Potential legislation in New Zealand to license and regulate online casinos, specifically the Online Casino Gambling Bill introduced in June 2025, could have significant effects on the Class 4 gaming industry (pokies in pubs and clubs) and, by extension, on funding for community organisations such as football clubs.

Key points of the proposed legislation:

• The Bill will create a controlled licensing regime for up to 15 domestic online casino operators, aiming to bring offshore gambling revenue back under New Zealand regulation.
• Licensed operators will be able to advertise (with restrictions), and unlicensed operators will face substantial penalties.
• The Bill prioritises harm minimisation, consumer protection, and tax collection.

Impact on the Class 4 Gaming Industry

Class 4 gambling is currently a major source of community funding in New Zealand, with about $260 million per year distributed to local organisations such as sports clubs, kindergartens, and other community groups. Class 4 societies are required to return at least 40% of their gross proceeds (after GST) to authorised community purposes.

Potential impacts from the new online casino legislation include:

• Diversion of Gambling Expenditure: If regulated online casinos become more accessible and attractive, there is a risk that gambling expenditure could shift away from physical Class 4 venues to online platforms. This could reduce the gross proceeds available to Class 4 societies, thereby lowering the amount of funding available for community grants.
• Impact on Community Funding: Since Class 4 is unique in its direct, localised community funding model, any reduction in proceeds could disproportionately affect small, local organisations that rely on these grants. Other forms of gambling (like lotteries) tend to distribute funds on a more national or regional basis, so a decrease in Class 4 funding could mean less support for grassroots groups.
• Regulatory and Market Uncertainty: The Bill does not yet specify whether online casino operators will be required to contribute a portion of their revenue to community funding in the same way as Class 4 operators. If online operators are not subject to similar community return obligations, the overall pool of funds available to community organisations could decline, even if the government collects more tax revenue.
• Potential for New Funding Models: The government may consider imposing community funding requirements on online casino licensees, but this is not yet confirmed in the available details of the Bill. The select committee process may address this issue, and community groups will have an opportunity to make submissions.

In summary: The introduction of regulated online casinos could reduce the funding available to community organisations if gambling expenditure shifts online and if online operators are not required to make similar community contributions as Class 4 operators. The final impact will depend on the detailed regulations developed as the Bill proceeds through Parliament, particularly whether community funding obligations are imposed on online casino licensees. Community organisations and stakeholders are encouraged to participate in the select committee process to advocate for the protection of local funding streams.

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Article added: Tuesday 15 July 2025