A Christchurch man who ran illegal lotteries generating $11.12 million in sales will not go to prison, a judge has indicated, though formal sentencing has been reserved.
Waiariki McIlroy-Jones and his company Jonez LRC Ltd were due to be sentenced at Christchurch District Court on 29 May for running the schemes, but Judge Raoul Neave reserved his decision until June. The pair pleaded guilty in January to charges laid by the Department of Internal Affairs.
The illegal lottery schemes operated between June 2022 and July 2023, selling over 287,000 entries to 69,500 unique purchasers. McIlroy-Jones and his company ran 29 giveaways between April and July 2023, with prizes including motor vehicles, cash, and a mortgage-free house in Rangiora with a $700,000 cash alternative.
The schemes began with a poster package model charging $30 per entry, with purchasers receiving downloadable JPEG images. By 2023 McIlroy-Jones changed to a loyalty rewards club model linking lottery entries to memberships offering discounts at about 40 merchants across six cities. McIlroy-Jones paid himself a shareholder salary of $180,000 from the operation.
Judge Neave told the court "I think I can say now without any great difficulty he's not going to prison. It's just a question of what else I do with him". He noted "it's not a situation where the defendant has tried to hide it. He's made some terrible calculations which has seen him end up in this position".
The company came to Internal Affairs' attention in October 2022 after complaints about the giveaways. Under New Zealand law, gambling for prizes over $5000 can only be run by not-for-profit societies and requires a licence. This was the first prosecution of an online illegal lottery in New Zealand.