'Biggest loser will be him:' Man behind $11m online lottery sentenced for illegal gambling scheme

A man who ran the largest illegal lottery identified in New Zealand has been sentenced for his role in generating $11 million in revenue in just over a year from online “giveaway” entries.

Waiariki McIlroy-Jones briefly appeared today on illegal gambling charges at Christchurch District Court, where Judge Raoul Neave sentenced him to six months’ community detention and 250 hours of community work.

Waiariki McIlroy-Jones was scheduled to be sentenced on May 29, but Judge Neave reserved his decision until today.

The 21-year-old offered big prizes, quickly snowballing to the point where high-value cars, boats, caravans, cash and a freehold house were up for grabs.

Nearly 70,000 buyers made more than 280,000 bets.

McIlroy-Jones marketed his enterprise as legitimate.

But it wasn’t.

It was a sales promotion scheme for the car dealer’s personal gain and, while prizes were paid out, McIlroy-Jones was breaking gambling regulations by operating without a licence.

His “promotions” came to an end when the Department of Internal Affairs (DIA) raided multiple addresses across Christchurch and North Canterbury in July 2023.

The investigation went on to become New Zealand’s first prosecution of an online illegal lottery.

The investigation

Under the Gambling Act, gambling with prizes that exceed $5000 can be conducted only by a not-for-profit society for authorised purposes. It requires a class-3 gambling licence to ensure the integrity of the operation and protection of participants.

From October 2022, the DIA received several complaints about giveaways and began investigating McIlroy-Jones.

According to the summary of facts, he was the sole director of Jonez Vehicle Buyers. He changed the company name to Jonez LRC in 2023.

Waiariki McIlroy-Jones.

The buying and selling of used cars was the primary activity of the company.

However, in 2022, he began conducting lotteries with cash and vehicles as prizes.

Although he positioned the lottery as a lawful sales promotion scheme, it didn’t comply with the requirements for such a scheme.

Over time, the lottery grew significantly to the point where one of the final prizes on offer was a freehold house or a $700,000 cash prize.

More than 287,000 lottery entries were bought by 69,500 unique purchasers over about a year.

McIlroy-Jones would appear on the company’s Facebook page promoting giveaways. He would explain how people could enter draws by buying posters and ran dozens of giveaways using the poster package scheme.

As time went on, the value of the prizes increased to the point where he announced the company had given away $1m.

At some point, he changed the promotion to a loyalty club scheme and launched a new website.

The “packages” were promoted as short-term and offered for discounts with “shop partners”.

Like the previous scheme, buyers were entitled to lottery entries.

The lotteries continued, increasing in frequency.

In July 2023, a giveaway was announced for a freehold, mortgage-free house in Rangiora.

The alternative prize was $700,000.

The DIA then pounced, seizing dozens of his vehicles and two properties.

‘The biggest loser in fact will be him’

At the Christchurch District Court last month, Judge Neave said McIlroy-Jones would not be imprisoned.

The judge said a forfeiture application order under the Criminal Proceeds (Recovery) Act was a deterrent.

However, there were aggravating features as there was significant activity over an extended period, it wasn’t clear how much profit was made, the operation was reasonably sophisticated, and the community didn’t benefit, he said.

“The biggest loser in fact will be him, because some legitimate things will be swept up in the forfeiture.”

He said a fine wasn’t realistic.

Vicki Scott, DIA’s director of gambling, said earlier this year that the successful prosecution should serve as a stark warning to anyone involved in running an illegal lottery that they could expect to find themselves the focus of an investigation.

Al Williams is an Open Justice reporter for the New Zealand Herald, based in Christchurch. He has worked in daily and community titles in New Zealand and overseas for the last 16 years. Most recently he was editor of the Hauraki-Coromandel Post, based in Whangamatā. He was previously deputy editor of the Cook Islands News.