In what has been described as New Zealand’s largest illegal lottery operation ever discovered, 23-year-old Waiariki McIlroy-Jones from Rangiora found himself at the center of a major Department of Internal Affairs (DIA) investigation that resulted in multiple criminal charges and the seizure of millions of dollars in assets.
The Rise of Jonez LRC
Waiariki Shane Tamati McIlroy-Jones operated his business through Jonez LRC Limited, a company registered as a car dealer that began operations in June 2021. What started as what appeared to be a legitimate vehicle trading business quickly evolved into something much more lucrative and ultimately illegal.
Using sophisticated social media marketing, McIlroy-Jones and his company promoted what they described as “giveaways” through their Facebook page and website. The company would post images and videos of luxury prizes—primarily expensive cars, but also boats, cash, and even a freehold house—encouraging people to enter draws to win these items. 
The Illegal Lottery Operation
Despite being marketed as “giveaways,” the reality was quite different. Entry into these draws required payment, with customers able to purchase entries as package deals alongside other merchandise. This payment structure, combined with the chance-based selection of winners and the valuable prizes on offer, created all three elements that legally constitute gambling under New Zealand’s Gambling Act 2003: consideration (payment), chance, and prizes.
The scale of the operation was unprecedented. According to DIA investigations, McIlroy-Jones and his company allegedly generated $11,125,500 in revenue over just slightly more than one year. This figure represents what authorities believe to be the largest illegal lottery operation ever discovered in New Zealand.
The prizes offered were substantial, with many exceeding the $5,000 threshold that legally requires operations to be conducted by licensed not-for-profit organizations under the Gambling Act. Instead of operating as a legitimate licensed lottery, the business appeared to exploit the appeal of luxury items and the excitement of gambling while avoiding proper regulatory oversight.
The Investigation and Asset Seizures
The DIA investigation into Jonez LRC began as authorities became aware of the scale and nature of the operation. The investigation required complex forensic accounting and digital forensics techniques to unravel the full extent of the alleged illegal activity.
In July 2023, police executed search warrants and moved to freeze the business operations. The asset seizures were extensive, including luxury cars, boats, motorcycles, two properties, and over 20 vehicles. Bank accounts were also frozen as part of the investigation.
McIlroy-Jones publicly acknowledged the seizures on social media, posting on Instagram: “They’ve taken the cars, the houses, the bikes, boats, whatever they want to take … they freezed the bank accounts.”
The seized assets represented the accumulated wealth from what authorities alleged was the illegal gambling operation, with investigators working to trace the flow of money through the business to determine the full scope of the alleged criminal activity.
The Criminal Charges
In May 2024, formal charges were laid against both McIlroy-Jones and his company, Jonez LRC Limited. The charges were filed in the Christchurch District Court and include:
- Conducting illegal gambling under the Gambling Act 2003
- Promoting illegal gambling
- Making pecuniary gain from illegal gambling
These charges carry significant potential penalties, reflecting the serious nature of the alleged offenses and the substantial sums involved. The case was described by DIA investigations manager Marty Greentree as unprecedented in its scale: “Eleven million dollars is a lot of money – there’s a lot of moving parts with this so it does take time using complex investigation techniques such as forensic accounting and digital forensics.”
Legal Framework and Violations
The case highlights important aspects of New Zealand’s gambling legislation. Under the Gambling Act 2003, any lottery with prizes exceeding $5,000 can only be conducted by licensed not-for-profit organizations for authorized purposes. This regulation exists to ensure the integrity of gambling operations and protect participants from exploitation.
DIA gambling director Vicki Scott emphasized the importance of these requirements, stating: “Our strict licensing requirements are there for a reason. We will not hesitate to respond firmly when we see instances of illegal gambling such as unlicensed online lotteries. We have no tolerance for those who seek to profit by bypassing the rules.”
The Jonez LRC operation allegedly violated these fundamental principles by:
- Operating without proper licenses
- Generating profits for private individuals rather than charitable causes
- Offering prizes well above legal thresholds without authorization
- Using payment-based entry systems that constituted illegal gambling
Impact on Participants and the Community
The illegal nature of the operation meant that participants had no regulatory protections typically associated with legitimate gambling activities. Unlike licensed operations, there were no safeguards for problem gambling, no guaranteed payouts, and no oversight of the fairness of the draws.
The case also represents a significant loss of potential community benefit. Under New Zealand’s regulated gambling framework, profits from legitimate lotteries must go toward authorized purposes such as charitable causes, sports, and community projects. The alleged private profit-taking in this case diverted these potential community benefits.
Current Status and Ongoing Proceedings
As of late 2024, the case remains before the courts. McIlroy-Jones appeared in Christchurch District Court to face the charges, with the matter progressing through the legal system. The complexity of the case, involving extensive financial records and digital evidence, has meant that proceedings have taken considerable time to advance.
On social media, McIlroy-Jones has maintained some presence but acknowledged that the business is no longer operating. In February 2024, he posted on the Jonez Facebook page: “We haven’t had any movement with our case, our position still stands where the government have all control over our assets and money, we are waiting patiently for the next step just like everyone else.”
The frozen assets remain under government control pending the resolution of the criminal case, with their ultimate disposition dependent on the court proceedings.
Broader Implications for the Industry
The Jonez LRC case has become a landmark example of how modern social media marketing can be used to operate sophisticated illegal gambling schemes. The use of attractive prizes, slick promotional videos, and online payment systems created an operation that appeared legitimate to many participants while allegedly violating fundamental gambling laws.
The case has also highlighted the growing trend of illegal gambling operations, with the DIA reporting an increase in suspected illegal gambling cases over recent years. Marty Greentree noted: “They are on the rise and we take a risk-based approach on what we choose to investigate.”
For businesses considering promotional activities involving prizes and payments, the case serves as a stark warning about the importance of understanding and complying with gambling legislation. The significant penalties and asset forfeitures demonstrate the serious consequences of operating outside the legal framework.
Lessons for Consumers
The case also provides important lessons for consumers about identifying legitimate lottery and promotional activities. Consumer New Zealand has advised that the best way to check the legitimacy of a lottery is to search for it on the companies register, though they acknowledge this is not always practical for consumers.
Key warning signs that consumers should watch for include:
- Lotteries requiring payment for entry that aren’t clearly operated by licensed charities
- Prizes significantly above $5,000 being offered by commercial entities
- Operations that lack clear licensing information or regulatory oversight (check the New Zealand Companies Register for verification)
- Promotional activities that seem too good to be true
The Path Forward
As the legal proceedings continue, the Waiariki McIlroy-Jones case stands as a significant example of how gambling laws apply in the digital age. The case demonstrates that regardless of how activities are marketed or what technology is used to conduct them, the fundamental legal principles governing gambling remain applicable.
For the broader industry, the case emphasizes the importance of seeking proper legal advice before implementing any promotional activities that involve prizes and payments. The distinction between legitimate marketing and illegal gambling can be subtle but carries enormous legal and financial consequences.
The ultimate resolution of this case will likely provide further guidance on how New Zealand’s courts interpret gambling law in the context of modern digital marketing and social media-driven promotional activities. Until then, it serves as a powerful reminder of the serious consequences that can result from operating outside New Zealand’s carefully constructed gambling regulatory framework.