The Government is looking into how to crack down on overseas online betting, which is depriving it of millions of dollars in tax.
A working group has been appointed to find solutions to the problem, which is affecting the racing industry.
Racing Minister Nathan Guy said New Zealanders were placing their sports bets with overseas operators, which operated outside of the country's regulatory framework.
He said that meant those operators profited from New Zealand racing and sports without paying their fair share of tax.
Mr Guy said New Zealanders betting that way were also operating outside the safety net of gambling harm programmes.
The working group's recommendations are due later this year.