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Gaming Sector Overview

Gaming opportunities

A wide range of gaming is now available in New Zealand. For example:

In addition to these licensed gaming activities, an estimated 700 - 800 Internet gaming sites operate world-wide. Our laws do not explicitly provide for New Zealand-based Internet gambling. New Zealanders can, however, gamble at overseas-based Internet sites from their home computers, can participate in overseas lotteries, and can gamble by phone or Internet through accounts established with overseas betting agencies.

Gaming participation

The five-yearly surveys of gaming participation undertaken by the Department of Internal Affairs suggest that:
  • in any given year, between 85% and 90% of the adult population (those aged 15 and over) participate, at least once, in one or more forms of gaming. This percentage has been stable over the last fifteen years
  • the proportion of the adult population participating at least once during the year in seven or more gaming activities has risen from 1% in 1985 to 10% in 2000
  • the proportion of the adult population playing non-casino gaming machines at least once declined from 28% in 1990 to 18% in 2000
  • the proportion of the adult population gambling at least once in a casino has risen sharply since casinos were introduced, from 5% in 1995 to 16% in 2000
  • the proportion of the adult population participating at least once in race betting has continued its gradual decline, from 25% in 1985 to 17% in 2000
  • sports betting, which has operated legally in New Zealand since July 1996, attracted about 8% of adults at least once in 2000
  • housie, which has always had a small but loyal following, has continued its slow decline in popularity, with only 4% of the adult population reporting participation at least once during 2000 compared with 8% in 1985.
At the same time the proportion of the adult population that believes there is a problem with people being heavily involved in gambling has risen (from 66% in 1985 to 87% in 2000), as has the percentage who believe there should be special help and support available for people who want to give up gambling (from 86% in 1985 to 98% in 2000).

The National Gambling Prevalence Survey undertaken in 1999 found that:
  • some 41% of those aged 18 and over participated in gaming at least weekly
  • over a third of the adult population played Lotto on a weekly basis
  • very few adults participated regularly (i.e. at least weekly) in any single form of gaming other than Lotto
  • a little over one quarter of the regular players (i.e. 10.5% of the adult population) participated regularly in continuous forms of gambling (and some of these also participated regularly in non-continuous forms)
  • the remaining regular players (just over 30% of the adult population) participated regularly only in non-continuous forms;
  • the percentage of regular continuous gamblers decreased from 18% of the adult population in the 1991 survey to 10.5% in 1999, while regular non-continuous gamblers remained steady at about 30%.

Gaming expenditure

In 1999/2000, turnover on the four main components of the gaming sector totalled NZ$8.4 billion (non-casino gaming machines NZ$3.7 billion; casinos NZ$2.9 billion; race and sports betting NZ$1.2 billion; and Lotteries Commission products NZ$0.6 billion). However, turnover is not the same as the amount spent on gaming because much of the gaming money "turned over" is actually given back to players as prizes. This is shown graphically in Diagram 1.

Diagram 1: Turnover, Prizes and Expenditure

Around NZ$1.3 billion was spent (i.e. lost by players) on gaming in 1999/2000. Diagram 2 shows the growth in the major components of gaming expenditure since 1988. Casinos and non-casino gaming machines are responsible for almost all the growth. Race and sports betting have been relatively static, while the amount spent on Lotteries Commission products has declined over the last 2 years.
Diagram 2: Gaming Expenditure ($millions)
In the year 2000 the main components of gaming expenditure were as follows:

  • NZ$450 million on non-casino gaming machines
  • NZ$343 million in casinos (on table games and casino gaming machines)
  • NZ$277 million on Lotteries Commission products and
  • NZ$227 million on race and sports betting.
Much smaller sums were spent on other forms of "community gaming", such as raffles and housie.
Our Diagram 2 is based on "nominal" dollars (i.e. "dollars of the day"). If we take account of inflation and population change, thus converting it to a "real per capita" basis, gaming expenditure rose at an average annual rate of about 8.5 % per year over the period from 1988 to 2000.

The National Prevalence Survey reported that adults who gambled on at least one form of gaming in the six months before being surveyed, spent an average of NZ$41 a month. A selection of other findings of interest were:
  • men typically spent NZ$53 per month compared with women, who spent NZ$30
  • people aged 45-54 were the highest-spending of the age groups, at NZ$58 per month
  • Pacific Island people (NZ$62 per month) and Mäori (NZ$49 per month) were the highest spending ethnic groups. Europeans and Asians were next at NZ$40 per month and NZ$38 per month respectively
  • in the analysis by qualifications held, people with degrees or higher qualifications (at NZ$27 typical expenditure per month) were the lowest spenders . Those with vocational/trade qualifications (at NZ$47 per month) or no qualifications at all (NZ$46 per month) were the highest spenders
  • expenditure by household income group was stable across the "middle" income groups, varying only between NZ$37 and NZ$40 per month. People with household income above NZ$70,000 typically spent an average of NZ$67 per month. People with household income of NZ$20,000 or less typically spent an average of NZ$30 per month.
Expenditure (the amount spent on gaming) is the same thing as the total amount lost by players. It is also the same thing as the gross profit of gaming operators (from which they must pay all their expenses, including taxes).

Diagram 3 gives an indication of how different operators use this gross profit. It is only a rough indication and our information is incomplete for casinos. We have virtually no information for those casinos that aren't publicly-listed companies. For those that are, we don't know how much of their expenses, including income tax, relate to gaming and how much to their other business activities (like theatres, restaurants and bars).
The net profit of the Lotteries Commission and of non-casino gaming machines is distributed to community groups. The net profit of race and sports betting is distributed to racing clubs. The net profit of casinos is paid to the owners and operators, including any shareholders.
Diagram 3: Allocation of Gross Profit (Expenditure)

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Last updated: 07/10/2002