A hearing to revoke Kim Dotcom's bail will resume on Monday, New Zealand time, with the Crown arguing that the one-time tycoon is a flight risk and should await an extradition hearing in jail.

(Update: The Auckland District Court has denied an application by the United States to have Kim Dotcom's bail revoked or to have him electronically tagged. The Court found there was no evidence Dotcom had breached his bail conditions or that he was a flight risk.)

Dotcom has mounted an extraordinary defence to avoid being sent to the US to face criminal copyright violation and racketeering charges.

He embarrassed New Zealand's Prime Minister and security agencies at hearings over illegal surveillance. He even appeared to have restored some of his finances with the launch of new internet businesses "privacy" service Mega and online music startup Baboom.

However, little has gone right for Dotcom since an ill-judged and poorly executed entry into politics via the Internet Party earlier this year.

He lost public sympathy as a result, and has split with his wife Mona, who now appears to have control of the family's remaining assets.

A chastened Dotcom now says he's broke. He has even been abandoned by his long-standing law firm.

At a hearing that started on Thursday at the Auckland District Court, the Crown argued that Dotcom breached bail conditions set in 2012.

In response, Dotcom's lawyer argued that a series of Crown claims have no substance.

Much of the hearing focused on Dotcom's finances.

His businesses and funds were supposed to have been seized at the time of his arrest after an extraordinary military-style raid on his mansion north of Auckland in January 2012. However, he appeared until recently to still be enjoying the lavish lifestyle he became famous for.

Spending admitted in court this week included $10 million on legal fees, $4.5 million in funding for the ill-fated Internet Party, $80,000 a month on rent, and another $1 million on his "Good Times" music album.

The hearing heard that the $40 million he created in new businesses had gone into a family trust of which he is no longer a beneficiary.

The Crown also alleges that Dotcom was trying to sell a Rolls Royce that was subject to seizure with his other assets, and has had contact with former Megaupload colleagues against his bail conditions.

Dotcom denies both claims.

The Crown even got personal, quizzing Dotcom over the amount of time he spends playing online games.

Dotcom responded that he plays for a couple of hours each day, except when Call of Duty Modern Warfare was launched, when he played for 30 hours straight in order to become number one in the world.

As an alternative to incarceration, the court could order Dotcom to wear an electronic tag.