New Zealand to introduce 4% GGR community funding guarantee as part of iGaming bill

New Zealand is preparing to bake a community funding guarantee into its new Online Casino Gambling Bill, committing future licensed iGaming operators to contribute 4 per cent of gross gaming revenue (GGR) toward community and sports initiatives. The measure is designed to offset fears that the shift to regulated online gambling could erode long-standing funding streams generated by land-based venues.

Cabinet papers dated 28th November confirm the government’s intention to ringfence a portion of licensed operators’ GGR, with projected first-year returns of NZ$10 million to NZ$20 million once the market goes live. Under the proposal, the guarantee would come into effect on 1st January 2027, signalling a possible delay from the previously anticipated July 2026 launch.

Community returns: a cornerstone of local funding

New Zealand’s community funding model has historically relied on revenue from land-based gambling- particularly pokie machines operated under the Class 4 regime. These funds support grassroots sports programmes, local clubs, cultural groups and social initiatives, including helping Special Olympics athletes cover travel for national events.

During the bill’s public consultation, more than 5,000 submissions were filed, with almost 4,000 specifically warning that legal iGaming could redirect players away from pokies, threatening community income.

Minister for Internal Affairs Brooke van Velden acknowledged these concerns, confirming that the bill will ensure a dedicated funding stream remains in place.

“New Zealanders want community returns from online gambling activity to ensure communities continue to get the funding they need,” she said. “Cabinet agreed to provide these returns and the committee supported that decision.”

The government will review the impact of online casino play on pokie-derived funding after two years and has proposed that the Lottery Grants Board administer the new community grants.

A delayed launch now likely

The ringfenced 4 per cent contribution taking effect from 1st January 2027 strongly suggests the iGaming market will not open mid-2026, as originally targeted. Legal experts had already warned the initial timeline was tight, given the scope of consultation and the extensive regulatory architecture being designed for the new market.

Under the bill, up to 15 iGaming licences will be offered. Operators will also be subject to:

• 12% offshore gambling duty
• Goods and services tax (GST)
• 1.24% mandatory levy on profits to fund gambling harm services
• Strict age-verification requirements
• Advertising limitations, including a ban on marketing to minors

Ms Van Velden stressed that harm minimisation remains the bill’s “first and foremost” objective, arguing that regulation will offer significantly greater protection than the current grey-market environment.

How does New Zealand’s approach compare internationally?

New Zealand’s decision places it among a small group of jurisdictions that ringfence online gambling revenue for community use – a practice more common in land-based sectors worldwide than in online licensing frameworks.

Across Europe, community-funding models vary widely:

• Finland (monopoly system): Veikkaus revenue is distributed directly to sports, culture, arts and social projects through government allocation. Although the monopoly will be partially dismantled in 2026, the funding mechanism is expected to stay.
• Norway (monopoly): Norsk Tipping maintains a similar social-funding mandate through earmarked profits for community programmes.
• Denmark: While not a ringfenced percentage of GGR, part of gambling revenue flows to cultural and sports initiatives through general taxation.
• UK: No statutory community funding tied to GGR exists. Instead, operators make voluntary contributions to RET (research, education and treatment), soon to become mandatory under upcoming reforms.
• Spain, Netherlands, Belgium: Gambling taxes are absorbed into the general budget; no iGaming-specific community return mechanism is in place.

Overall, New Zealand’s proposed structure is closer to Nordic monopoly-style social reinvestment than the liberalised systems common across the EU.

Does Malta have a similar system?

Malta does not operate a ringfenced community-funding model tied to GGR or operator revenue.
Instead:

• Remote gaming operators pay compliance contributions and corporate tax.
• These revenues form part of the central government budget but are not earmarked for sports or community initiatives.
• The Malta Gaming Authority allocates funds specifically for responsible gaming research and education, but this is distinct from New Zealand’s broader community return model.

Malta’s framework focuses on regulatory compliance, industry supervision, and player protection rather than community redistribution.

If passed, New Zealand’s bill will introduce one of the most structured community return mechanisms in any open iGaming market. The combination of strict harm-reduction safeguards and a guaranteed 4 per cent GGR community contribution sets it apart from most European frameworks – while also addressing local fears about the decline of pokie-derived funding.

With the legislative process now moving toward its next stages and implementation scheduled for 2027, New Zealand is positioning itself as a case study in how to integrate online gambling into social-funding ecosystems that were built around physical venues.

The coming year will determine whether this model becomes an international reference point – or a unique solution to a uniquely Kiwi concern.