New Zealand’s gambling industry thrived in 2020

Gambling is one of the favourite pastime activities in New Zealand for quite some time now. Since 2003, when the government introduced the Gambling Act, the industry has grown considerably, and now, thanks to technology advancements, online gambling is the next big thing in the country.

Despite video poker machines, or “pokies”, still being favoured by most Kiwis, online gambling activities such as sports betting and online casinos are currently trending among punters in the country, with a fast-growing fanbase, attracting even casual gamblers and novice players. Last year, as the COVID-19 pandemic forced governments to impose lockdowns, and land-based gambling facilities were forced to shut down, these online operators were able to bounce back and reported some profit in the last quarter of 2020.

Mobile betting is the main driving force behind the growth of online gaming in New Zealand, and in 2020, the Lotto, which is one of two fully regulated mobile gambling activities, went through a 13 percent increase, as Kiwis spent more than NZ$630 million buying Lotto tickets. And TAB NZ, the national sports betting operator that recently launched a mobile betting app as well, is projected to reach profits up to NZ$30 million for 2021.

Big profits in 2020

In March, the Department of Internal Affairs, which is the government body that regulates and oversees gambling operations in New Zealand, reported some of the highest records in gambling spending since 2007. Despite the annual gambling profits being down NZ$128 million, pokies and the Lotto experienced an increase – NZ$252 million was spent across 14,781 poker machines outside casinos in the whole country, and NZ$631 million in Lotto tickets.

Since COVID-19 has had a negative impact in most industries, the Department of Internal Affairs was surprised by the results. The agency’s director of gambling Chris Thornborough stated, “We’ve been tracking the pokie money through COVID, and we knew there was going to be an impact but we were surprised by the bounce-back once the pokie restrictions were eased. We didn’t anticipate that there would be quite as vigorous a bounce back as there was over the December quarter”.

According to Peter Dengate Thrush, the chairperson for the Gaming Machine Association, this increase was a result of a tendency in the country’s economy. He said, “New Zealand in general has not suffered as much from the COVID experience as we might have done, we’re seeing rebounds across the whole economy. You have a look at the GDP figures for the last year – I was having a look earlier – I think overall we’re seeing a rebound in that quarter, of 14 percent in goods in the final quarter. The whole economy has not done as badly under a pandemic as we might’ve done.”

The gambling expenditure in 2020 was NZ$572 per capita, with NZ$128 being spent at casinos, NZ$160 on Lotto, NZ$80 at the TAB, and NZ$204 at the pokies.

Growth expected in 2021

Earlier in April, TAB NZ reported a 12% increase in net betting revenue in comparison with last year, climbing to NZ$164.7 million, in the early months of 2021, mostly due to favourable results in racing and fixed-odds sports, as well as a rise in turnover. Overall betting and gambling turnover was up from NZ$1.5 billion in the same period of 2020, to NZ$1.59 billion. They also noted this was 14% ahead of the expectations the agency had for this period. These figures resulted in NZ$94.5 million in profit before distributions, which represented a 25.2% rise from last year.

It’s important to notice that, by law, 40 percent of the profits from poker machines must be distributed as grants to communities all over New Zealand, and Thrush stated, “We recently put out NZ$300 million worth of grants into the local community, keeping sport, culture and art activities going all over the country, so it’s an enormous endeavour and an enormous advantage to New Zealand.”

TAB NZ’s new chief transition officer Dean McKenzie projects that the agency will be able to return millions more to sports codes around the country, and said, “There are a lot of factors in that equation, but firstly turnover has been great, very high with good profit percentages. […] on many levels the business is operating well ahead of budget and ultimately that should show out in our returns to the industry if things continue to track that way.”