New Zealand’s eSports industry has grown rapidly, fueled by a rising gamer base, popular streaming platforms like Twitch and YouTube, and advancements in technology. Organizations such as the New Zealand eSports Federation (NZESF) and the New Zealand High School eSports League have noted significant growth in youth participation. According to NZTech, the gaming sector, including eSports, contributed about NZD 276 million to the economy in 2022, showing a 34% growth since 2017. Additionally, a 2021 survey by the Interactive Games & Entertainment Association (IGEA) found that over 73% of New Zealanders participate in gaming, suggesting a solid foundation for eSports expansion. However, legal ambiguity around betting and sponsorships remains a challenge as current gambling laws have yet to fully adapt to eSports’ unique needs.
eSports Growth in NZ
New Zealand’s eSports market is expanding steadily in 2024, with initiatives like the NZ Esports Hyperfibre League, which broadcasts popular game titles and grand finals on SKY TV, fostering a strong local eSports community. New Zealand’s involvement in the Esports Integrity Commission (ESIC) further supports this growth. Key partnerships, such as SKYCITY and Let’s Play Live (LPL), have developed a high-tech broadcasting studio, elevating local players’ visibility on global platforms.
Investments in the eSports sector is significant, including the NZ Esports Community Fund, which provided $10,000 for youth programs and community support from 2022 to 2023. These funds support local talent development, international competitions, and scholarships, attracting gamers, fans, and investors. Enhanced by 5G rollout, mobile eSports accessibility is also growing. However, a clear regulatory framework is still essential to attract betting firms and sponsorships to solidify New Zealand’s position as an eSports hub in the Asia-Pacific region.
New Zealand’s Gambling Law
New Zealand’s gambling is primarily governed by the Gambling Act 2003, which aims to minimize harm and regulate revenue distribution. Managed by the Department of Internal Affairs (DIA), the Act allows recreational gambling within licensed frameworks while focusing on preventing social harm. For instance, Class 4 gaming machines, located outside of casinos, generated around NZD 987 million in gambling profits in 2022, with a significant portion distributed to community organizations.
However, the rise of online gambling via offshore providers remains outside New Zealand’s jurisdiction, creating potential revenue and regulatory gaps. While traditional gambling forms like casinos, lotteries, and sports betting are legally permitted, eSports betting occupies a more ambiguous space under current regulations. This ambiguity has resulted in increased scrutiny, making it challenging for stakeholders in the eSports ecosystem to navigate legal hurdles and expand betting options for their audiences.
Regulatory Challenges in eSports Betting
In New Zealand, eSports betting faces unique regulatory challenges under the Gambling Act. Unlike traditional sports betting, which is regulated by approved providers like the TAB, eSports lacks clear classification, complicating its legal oversight. In 2023, the government introduced the Offshore Gambling Duty, imposing a 12% tax on offshore platforms targeting New Zealanders. Combined with the GST, this creates a 25% tax burden for some operators, establishing a more controlled eSports betting environment.
To operate legally, betting platforms must secure a New Zealand gambling license, which ensures consumer trust and supports responsible gaming. However, obtaining this license is rigorous, requiring operators to adhere to fairness standards and meet New Zealand’s social responsibility goals. With the eSports betting market projected to grow at a 6.32% CAGR, reaching $13.6 million by 2028, demand for licensed, structured platforms is evident.
Adopting regulatory insights from countries like the United Kingdom, where the Gambling Commission has defined eSports betting standards, could benefit New Zealand. By balancing industry growth with consumer protection, New Zealand can develop a regulatory model that promotes sustainable growth in its eSports industry.
The Future
As the global eSports industry grows, New Zealand has the chance to shape its regulatory landscape. By 2026, a regulated licensing system is planned for online casinos, which will include the new NZ casino license. Announced by Minister of Internal Affairs Brooke van Velden, this initiative aims to protect consumers and increase government revenue through gambling taxes. The government will auction a limited number of three-year NZ casino licenses, requiring strict compliance to prioritize responsible gambling. These licenses will make unlicensed operators serving New Zealand illegal, complemented by advertising restrictions and a ban on online casino sponsorships to mitigate risks from offshore platforms.
Updating the Gambling Act to explicitly include eSports betting could provide operators with essential guidelines and encourage more betting companies to enter the market. However, addressing issues like gambling addiction and youth exposure remains essential, with targeted measures such as age restrictions and responsible advertising practices. Establishing a solid regulatory framework is key to protecting vulnerable populations while fostering industry growth.
Currently, New Zealand’s gambling laws impact the eSports industry, especially in betting. The Gambling Act 2003 does not clearly define eSports betting, posing entry challenges for operators. With the upcoming release of the first ever NZ casino license, operators will gain an unprecedented opportunity to enter the market under clear regulations. With a clear framework, New Zealand could become a leader in global eSports betting, promoting growth through responsible practices that support an evolving eSports landscape.