The Canterbury man responsible for what authorities describe as the largest illegal lottery ever uncovered in New Zealand has avoided a prison sentence, receiving community-based penalties despite generating more than $11 million through a sophisticated online operation.
Report by elocal
Waiariki McIlroy-Jones and his company, Jonez LRC Ltd, were sentenced in the Christchurch District Court after earlier pleading guilty to charges relating to organising illegal gambling and profiting from unlawful lotteries.
Community-based sentence
Judge Raoul Neave sentenced McIlroy-Jones to:
- Six months' community detention
- 250 hours of community work
The sentencing followed an earlier hearing where the judge reserved his decision, describing the matter as complex and indicating imprisonment was unlikely.
How the operation worked
According to court documents, Jonez LRC Ltd began as a used-car business before evolving into an online prize promotion business.
Initially, customers paid around $30 for downloadable digital posters that also provided entry into prize draws for vehicles or cash. Authorities argued these promotions failed to meet the legal requirements for sales promotion schemes under New Zealand law.
The business later transitioned into a "loyalty rewards club" model, where customers purchased memberships that included lottery entries alongside discounts at participating retailers.
As the operation expanded, so too did the value of the prizes.
Among the prizes promoted were:
- High-value motor vehicles
- Boats
- Caravans
- Large cash prizes
- A mortgage-free home in Rangiora worth up to $700,000 in cash equivalent
Over approximately twelve months:
- More than 287,000 entries were sold
- Around 69,500 people purchased entries
- Total sales exceeded $11.12 million
Authorities said McIlroy-Jones personally received a shareholder salary of $180,000 during the operation.
Internal Affairs investigation
The Department of Internal Affairs began investigating following complaints received in late 2022.
Officials concluded the schemes were unlawful lotteries rather than legitimate sales promotions.
The final two promotions — offering the Rangiora house and a Nissan Safari — were halted before winners could be drawn.
First online lottery prosecution
Internal Affairs Director of Gambling Vicki Scott said the case marks a significant legal milestone.
She described it as New Zealand's first successful prosecution involving an illegal online lottery and said the operation was the largest illegal lottery ever identified in the country.
Scott said lotteries of this scale must be licensed and are required to operate for community benefit rather than private profit.
She added that the prosecution should serve as a warning that organisers attempting to circumvent New Zealand's gambling laws can expect enforcement action.
Wider implications
The case highlights the growing challenges regulators face as gambling increasingly moves online.
Traditional raffles and fundraising lotteries are tightly regulated under the Gambling Act, with licensing requirements designed to ensure transparency, fairness and community benefit. As online platforms make it easier to market high-value prize draws nationwide, regulators are likely to continue closely scrutinising schemes that blur the line between legitimate promotions and unlawful gambling.
The successful prosecution establishes an important precedent and signals that digital prize promotions will be subject to the same legal standards as traditional lotteries.
Source RNZ News
By Adam Burns