The New Zealand Department of Internal Affairs (DIA) has successfully recovered NZ$11.5 million (approximately US$6.6 million) as part of its compliance investigation within the pokies sector. The announcement came on Friday, revealing that this recovered sum will be allocated to community organizations.
According to Section 106 of the Gambling Act 2003, class 4 license holders—often referred to as "corporate societies"—are required to apply or distribute net proceeds from class 4 gambling solely for authorized purposes specified in their licensing agreements.
During its investigation, the DIA engaged directly with operators of class 4 gambling, commonly known for overseeing pokies trusts. The regulator uncovered significant problems, including instances where funds designated for community grants were diverted for society expenses, such as acquiring additional gaming machines.
Vicki Scott, the DIA’s director of gambling, commented on the findings, highlighting the substantial outcomes of the investigation. She emphasized the ongoing commitment to enhancing compliance and ensuring that communities benefit from gambling proceeds. "Most operators have worked constructively with us to address historical issues and improve their practices,” Scott stated. “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."
In conjunction with the recovery of the funds, the DIA took enforcement action against One Foundation, a class 4 gambling society. The foundation's operational license faced a six-day suspension after the DIA found accounting discrepancies related to gambling proceeds and noted the failure to return a license for one of its pokies venues as legally required.
To further support compliance, the DIA introduced new financial guidelines for class 4 operators. These guidelines aim to clarify accounting standards and explain operators' obligations, striving to foster consistency in the sector and preempt similar compliance issues in the future.
As scrutiny on land-based gambling intensifies in New Zealand, the sector also prepares for an evolving online gambling market, projected to be launched in 2027. In May, the DIA conducted a separate inquiry, dubbed "Operation Turbo," leading to charges against an Auckland man on eight counts linked to illegal poker venues allegedly operating in the city. With a total license cap of 15 for the anticipated online market, international firms Entain and Super Group have expressed plans to acquire three online gambling licenses each.
