The New Zealand Department of Internal Affairs (DIA) has successfully recovered NZ$11.5 million, equivalent to US$6.6 million, during its investigation focusing on compliance within the pokies sector. The gambling regulator announced on Friday that these recovered funds from operators will be allocated to benefit community organizations.
According to Section 106 of the Gambling Act 2003, holders of a class 4 licence, commonly referred to as "corporate societies" by the regulator, are obligated to direct the net proceeds from class 4 gambling towards authorized purposes specified in their licence.
The DIA collaborated closely with class 4 gambling operators, often known as pokies trusts, and uncovered significant compliance issues. There were numerous instances where funds intended for community grants were misappropriated for society expenses, including the purchase of additional gaming machines.
Vicki Scott, the DIA’s director of gambling, remarked on the positive outcomes of the investigation, emphasizing the need for ongoing efforts to enhance compliance and ensure communities benefit from gambling proceeds. "Most operators have worked constructively with us to address historical issues and improve their practices," stated Scott. "While we’ve made substantial progress, our work is not finished. We’ll continue working with operators to recover funding for communities, improve compliance and maintain public confidence in the integrity of class 4 gambling."
Additionally, the DIA suspended the operating licence of the class 4 gambling society One Foundation for six days following the discovery of accounting failures related to gambling proceeds and a breach concerning the failure to relinquish a licence for one of its pokies venues as mandated by law.
To aid in compliance, the DIA released new financial guidance for class 4 operators, designed to clarify their accounting obligations and improve consistency across the sector, thereby preventing future issues.
This intensified scrutiny comes as New Zealand prepares for the upcoming liberalization of the online gambling market, anticipated to launch in 2027. As part of this, international companies Entain and Super Group have expressed interest in obtaining three online gambling licences each.
Earlier in May, the DIA’s initiative, dubbed “Operation Turbo,” resulted in charges against an Auckland man for operating two illegal poker venues in central Auckland, highlighting the regulator’s commitment to tackling land-based gambling breaches even as the online market expands.
