New Zealand Parent Resident Visa 1000 per year Quota selection criteria?

I have been exploring New Zealand residence visa options for me and my parents. I have tried but am unable to ascertain the following:

The New Zealand Parent Residence visa (which allows indefinite stay for parents of NZ Citizens/residents, but with travel conditions) is subject to a quota of 1000 each year.

Now is this a random lottery? I can’t find how they decide which applicant to choose. Does anyone know anything about this, that is their selection criteria for the 1000 per year quota?

EDIT: Also, I wanted to know whether Parents can be sponsored by just Permanent residents of New Zealand or are Skilled work resident visa holders also eligible?
Asking because they write on the website that the sponsoring adult child "must be a New Zealand citizen or resident". Is this simply any resident or necessarily a permanent resident?
Thank you