Spat Over ‘Perverse Incentive’ for New Zealand’s Online Casino Licenses

_{New Zealand's Internal Affairs Minister Brooke van Velden defends the open licensing approach for online casinos. (Image: Australian Associated Press / Alamy)}

In a heated exchange regarding New Zealand's upcoming online casino regulations, Pokies boss Martin Cheer criticised the concerns of Internal Affairs Minister Brooke van Velden about community dependency on gambling-related grants.  

The minister said, "It creates a perverse incentive where we want to see gambling in our communities increase, because more money then flows back into the community, and that was not something I felt comfortable with under this law."  

Pokies boss Martin Cheer reacted to the comments from Brooke van Velden by saying: “You can't get any more perverse than sending your money off to some Russian-Croatian shareholder. Basically, it’s never seeing the light of day in New Zealand again. That's what I call perverse."   

The spat comes as foreign companies are set to dominate New Zealand's internet gambling market as the government auctions online casino licences for the first time. 

There are fears that foreign firms will dominate the market, undermining local operators who currently contribute all gambling profits to community grants. Current regulations do not require online casino operators to make similar contributions, contrasting with local pokies and lotteries. 

Speaking to Radio New Zealand (RNZ), Cheer said: "Effectively, in Class 4, 100% of all the profits have to be given away. Well, in this instance, none of it has to be given away.  

"So instead of the local ambulance service or coast guard or the local footy team getting some money, it's going to offshore shareholders." 

Both Sky City Casino and the TAB have expressed opposition to the government’s plans to auction 15 licenses, arguing that it will jeopardise local operations and community funding. They propose limiting licences to New Zealand-based casinos to protect revenue and minimise harm from gambling.  

Van Velden defended the open licensing approach, stating that allowing all applicants—including offshore companies—would create a fair market. 

She acknowledged the potential negative impact on community funding but emphasised her aim was to enhance the safety of online gambling rather than focus solely on revenue generation. Critics worry that the shift towards online gambling might drain funds from traditional local sources like the TAB and Lotto, adversely affecting community support services. 

The online casino licences will be issued for three years under the new regime, due to start in February 2026, which will regulate online gambling in New Zealand for the first time. 

Van Velden told RNZ: "I have considered whether or not it should be a domestic priority or an offshore priority. I think it's fair just to allow anybody to bid for one of the licences, rather than trying to say, Just because you're here and you've been established for years in New Zealand, you're necessarily a better operator."