New Zealand DIA Recovers NZ$11.5 Million in Pokie Funds After Identifying Compliance Failures Across Class 4 Trusts

New Zealand’s Department of Internal Affairs has secured commitments to return NZ$11.5 million to community organisations after a review uncovered accounting and compliance failures in the Class 4 gambling sector. The probe focused on pokie trusts and how they handled proceeds from gaming machines that generate more than NZ$1 billion each year. Officials determined that money intended for grants was sometimes used instead for society expenses, including gaming machine purchases.

The wider amount under scrutiny could reach NZ$28 million. Vicki Scott, Director of Gambling at the Department of Internal Affairs, said around three-quarters of the 32 trusts examined failed to comply with the rules to some degree. The regulator had been investigating the sector for two to three years.

Trust Perspectives on Historical Compliance Issues

Pub Charity chief executive Martin Cheer said misunderstandings over regulatory requirements may have contributed to the problems. Cheer acknowledged that trusts remained responsible for meeting their obligations, adding that these are sovereign entities with governance structures and management that should have done better.

Gaming Machine Association chair Peter Dengate Thrush noted the NZ$28 million figure covered a long period and should be viewed against the overall amount passing through the sector. “If the total figure that the department is now saying needs accounting for is $28m, while that’s a lot of money, spread out over the 10 years that the department has now gone back … it’s only a very small proportion of the total flow,” Dengate Thrush said. He supported consequences for deliberate breaches.

Enforcement, Recovery Targets and New Guidance

The Department imposed a six-day suspension on One Foundation’s operator licence after accounting failures involving gambling proceeds and failure to surrender a venue licence when required. Scott said some organisations had spent beyond their means and placed their own expansion ahead of community funding. The Department believes around NZ$20 million could ultimately be recovered and has agreed repayment plans with some trusts.

New financial guidance has been issued for Class 4 operators, setting out accounting requirements with practical examples. The regulator stated that this work has focused on ensuring gambling proceeds are used in the way Parliament intended. The investigation remains active as officials continue to recover funds and improve compliance.

Reporting: World Casino News

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