How a Canterbury man made $11m running NZ’s biggest off-the-books lottery – and then lost it all
Friday, 29 May 2026
Within little more than a year, Waiariki McIlroy-Jones generated more than $11 million running New Zealand’s largest illegal lottery. The entrepreneur did not scam the people following him, but broke a host of strict gambling regulations. Now, a judge says he will avoid jail as he considers the complex case. Brett Kerr-Laurie and Sinead Gill report.
As business boomed, so did the prizes. Sports cars, off-road utes, dirt bikes, jet skis, boats and even a freehold house were plastered across social media besides grinning gamblers.
The message was clear: For a few dollars, luxury could be yours too. And if you did not need a second car? Take a life-changing cheque for $100,000 instead.
In little over a year, Rangiora man Waiariki McIlroy-Jones and his company Jonez LRC generated $11.1 million selling 287,000 entries to 58 lotteries between June 2022 and July 2023. The winners were drawn on livestream and millions of dollars reinvested in bigger and bolder prizes.
But the operation was unlicensed, in breach of the Gambling Act and, as investigators put it, “entirely for self-serving interests and personal gain”. Thirteen months after his first raffle, the Department of Internal Affairs (DIA) seized more than 20 vehicles and two properties related to the lottery.
At the Christchurch District Court on Friday, Judge Raoul Neave said McIlroy-Jones would avoid jail for his crimes, but remanded his sentencing decision to further weigh the complex case.
McIlroy-Jones previously insisted his operation was legitimate, but pleaded guilty in January.
How it all worked
McIlroy-Jones disguised his lottery as a lawful sales promotion scheme, a tactic used by businesses where buyers ‘go into the draw’ when they purchase a product.
The catch is, businesses cannot make a commercial gain from the prize draw itself – though they normally see an up-tick in product sales. It is supposed to be an incentive on the side, not the main attraction.
Jonez LRC, which had previously only bought and sold vehicles, announced its first “giveaway” on May 17, 2022. On Facebook, McIlroy-Jones explained people could enter the draw by buying a “poster” from his website.
It quickly gained traction, and the value of prizes increased. By the end of March 2023, Jonez LRC had conducted 29 draws and announced it had given away $1m in prizes.
However, the posters the company was “selling” were really just electronic JPEG files with little value and were rarely referred to, despite the lottery supposedly promoting their purchase.
The company’s pricing structure further indicated the posters were irrelevant. For $20, customers received two lottery entries and three posters, at a cost of $6.70 per poster. For $100, they received 30 tickets but just five posters, at $20 a poster.
Jonez LRC encouraged customers to buy more entries with limited “double entry” periods and other promotions, like the chance to win 100 free entries for purchases during a specified time.
Between late 2022 and early 2023, the business model transitioned to a loyalty rewards scheme, where customers could sign up for days or months to receive discounts at about 40 stores affiliated to the scheme.
But the pricing of the scheme was also questionable, especially when compared to a similar one that offered larger discounts at thousands of stores for the same price. Upon purchase, customers were only advised about the lottery, not the discounts.
Shortly before the DIA suspended the Jonez LRC website, buyers were getting sent a “don’t miss out” offer promising 50% off another order in the next 10 minutes.
A further 29 draws were conducted with the discount scheme between April and July 2023. The final two giveaways – for a Nissan Safari 4x4 and a house valued at $900,000 – were interrupted before the winners could be drawn, though some people had already bought tickets.
The downfall
The DIA launched its investigation into Jonez LRC after receiving “a number” of complaints about the operation from October 2022.
It culminated in the search of multiple properties across Christchurch and North Canterbury in July 2023, and the seizure of almost 20 vehicles in McIlroy-Jones’ name, including a 1970 Ford Falcon and 1992 Mazda RX-7.
The DIA also seized two properties linked to the illicit gambling, including the house that was being advertised as a giveaway prize. It ground the lottery operation to halt.
Jonez LRC kept its large following updated on social media, assuring customers they were the top priority and the DIA was just checking it complied with gambling rules.
Then, the company started selling clothing merchandise in an attempt to “hopefully work our way back up” and “get back on our feet”. The last Facebook update was in February 2024.
After he was charged, McIlroy-Jones initially wanted to go to trial, but pleaded guilty in January this year.
The DIA found Jonez LRC generated $3.3m of revenue when it was using posters. Of that, $1.9m was spent on the prizes and $500,000 on other expenses, including $200,000 of advertising. McIlroy-Jones also paid himself a $180,000 salary.
When selling loyalty schemes it made $7.8m, spending $4.5m of that on prizes and $600,000 on other expenses, including $393,000 of advertising. The advertising money was mostly sent to social media companies to promote the lottery as widely as possible.
DIA director of gambling Vicki Scott previously said lotteries of Jonez LRC’s scale must be licensed and conducted for community benefit.
“In this case Mr McIlroy-Jones sought to pass off his online lottery as a ‘sales promotion scheme’ entirely for self-serving interests and personal gain.”
What happened in court
On Friday, defence lawyer Katherine Basire told Judge Raoul Neave the ordeal had been a “huge and expensive lesson” for her young client.
“He is remorseful, I’ve spent a considerable amount of time with him, and he does now understand the public welfare regulatory aspect of the Gambling Act.”
She said most of the enterprise’s profit would go back to the Government, because much of it was invested back into the business and then seized by the DIA.
“This is not someone who took the money and was using it for his benefit, taking overseas holidays or living an extravagant lifestyle.”
She said McIlroy-Jones’ background could be linked to the offending, and one could see why he considered it attractive to give away money and “be seen as someone who was helping others out”.
McIlroy-Jones did not entirely accept his operation was “merely a front for gambling” because he did have a legitimate business to begin with, and was also selling merchandise.
“I’ve spent a lot of time with Mr McIlroy-Jones over the last 18 months and I do believe he is someone who has much to offer the community,” Basire said.
“And while there is intense media interest in this because of the turnover, I believe he fell into this offending not because he has any criminal mindset, and I ask you to take that into account.”
Prosecutor Chris White reiterated the enterprise was “one of the largest unlawful gambling operations that the DIA has both investigated and prosecuted”.
He said Jonez LRC utilised a “loophole” in New Zealand’s gambling laws, and some of the promotional tools it used were a particularly aggravating feature.
“People are always going to pay what might be a small sum of money for them to win a big prize, but there are harms that come along with that and that is why gambling is so tightly regulated in New Zealand.”
White argued that imprisonment should be the starting sentence, and could be the end result if not for McIlroy-Jones’ personal circumstances, the detail of which the court did not go into.
Judge Neave said McIlroy-Jones would not be going to prison, but he reserved his decision to further weigh the complex case.
The judge said it was not a case where the public was being misled, and there was a level of naivety to the offending.
He remanded McIlroy-Jones on bail to June 24.