Gates (24) led from start to finish and claimed victory by a shot in the $830,000 Open in his first appearance in a Nationwide Tour event.
It was a feelgood finish to arguably the most exciting tournament since The Hills won hosting rights three years ago.
Gates, with caddy and girlfriend Lauren Johnson by his side, captivated the galleries with his relaxed demeanour and classy all-round play.
His four-round total of 14-under 274 was one shot better than Australia's Andrew Dodt, with young American Jamie Lovemark a shot back in third.
But the tall, long-limbed and immensely likeable Gates had to survive near-meltdown on the final afternoon as he saw a six-shot lead evaporate in the space of nine holes.
Gates bogeyed the par-4 11th and dropped two shots when his drive on the devilish par-3 16th went into the ditch, while Dodt picked up consecutive birdies on the 12th and 13th holes.
But, in the teeth of a howling northeasterly wind, Dodt butchered the 17th to give Gates a two-shot buffer walking up the final fairway in front of a crowd of nearly 10,000.
Dodt drained a lovely 6m putt on the 18th for birdie, before Gates played an exquisite chip shot and tapped in for par to claim the $152,000 winners' cheque.
He quietly pumped his fist and high-fived the diminutive Johnson in celebration of his maiden victory.
"I had to focus on that putt.
It was one I'll remember for a long time," Gates said.
"Andrew played great all week and I have to give him a lot of credit.
He hit some of the most amazing shots I've ever seen."
Gates' effort followed Alex Prugh's win with a score of 19-under last year, meaning the New Zealand Open had back-to-back American winners for the first time since Corey Pavin did the double in 1984-85.
The Florida-raised, Texas-educated Gates said he felt no nerves on the back nine despite watching Dodt catch up.
"I felt good the whole time, and I really felt every shot went where I wanted it to," he said.
"The conditions were tough.
That wind really made it a great challenge.
"But I'm pretty happy with how it ended up."
Gates had a shiny trophy in front of him and a hefty cheque waiting for his banker, but he said there was most satisfaction in simply winning the battle.
"It was just nice knowing that, for this week, I was the best golfer here.
That provides a lot of motivation and encouragement that I'm doing the right thing.
"I didn't come down here with any real expectations.
But I prepared well and I was feeling good."
Gates gave the appropriately chivalrous response when asked to describe girlfriend and caddy Johnson's contribution.
"She's a great motivator.
She kept telling me I was doing great and she helped me on almost every single shot.
"I honestly couldn't ask for a better girlfriend or a better person to have as my caddy."
Dodt said he never gave up hope, even when he trailed Gates by six shots with just 11 holes to play.
"I thought I could pull back one shot at a time and I made good birdies on 12 and 13," Dodt said.
"If someone said to me at the start of the week that I'd finish second, I would have been pretty happy."
Dodt shook his head when he reflected on his fateful double bogey on the 17th, which included a drive into a bunker and a flubbed fourth shot out of another sand trap, that effectively killed his challenge.
But he was warm in his praise of champion and new friend Gates.
"I only met Bobby for the first time on Saturday. He's a great bloke and I'm really happy for him."
Another American, 22-year-old Lovemark, provided one of the stories of the week when he flew from a PGA Tour event, the Bob Hope Classic, in California, to play at The Hills.
He arrived at noon on Wednesday but said he did not feel jet-lagged, and his rounds of 70, 69, 69 and 68 backed him up.
Lovemark's 68 matched the round of the day and he ended up having a nervous wait in the clubhouse, facing the possibility of a play-off if Gates and Dodt kept dropping shots.
Australians Michael Curtain (11-under) and Mark Hensby (10-under) rounded out the top five, while American Casey Wittenberg shot a 4-under-par 68 yesterday to finish sixth on 9-under for the tournament.
