacy and public health, whilst exacerbating other problems like wealth inequality and various criminal behaviours. Nonetheless, many people are able to maintain what they perceive to be a healthy relationship with gambling, but simultaneously may underestimate the loss to others. Subsequently, external intervention to better regulate the often understated and misunderstood effect of gambling is necessary, as responsibility to correct this sort of wider market failure tends to fall on the Government (rather than on individuals).
In essence, the cost of gambling is very real. For many, it is a vice that they can enjoy in small doses, perhaps even socially, and continue to happily live their life regardless of the result. However, the exception is a brutal and not-so-uncommon one, a depth of harm that cannot be overlooked.
III The Law
A The Gambling Act 2003
Our foundational piece of gambling legislation is the aptly named Gambling Act 2003. This Act’s purpose is controlling the spread of gambling, the spread of its harm, and the integrity and fairness of what is allowed via regulation. Effectively, rather than outright ban gambling, the Act permits some forms, tightly regulates others, and prohibits the rest.
In practice, this is done through establishing ‘classes’ of gambling, based on its different forms and the stakes involved, with gambling in higher classes being more thoroughly regulated (although even things like sales promotions fall under the Act’s scope). Notably, much of the specific sections of the Act pertain to casinos, placing often stricter obligations on them than other outlets for gambling, reflecting the sentiment that these establishments pose the greatest risks to the community. For most of its existence, the Act has been largely effective in achieving these purposes, particularly through a social welfare lens. Heavy licensing restrictions have in large part contained the physical spread of casinos and made subsequent regulation of their activities much easier. Furthermore, the Act features extensive requirements around proceeds redistribution, helping to counterbalance the aforementioned community harm.
Nonetheless, the Act is largely unresponsive to, and passively omits, an increasingly prevalent outlet for gambling: online, international channels. The Act’s simple approach makes it unlawful to operate remote gambling from within NZ without authority (s 9), but it does not criminalise NZ residents who participate in offshore online gambling, nor does it establish a licensing regime for overseas operators offering their services. Parliament’s assessment was that offshore internet gambling was difficult to police and better left largely outside the scope of the enforced domestic regulatory framework. This remains true, but as the landscape of gambling has shifted drastically since, this gap in consumer protection, harm minimisation, and revenue oversight has only worsened.
Overlapping with the Gambling Act is the Racing Industry Act 2020, which specifically targets sports and racing betting as opposed to other forms of gambling. In June of 2025, an Amendment Act was passed seeking to address the previously discussed problems of online, overseas competition, by explicitly prohibiting entities other than the TAB from offering bets on such events (see section 74AAA). This effectively writes a TAB monopoly (an increasingly difficult position to consolidate) into law, a clear pivot from the aging containment and toleration driven approach still seen in the Gambling Act. The key consequence of this is that we currently reside in a fractured legal landscape, treating different forms of gambling (that often result in similar consequences and are accessed through similar online channels) in drastically different ways.
B The Online Casino Gambling Act 2026
The apparent gap in the law around online gambling was the catalyst for recent legislative efforts around sports betting. The recent Online Casino Gambling Act 2026 attempts to close the biggest hole in this system of law by bringing online casino gambling into domestic regulation.
Having first been introduced to Parliament in June of 2025, the Act, which passed its third reading in April and came into effect on May 1st of this year, does the following:
It established a licensing regime for online casino gambling, requiring operators to hold a NZ licence in order to legally offer casino-style games (such as online slots and table games) to people located in NZ.
Simultaneously, the Act prohibits unlicensed operators from targeting the NZ market (including through advertising or inducements) and enables enforcement action against operators who offer online casino gambling to NZers without authorisation.
Licensing under the Act is subject to a 3-stage procedure, which requires information around aspects of an applicant's operational approach, such as advertising and harm minimisation strategies. A hard cap of 15 licences is built into the legislation, and competitiveness and protectionist considerations also play into decision-making.
Advertising towards minors is generally prohibited, albeit other aspects of advertising strategy are to be considered as per this licensing procedure. Much of the nuance of a harm reduction approach on the Government’s part is missing from the Act, favouring discretion within the scope of broad statutory considerations.
Financially, the NZ Government will charge licence holders a percentage on their revenue from NZ, and be able to fine businesses for non-compliance. Whilst the proposed Bill was initially criticised for its silence on proceeds redistribution to the community (a prominent feature of the Gambling Act 2003), this was addressed in its second reading through increasing the percentage taken from revenue for this specific purpose.
In a sense, this Act restores coherence by ensuring that all major gambling modalities are now regulated under NZ law, rather than some being effectively ignored because they happen online. However, it does not unify gambling legislation under a single philosophy. Specifically, the idea that overseas operators can seek licensing, and that the Government is open to issuing said licences, gives these operators both legal legitimacy and practical access to the market. Compare this to the Government’s sports-betting monopoly created by the 2025 amendment to the Racing Industry Act, and to the more definitively restrictive provisions on the operation of casinos under the Gambling Act as it stands.
At present, we are in a transitional, grandfathering period, where existing providers that would otherwise be made illegal if unlicensed are being allowed to continue operations until December. This is a particularly important period to look at the scope of gambling in NZ and how the Government will address this going forward.
IV Evaluation
A Necessity: Action in the Online Space
In a general sense, the Online Casino Gambling Act is necessary because, as this article points out, the landscape of gambling has changed drastically. Provisions such as section 16 of the Gambling Act, barring overseas gambling advertisements being “published” in NZ, have not remotely accounted for how often we are exposed to international advertising anyway (such as for online casinos via platforms like YouTube). Even if the Government’s ongoing development of our approach appears flawed, development is necessary. The Act is at least a step away from the preexisting alternative, being a largely unregulated and widely accessible online market.
Inherently though, how gambling exists within and affects our society is already a matter with very uncertain tradeoffs, making Government policy not-so-straightforward. Nonetheless, there are a number of problems that our legislative approach to gambling presents that need to be addressed. Prominently, there is an ongoing need for real, practical responses to digital innovation, stricter enforcement of age restrictions, and controlled advertising.
This is not always so much a problem of the legislation itself, but in how effectively it can be enacted (as with section 16 of the Gambling Act). This problem is compounded by the exposure to promotion at a very young age, something particularly difficult to contain when dealing with a globalised, online industry. Survey data from 2023/2024 showed that overseas online gambling was most prominent amongst men aged between 15 and 24, disproportionately engaged in by Māori and Pacific peoples over other groups, and typically manifested as moderate to high-risk gambling behaviour. Comparatively, NZ-based gambling from the same survey was least prominent amongst younger NZers, relatively evenly distributed amongst different ethnic groups, and often non-problem or low-risk gambling.
One underlying issue may be the uncontained access to the internet that is increasingly commonplace for youth. Given the exponential variety of ways in which gambling takes place on digital platforms, continuous adaptation is even more of a necessity than for more statically regulated problems, such as alcohol, in communities. In essence, online gambling is a new issue that preexisting social norms against gambling clearly do not operate on, particularly in the minds of young and vulnerable users.
The counter to this culture of accessibility, albeit obviously difficult to achieve, is a push towards denormalisation, enacting practical measures alongside legislative restrictions. That looks like proactive tackling of gambling as a public health issue, widespread Government-sponsored PSAs (much in the way that NZ has approached driving safety), and better funding of community programs and services. Safer Gambling Aotearoa, a Te Whatu Ora initiative, is a good start in this direction, emphasising the need for transparency, preemptive assessment and engagement, and active intervention as ways to control gambling harms. However, expanding its targets and services to address a broader landscape of issues may be necessary to constrain the aggressive growth of modern gambling.
B Oversight: The TAB’s Troublesome Monopoly
State-sponsored monopolisation, as we see with the TAB, is not an inherently effective means to control the negative externalities of this market. This is not just speculative, but instead a direct criticism of how the TAB is owned and operated. Since 2023, the business operations of the TAB have been run by the UK monolith Entain, as part of a 25-year-deal that effectively means that the Government has already ceded much of its power away to the private sector. This deal becomes even more problematic given Entain’s commitment to pay an additional $100 million into the NZ sporting codes if the Government were to pass legislation enforcing the TAB’s monopoly, a very direct, explicit instance of government lobbying. This payment has since been performed following the Racing Industry Amendment Act 2025.
The Government’s rationale behind this deal is that it will allow NZ racing to survive and flourish, as much as it will enable the TAB to stay afloat. However, this elicits a number of criticisms, particularly given that the Government has simultaneously contended that its 2025 Amendment will increase Government oversight (when the Entain deal that preceded it serves to relinquish this degree of control). Entain itself as a company also has a problematic reputation to say the least, as in 2022 it was charged what was (at the time) a record fine dealt out by the UK Gambling Commission of £17 million for failing to meet gambling safety law requirements. The other key part of the rationale for this monopolisation is that it shifts revenue from bettors using overseas platforms back into NZ, but looking at the full picture, the trade-off is that half of all gross revenue will go directly to Entain for a number of years.
Overachingly, the TAB’s monopolisation (and the deal that preceded it) is incredibly short-sighted:
It chooses short-term cash injections over long-term control.
It keeps a racing industry afloat that has declined simply because people don’t find it that interesting, an industry historically close to gambling that is controversial for its internal practices (as highlighted by the welfare-driven legislative battle to end greyhound racing).
It risks a sustained loss of revenue into the sporting codes that the TAB would previously have given most of its earnings back to, as the deal does not guarantee any minimum repayment to the TAB past the first 5 years.
It inherently supports the growth of gambling given that continued access to gambling revenues for NZ relies on Entain meaningfully boosting its commercial presence and performance.
Even worse still, this whole ordeal indicates quite shockingly that legislation in this country can be bought by a massive, foreign corporation.
In spite of all these issues, the Government must make due on its promises of oversight. When the TAB does things like branch out into its affiliate brand ‘betcha’ (a platform explicitly targeting young adults with its marketing) it is being allowed to engage in the sort of commercial pursuits that a Government-owned monopoly is meant to safeguard against. Entain and the Government have advocated that it is better that such bets take place via a domestic company with harm minimisation practices in place. However, the proportion of money allocated to these practices appears jarringly low (just $5 million of the initial $900 million agreement proposed), and the practices themselves are largely untransparent (particularly in terms of how these will be maintained as gambling ramps up going forward). It is up to the Government to step up to protect bettors and ensure that the growth gains facilitated by Entain actually stand to benefit NZ locally.
C Firmness: Choosing Hard-Line over Soft-Line Regulation
State regulation should not solely be focused on broadening itself, if the blanket it covers the market in is a soft one (signalling passive acceptance of the rise in gambling). This is what the Online Casino Gambling Act risks doing, as it is fair to be sceptical of how Government discretion will be used and how effective its efforts to regulate will prove in practice. This risk is made more concerning when you look at the clear Government incentive in favour of lightly regulated but widespread gambling, being that it is such a massive source of tax revenue. This has been a massive source of gambling’s rise across the United States in spite of broad state regulatory schemes. Of course, tax revenue can go towards a number of very positive things in our society, but regulators tread a fine line between taxing a large gambling industry and restricting the welfare loss it accrues.
The problem is that the math of tax revenue for harm reduction does not account for the irreversible regulation difficulties and uphill battle against community harm created by allowing multiple large and mostly unfamiliar entities into the market. At that point, they become harder to contain (such as with advertising restrictions and the difficulty of regulating numerous businesses), but also benefit from licensing's signalling effect of legitimacy (both legally and socially). When tax revenue piles up (supported by gambling industry growth), it becomes even more difficult to persuade legislators to send out signals to the contrary (even over election cycles, given the difficulty of cutting down growing new industry in the economy).
Importantly, the consequences of a relatively free market are severe, and 15 businesses spread across a relatively small NZ industryis arguably a sizable amount. Much in the way that targeted advertising already preys on the most vulnerable consumer for an array of products, the way in which gambling companies maximise profit is to entrap users in their scheme. The presence of competition only amplifies the need to do so, through more extensive use of promotions such as first-time user deals, special parlays, and VIP status bonuses. Even if these can be contained, economics tells us that it is hard to reduce demand for well-established ‘bad’ activities, such as cigarettes, once it has been popularised amongst consumers. This is particularly an issue where additive properties of that product are exploited, and the popularity of online gambling amongst young NZers raises similar concerns to the rise of vaping amongst youth seen in recent years.
Therefore, simply put, more than the minimum (i.e. taxation) is required, when it comes to licensing schemes and regulatory mechanisms to support them. Preemption must underline any legislation that seeks to invite in more gambling, or we risk losing the capacity for regulatory control. In fairness, the Online Casino Gambling Act attempts to be preemptive with its licensing scheme, but even greater scrutiny is required when we are enabling gambling to exist prominently in NZ its most accessible forms. The Act’s general philosophy is clearly less restrictive than the preceding Gambling Act as well. Overall, it remains to be seen in practice how willing and able the Government will be in using its discretion, both in terms of licensing and subsequent enforcement of the law, to restrain this dangerous market.
Licences under the Online Casino Gambling Act are yet to be applied for and issued. The proposed timeline would involve the price being set via auction in a way that innately favours big international companies that can price out less large-scale, profit-making competition. These are the sorts of companies that can afford the best lawyers, produce the best harm-reduction and other Government-appeasing proposals, and are the most experienced in growing gambling overseas (via large advertising budgets, industry expansion plans, lobbying, etc.). These are actors that, if not kept in check at first instance and thereafter, pose a massive risk to NZers in future. The recently published minimum standards for applicants are a good start, where a significant compliance burden likely nullifies and rules out the most pernicious applicants, but the effect of this in practice and in the long-term remains to be seen.
V Conclusion
Gambling itself will never be a good thing. Unfortunately, gambling is also something society generally must learn to live with. It is a concentrated form of the joy we experience with each and every decision we make, and yet compounds the destructive consequences we might then face.
Collectively, passive acceptance of widespread gambling or the fiscal benefits of its growth is not enough to save people from its trap and risks enabling their self-destruction. More is always needed, both in the way of recognition of the problems gambling poses and counter-measures to address those problems directly.
This article does not hold all the answers to the perfect gambling legal scheme, nor does it necessarily contend that we are heading in the wrong direction. However, it does forewarn that we collectively sit at a crossroads, and our decisions now will determine how well the Government can combat evolving gambling harm going forward. The best choice is a proactive one: One that balances cautiousness with decisiveness, one that effectively mediates society’s relationship with its great vice, and one that does not leave behind or trample over those who suffer so immensely.
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Note that this article is very conscious of the fact that gambling continues to cause, and always will cause, considerable harm to people here and around the world. This harm cannot possibly be overstated, yet often does not reveal itself as clearly as we might want it to. If you or someone you know is struggling with their relationship with gambling, do not be afraid to take that first step of reaching out.
The Gambling Helpline is available 24 hours a day, 7 days a week.
Phone 0800 654 655 or text to 8006.