New Zealand's gambling landscape is a patchwork of regulations designed to balance entertainment, economic benefits, and harm minimisation. At its core sits the Totalisator Agency Board New Zealand (TAB NZ), the statutory monopoly operator for betting on horse racing, greyhound racing (until recently phased out), and sports. This position grants racing a unique status under the nation's gambling laws, allowing it to retain vast profits for industry reinvestment while paying minimal levies for problem gambling support. Recent extensions of this monopoly to online platforms in 2025 have reignited debates: why does racing enjoy such special treatment, and why hasn't reform happened despite evidence of harm?
The TAB's privileges stem from decades-old protections, but as problem gambling affects around 65,000 adults – with disproportionate impacts on Māori and Pacific peoples – questions persist about equity and public health. This analysis delves into the historical, economic, and political factors preserving the status quo, drawing on government reports, expenditure data, and expert commentary.
Historical Roots of Racing's Privileged Position
Horse racing has deep cultural roots in New Zealand, dating back to the 19th century as a popular pastime intertwined with colonial society. The TAB was established in 1950 as the world's first government-run totalisator, centralising off-course betting to fund the racing industry. This created a statutory monopoly under the Racing Act, later consolidated in the Racing Act 2003 and Racing Industry Act 2020.
The shift from fragmented private bookmakers to a national pool ensured steady revenue for tracks, breeders, and trainers. By 1996, fixed-odds and sports betting were added, expanding TAB's remit. Greyhound racing joined until ethical concerns led to its phase-out. This history framed racing as a 'national institution', deserving protection amid competition from pokies and lotteries post-Gambling Act 2003.
Politically, racing lobby groups like Harness Racing New Zealand and New Zealand Thoroughbred Racing wield influence, citing 18,300 jobs and provincial economies. Governments have intervened repeatedly, from duty repeals to monopoly extensions, often citing 'ministerial expectations' for swift action.
The Legal Framework: Gambling Act vs Racing Industry Act
The Gambling Act 2003 governs lotteries, casinos, and non-casino electronic gaming machines (EGMs or pokies), mandating 40% of net proceeds returned to authorised purposes like community grants, with strict venue limits and sink-the-pokies campaigns curbing expansion. In contrast, the Racing Industry Act 2020 treats racing separately, authorising TAB as the sole totalisator operator.
A key distinction: Gambling Act section allows proceeds for 'promoting race meetings', unique to racing. TAB outlets host EGMs, blending betting with pokies, but racing profits bypass standard redistribution. The 2025 amendment to the Racing Industry Act banned offshore online betting on racing/sports for Kiwis, cementing TAB's digital monopoly to 'maximise returns to racing'. This extraterritorial reach targets overseas operators, fining promotions to NZ punters.
Self-regulation empowers racing codes to govern independently, with the Racing Integrity Board handling welfare – a far cry from DIA oversight on other gambling.
TAB Monopoly: From Shops to Apps
TAB NZ operates ~675 outlets, online platforms, and phone betting, serving 170,000 account holders. Pre-2025, offshore sites siphoned revenue; Kiwis bet billions abroad yearly. The monopoly extension, effective June 2025, prohibits non-TAB online racing/sports betting, justified by industry bailouts post-COVID losses. Franchised to Entain (UK firm) since 2023, TAB retains control via performance clauses.
Revenue model: ~80% turnover returned as prizes, rest funds racing after costs/taxes. 2023/24 expenditure (losses): $371m on TAB, vs $1,037m non-casino EGMs. Turnover historically ~$2.5b, with $199m distributed 2024 ($195m racing).
This protects ~$1.4b annual racing economy but critics argue it stifles competition, innovation, and harm reduction.
Tax and Levy Exemptions: A Financial Lifeline
Racing's exemptions are stark. No income tax; totalisator duty phased out by 2021, saving $14.5m (2024), $11.5m to racing – foregone Crown revenue. Problem Gambling Levy (PGL): TAB pays 0.74% betting profits/1.24% EGM profits, vs Lotto 5.5%, casinos 4%, non-TAB EGMs 20%.
Under 2021 Regulations, TAB keeps 2.5% profits for harm (vs full operator responsibility elsewhere), 97.5% to racing/sports. Compare: Lotto 100% community; pokies 37% harms from 14% high-risk players.
| Gambling Form | PGL Rate | 2023/24 Expenditure ($m) |
|---|---|---|
| TAB NZ | 0.74-1.24% | 371 |
| Non-Casino EGMs | 20% | 1,037 |
| Casinos | 4% | 592 |
| Lotto | 5.5% | 792 |
Source: DIA 2023/24.
The Harm Dimension: Racing's Underestimated Role
Problem gambling steady at 1.6% adults (65k moderate/problem, PGSI), higher for Māori (3.13x), Pacific (2.56x). EGMs worst (45.6% interventions), TAB 10.4%. NZGS 2023/24 confirms stable prevalence, but online/offshore growth ($332m 2022) evades levy.
Racing harm: Continuous betting fosters addiction; TAB EGMs exacerbate. Yet low levy despite monopoly boosting volume. Intervention data: TAB clients lose less per player than EGMs but volume high.
Strategy 2025-28 allocates $50m+ for services, but stakeholders urge offshore inclusion, racing alignment.Ministry of Health Strategy
Economic Justifications and Provincial Lifelines
Proponents cite 18k jobs, $1.4b economy, $50m grants. Provincial TABs sustain rural tracks. 2024: $195m racing reinvestment sustains breeding, events. Critics: Subsidies via exemptions cost taxpayers; harms offset benefits unevenly (pokies in deprived areas get 12% back).
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Political Lobbying and Self-Regulation
Racing codes lobby effectively; 2025 bill passed amid 'ministerial expectations'. Self-governance post-2020 Act reduces oversight, contrasting pokie venue caps. No major reform despite reviews.
Separate Online Casino Bill (2025) licenses 15 operators from Dec 2026, but racing protected – highlighting silos.
Stakeholder Perspectives: Industry vs Public Health
- Racing Industry: Monopoly vital for survival; Entain franchise boosts tech/harm tools (limits, self-exclusion).
- Public Health: Align levies; end exemptions. Marriott/Rashbrooke: 'Wholesale review needed'.
- Punters/Govt: Offshore bans reduce harm? But monopoly limits choice.
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Why No Change? Barriers to Reform
Entrenched history, lobby power, economic narratives prevail. COVID bailouts ($150m offers rejected) underscore reliance. No crisis like pokie wars; online casino focus diverts. Yet rising offshore harm ($332m) pressures review.
Future Outlook: Potential Shifts Ahead
Gambling Harm Strategy 2025-28 eyes online; PGL review 2025 levy racing contribution. Public pressure, equity calls (Māori harm) may force alignment. Balanced reform: higher levies, competition, while preserving culture?
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Photo by Mathew Schwartz on Unsplash
Conclusion: Time for Equitable Regulation?
Racing's special treatment – monopoly, low levies, self-rule – persists due to legacy, economics, politics. But as harm endures, a rethink could harmonise laws without dismantling a cultural pillar. Explore jobs in regulation at higher-ed-jobs, university-jobs, or rate professors at rate-my-professor.