The bill was introduced by Internal Affairs Minister Brooke van Velden and would introduce 15 licences for online casinos, which would require companies to provide a harm prevention strategy and data showing past compliance.

Online casinos would need an age verification system to ban under-18s, contribute 1.24 percent of profits to a levy, and abide by advertising restrictions.

Companies breaking the rules would face fines of up to $5m.

The minister has said New Zealand-based online casinos would get no preferential treatment in obtaining licences.

Van Velden in a statement said the bill would seek to protect New Zealanders who gambled online, and the bill would impose regulations on the currently unregulated market.

"The most important part of this bill is protecting New Zealanders who enjoy gambling online by introducing robust safety measures for licensed operators. The bill will now proceed to select committee, and I would encourage interested New Zealanders to have their say when public submissions open," van Velden said.

In the first reading vote in Parliament on Tuesday, all MPs voted along party lines, with the coalition parties all in support.

Labour and Te Pāti Māori voted against the bill, but all 14 Green MPs voted in support.

The Greens' internal affairs spokesperson Benjamin Doyle told RNZ the party wanted to bring the issue to select committee with the aim of convincing the coalition parties to make significant changes.

"We always want to support movements towards harm reduction. So with online gambling, it's totally unregulated at the moment, and we see this as a very small step in the right direction to enact harm reduction techniques," they said.

"It's definitely not far enough, but we believe that going to select committee to hear from experts, community, people with lived experience of online gambling harm, and advocacy groups may be able to help us to inform changes and amendments and improvements to this legislation that will actually enact harm reduction."

However, the Problem Gambling Foundation has raised concerns about the approach. Advocacy and public health director Andree Froude said she feared usage of online gambling would increase, rather than decrease.

Froude called for changes including making requiring online gamblers to say how much money and time they would spend gambling before starting a session, and a ban on online gambling using credit cards which could leave them deep in debt.

The funding from the levy would go into the problem gambling levy pot of funding.

The independent Gambling Commission in a report this year highlighted the Ministry of Health had been unable to find evidence showing that $81m fund actually reduced harm.

Doyle said the Greens wanted to ensure 100 percent of the funding recouped from the moves would go back to harm reduction.

"There needs to be extremely high levels of transparency around where that funding is going, that revenue is going, and my ideal would be that 100 percent of the revenue goes towards community harm reduction... it shouldn't be going towards the back pockets."

They also wanted a ban on advertising for online gambling, and possibly a reduction in the number of licences.

The party had not yet approached the coalition parties to see what kind of support they could get for the changes, they said - and called for more consultation with Māori.

"The value mai i te kākano 'from the very seed' is the best approach when engaging with Māori. We should be engaging right from the beginning of drafting this piece of legislation."