A review of New Zealand’s pokie trusts has found that up to $28 million intended to support community grants was instead used for other expenses. The findings have prompted repayment plans, criticism of trust governance and renewed scrutiny of the regulator’s guidance.
A regulated grant mechanism under review
Pokie trusts sit between gambling-machine revenue and community funding. Their role is to make money available for grants, while complying with rules overseen by the Department of Internal Affairs (DIA). The department says up to $28 million that should have been available for community grants was used to cover other expenses instead. DIA director of gambling Vicki Scott said about three-quarters of the 32 trusts were non-compliant with the rules to some degree. The review has examined activity over 10 years, making the issue one of long-term controls, accounting and governance rather than a single purchasing decision.
Trusts and regulator share responsibility
Pub Charity chief executive Martin Cheer said some trusts may have misunderstood the rules, while also saying that ignorance of the law was no excuse. He described the industry as regulated and said trusts needed guidance from the regulator, but stressed that they were sovereign entities with their own governance structures and management. Gaming Machine Association chair Peter Dengate Thrush similarly said the regulator’s job was to keep the industry clean, while arguing that most trusts tried to comply, work closely with officials and operate transparently. Neither criticism nor explanation establishes that every trust acted unlawfully.
Recovery is being pursued through repayment plans
The DIA believes about $20 million could be recovered, and said repayment plans have been devised with some trusts. Cheer said trusts were working to rectify the situation and that $11.5 million had been recovered so far. Scott said the department did not want to put a significant section of the industry out of business, but was firm that the money needed to return to the community within a reasonable period. Dengate Thrush said accounting mistakes could look worse because of the review’s timeframe, but added that trusts involved in creative accounting should face consequences and that suspected lawbreaking should be prosecuted.
The wider control lesson
The case shows how a ring-fenced public benefit can be weakened when organisations prioritise operating growth or competitive advantage over the purpose attached to the money. Scott said trusts had spent beyond their means on items such as gaming machines, while the sector generates about $1 billion from pokie machines in New Zealand each year. For organisations distributing regulated funds, the transferable lesson is that clear guidance does not replace accountable governance: records must show that expenditure serves the permitted purpose, and regulators need enough oversight to identify and correct departures.
| Fact | Detail |
|---|---|
| Funds identified | Up to $28 million |
| Funds recovered | $11.5 million |
| Trusts reviewed | 32 |
| Trusts found non-compliant | About three-quarters |
| Potential recovery | About $20 million |
| Review period | 10 years |
| Annual pokie-machine revenue | About $1 billion |
They should have done better.
WHY IT MATTERS
Where regulated organisations must direct money towards community grants, expenditure controls and governance determine whether the intended public benefit is preserved. The DIA’s review also shows the practical role of repayment plans in correcting non-compliance without automatically putting the wider industry out of business.
Reported from rnz.co.nz, 2026-09-12. The Tender Wire is published by Otnox.
