New Zealand bans AI celebrity online casino endorsements

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The Backstory

Licensing push meets a fast-moving ad market

New Zealand’s ban on AI-generated celebrity endorsements in online casino advertising is the latest sign that officials are trying to build a regulated igaming market while closing gaps that offshore operators, affiliates and fraudsters have used for years. The measure arrives as the government prepares to license online casino companies under a framework that would legalize a sector long accessed by New Zealanders through offshore websites.

The immediate target is synthetic advertising that uses the likenesses of well-known people without consent, including deepfakes and AI-generated influencers. But the rule also reflects a broader concern: once licensed operators are allowed to advertise, the government will need clear boundaries to prevent legal marketing from accelerating gambling harm or enabling consumer deception. The Department of Internal Affairs has already warned about fake gambling sites using bonuses or free spins to harvest personal information or commit credit card fraud, placing AI endorsements within a wider enforcement challenge.

The backdrop is a policy shift that began with the government’s decision to move online casino gambling from a largely offshore gray market into a licensed system. In July, ministers introduced the Online Casino Gambling Bill to Parliament, setting up an auction for as many as 15 licenses and fines of up to NZ$5 million for unlicensed operators that continue serving New Zealand residents.

From prohibition to a controlled market

New Zealand has permitted sports betting since 2003, but online casino gambling has remained prohibited domestically. That distinction did not stop consumers from playing casino games online. It pushed much of the activity to offshore companies operating outside local licensing, tax and harm-minimization systems.

Internal Affairs Minister Brooke van Velden has framed the new regime as a consumer-protection and tax-collection exercise rather than a plan to grow gambling. The government’s argument is that a limited number of licensed platforms can be held to local standards, while companies that fail to win approval can be forced out. That premise explains why the new advertising rules matter: once licenses are issued, approved operators will gain a lawful route to reach customers, but under restrictions intended to prevent misleading or high-risk promotions.

The government has also made clear that licensing is not a blanket endorsement of all current market participants. A suitability assessment will precede the auction process, but the regime is designed to evaluate applicants under defined rules rather than exclude whole categories of companies by political decision. That approach became clear when officials said offshore operators facing lawsuits could still apply for New Zealand licenses, including companies named in a High Court class action.

The practical effect is a sharp transition. Companies that may have built brand awareness in New Zealand before regulation will have a chance to compete for licenses, but those that fail will be expected to leave the market. Officials have said unlicensed operators must stop serving New Zealand residents by Dec. 1, creating both a commercial deadline and an enforcement test.

Advertising enforcement set the stage

Before the AI endorsement ban, regulators had already been tightening control over gambling advertising aimed at New Zealanders. The Gambling Act 2003 prohibits promotion of offshore gambling services in the country, and the Department of Internal Affairs has used that authority to issue formal notices against operators active in local media and online channels.

One high-profile example came when the department ordered LeoVegas to stop advertising in New Zealand, saying the Malta-licensed operator had breached the advertising ban. LeoVegas was the fourth operator since 2023 to receive such a notice, following 22Bet, Jackpot City and 20Bet. Officials also targeted social media promotions, issuing infringement notices to Spinbet and fines to influencers who promoted gambling content.

Those cases showed that advertising had become one of the main pressure points in New Zealand’s offshore gambling market. Operators could be based abroad, servers could sit outside the country and payments could flow through international channels, but marketing often appeared in places regulators could monitor: local websites, social platforms, sponsorship arrangements and influencer feeds.

AI-generated endorsements complicate that enforcement model. A deepfake celebrity ad can be produced quickly, circulated across platforms and stripped of clear links to an identifiable licensed operator. It can also exploit public trust in broadcasters, athletes or entertainers to make a gambling product appear legitimate. By banning celebrity endorsements, including synthetic versions, regulators are trying to remove a category of promotion that could blur the line between licensed advertising, scam content and unauthorized brand use.

Industry fight over who gets in

The licensing model has divided existing gambling interests. SkyCity Entertainment Group, which operates three casinos in New Zealand and one in Australia, has argued that the government should issue far fewer online casino licenses than planned. The company has called for the market to be limited to five licenses and said those should be restricted to local New Zealand companies.

SkyCity’s position reflects the commercial stakes of the new regime. A 15-license market could allow major international operators to compete directly for New Zealand customers under domestic approval. A smaller pool, especially one reserved for local firms, would protect incumbent brands and potentially keep more profits onshore. The TAB has raised similar concerns, warning that multinational operators could dominate the online casino sector and threaten existing funding streams for racing and sport.

Van Velden has resisted preferences for domestic operators, saying the government’s role is to create a fair regulated market rather than protect established companies. She has also warned that favoring local firms could conflict with New Zealand’s free trade obligations. That position makes the auction more open, but it also increases the importance of strong advertising and harm-minimization rules because international operators may bring large marketing budgets and sophisticated acquisition tools.

The AI endorsement ban therefore sits at the intersection of competition policy and consumer protection. If New Zealand allows global gambling brands to bid for licenses, it must also decide how aggressively those brands can use digital advertising to gain market share. Celebrity and AI likeness restrictions are one way to limit promotional tactics before the market opens fully.

Tax and community funding reshaped the bill

The government has also revised the financial architecture of the bill in response to criticism that online gambling regulation did not sufficiently preserve New Zealand’s community-benefit principle. Under amendments announced after public feedback, the offshore gambling tax would rise from 12% to 16%, with the additional 4% directed to community funding.

That change, detailed when New Zealand raised the tax in the online gambling bill to support community groups, was designed to ensure local sports clubs, community organizations and grassroots groups receive a share of revenue generated from regulated online casino activity. It also created a new policy question: whether online casino revenue will supplement or disrupt existing gambling-based funding from Class 4 gaming, Lotto and TAB sources.

The government has promised a two-year review after implementation to assess the effect of the new system. That review will matter because the online casino market could change consumer behavior, redirect gambling spending and alter the economics of community funding. If online products cannibalize other gambling channels, the additional tax may not translate into a simple net gain for community groups.

Advertising rules are linked to that fiscal structure. More aggressive marketing could increase taxable revenue, but it could also increase harm, political backlash and pressure on support services. By restricting celebrity endorsements and AI-generated likenesses, officials are signaling that revenue collection will not be allowed to override consumer-protection objectives.

The next test is enforcement

The coming licensing process will determine whether New Zealand can convert a fragmented offshore market into a controlled domestic regime. The government plans to award a limited number of licenses, require suitability checks and impose fines on unlicensed operators. But the effectiveness of the system will depend on whether regulators can police companies outside New Zealand, track digital advertising and distinguish licensed promotions from scams.

The AI endorsement ban gives regulators a clearer basis to act against one fast-growing form of misleading marketing. It also gives licensed operators notice that compliance will extend beyond payment rules and responsible gambling tools to the way they acquire customers. In a market where trust, celebrity and social media can quickly influence consumer choices, that boundary may be central to the credibility of the entire regime.

New Zealand’s online casino overhaul is therefore not just a licensing exercise. It is an attempt to legalize access, collect tax, fund community groups and reduce harm while preventing offshore or fraudulent actors from shaping the market before regulators can. The ban on AI celebrity endorsements is a narrow rule, but it reflects the larger challenge facing the government: building a legal gambling market without letting digital promotion outrun the safeguards meant to justify it.