New Zealand is working on how to recover the millions Kiwis has been spending on overseas bookmakers, starting with a new legislation.

The number of New Zealanders participating in overseas betting has grown from around 23,000 in 2010 to an estimated 40,000 today, according to the New Zealand Racing Board. And that number is expected to reach 80,000 within five years.

However, the board said the New Zealand racing industry sees none of the money because Kiwis are preferring to place their bets with Australian corporate bookmakers and international bookmakers that take bets on local race meeting and sporting events.

Last year, an estimated $329 million was wagered on New Zealand thoroughbred racing through Australian operators, which is significantly higher than the bets placed through the racing board.