Offshore operators facing lawsuit allowed to apply for New Zealand license

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The Backstory

A regulated market built from an offshore reality

New Zealand’s decision to let existing offshore gambling operators seek online casino licenses reflects the central tension behind its new regime: The government is trying to regulate a market that already exists rather than build one from scratch. For years, New Zealanders have been able to access overseas casino sites, while domestic law provided limited tools to supervise those operators, set player-protection standards or require local economic contributions.

The Online Casino Gambling Act 2026 is intended to change that by creating a capped licensing system, with the Department of Internal Affairs overseeing operators that want to legally serve New Zealand customers. The government has framed the policy as a channeling strategy, seeking to move players from a broad offshore market into a smaller group of supervised platforms. That approach explains why officials are not automatically excluding companies that have previously operated offshore or are now defending legal claims. The alternative would risk leaving major existing operators outside the regulated perimeter, where enforcement may be harder and consumers could remain exposed to unlicensed sites.

The model also creates political and legal risk. Allowing companies facing allegations over past conduct to compete for licenses could draw criticism from consumer advocates and plaintiffs. But excluding them by ministerial discretion would raise questions about due process and the integrity of the licensing framework. Internal Affairs Minister Brooke van Velden has signaled that suitability assessments, not political intervention, will determine who proceeds.

Lawsuits raised the stakes before licensing began

The licensing debate has been sharpened by litigation in Auckland. As previously reported, three class-action lawsuits were filed against Super Group, Bet365 and SkyCity Entertainment Group, along with SkyCity’s overseas partner, alleging they offered unlawful offshore casino services to New Zealand players. The claims relate to alleged losses from February 2020 through this February and include accusations of unconscionable conduct, aggressive marketing and restrictive withdrawal practices.

The cases put a spotlight on the legal gray area that has characterized New Zealand’s online casino market. Offshore sites have been accessible to local players, but the absence of a dedicated domestic licensing system meant enforcement questions were often complicated by jurisdiction, corporate structure and where the relevant platforms were based. Bet365 has reportedly disputed the jurisdiction of New Zealand courts, arguing domestic judges lack authority over its offshore network. SkyCity has said it intends to vigorously defend the proceedings.

Those lawsuits now sit alongside the government’s move toward legalization. That timing matters. Plaintiffs are seeking accountability for alleged past conduct, while regulators are designing a prospective framework for market entry. The two processes may influence one another reputationally, but they are not the same legal test. A company could contest civil claims while still attempting to show regulators it is suitable to operate under the new law. Conversely, unresolved litigation could weigh on a suitability review if regulators view allegations, compliance history or consumer treatment as material to licensing.

From first reading to a capped license auction

The current licensing rules trace back to legislation that cleared its first parliamentary hurdle with a promise to impose oversight on a market that had been legal for consumers to access but largely unregulated from New Zealand. The bill proposed up to 15 online casino licenses, age verification requirements, harm-minimization obligations, advertising restrictions and mandatory contributions to the Problem Gambling Levy.

The first-reading debate established the government’s core policy rationale: New Zealanders were already gambling online, so the state needed a mechanism to make that activity safer and more accountable. The legislation was not presented as an effort to expand gambling demand. Instead, it was designed to place conditions on operators seeking legal access to the market and to recover regulatory costs through fees.

The bill later passed its final parliamentary reading, giving the Department of Internal Affairs broad enforcement authority over online casinos, including offshore-based operators. The law allows take-down notices, formal warnings and fines that can reach NZ$5 million for serious or repeated breaches. It also requires licensed operators to pay tax in New Zealand, with part of the resulting revenue directed toward sports and community purposes.

The cap of 15 licenses is one of the most consequential design choices. It creates scarcity, potentially raising the value of market access and encouraging operators to invest in compliance. But it also means regulators must decide which companies can compete for licenses and, ultimately, which will be permitted to serve customers. Officials have said applicants must pass suitability checks before moving to an auction process, making probity a gatekeeping issue rather than a post-award formality.

SkyCity’s local advantage meets offshore scrutiny

SkyCity illustrates the complexity of the transition. The company is New Zealand’s dominant land-based casino operator, with properties in Auckland, Hamilton and Queenstown. It has also operated SkyCity Online Casino through a Malta license. Earlier this year, the company identified a New Zealand online casino license as a strategic priority and said it wanted operational readiness for a “Day 1 launch” once the regulated market opens.

That positioning gives SkyCity potential advantages. It has domestic brand recognition, physical assets and existing customer relationships. It has also emphasized localized marketing, host responsibility, a single customer view and links between online and land-based operations. In a market where officials want to channel players toward supervised brands, those attributes could be important.

At the same time, SkyCity’s inclusion in the class-action litigation complicates the optics. A local champion strategy may appeal commercially and politically, but regulators will still need to assess conduct, governance and compliance history. The same applies to international operators such as Bet365 and Super Group. Their scale, technology and existing customer bases may make them strong applicants, but their past activity in an unregulated environment will be examined against the new standards.

Enforcement line shifts on Dec. 1

The government’s approach draws a line between the pre-regulation period and the post-licensing market. Officials have said offshore operators previously worked in an unregulated environment and were not necessarily breaching specific New Zealand laws merely by being accessible to local players. Once the new regime starts, that ambiguity narrows. Operators without a license will be expected to exit the market by Dec. 1.

That deadline is the practical force behind the law. It turns licensing from a commercial opportunity into a market-access requirement. Operators that win licenses can advertise and serve customers under a domestic framework, subject to harm-prevention rules, tax obligations and consumer protections. Those that fail or choose not to apply face enforcement risk and the loss of New Zealand revenue.

The stakes extend beyond New Zealand. Other jurisdictions are grappling with how to regulate digital gambling products that cross borders, often faster than national laws can adapt. In the U.S., the conflict between state gambling regulators and federally regulated prediction markets has produced litigation, including a Nevada case in which the Nevada Resort Association was allowed to intervene in Kalshi’s lawsuit. While the products and legal frameworks differ, the underlying issue is similar: Regulators are defending the boundary between licensed gambling systems and adjacent or offshore models that claim different legal treatment.

New Zealand’s system is therefore both a legalization measure and a containment strategy. By allowing offshore operators, including those under legal challenge, to apply, the government is prioritizing regulatory capture of the existing market. The success of that strategy will depend on whether suitability reviews are rigorous enough to command public confidence and whether enforcement is strong enough to push unlicensed operators out after the transition period ends.