New Zealand’s gambling regulator says it recently took enforcement action against a local gambling operator for accounting failures relating to gambling proceeds – part of a review of the country’s sector compliance that has helped secure an additional NZ$11.5 million (US$6.7 million) for community organizations.
The Department of Internal Affairs (DIA) revealed Friday it had suspended the license of One Foundation – a company established to distribute grant funding from the proceeds of licensed gaming machines operated under its Class 4 licenses – for six days. This was after identifying accounting failures relating to gambling proceeds and a failure to surrender a license for one of its pokies venues when required by law.
According to the DIA, its review specifically investigated how Class 4 gambling operators, commonly known as pokies trusts, accounted for and distributed gambling proceeds. It found widespread issues across the sector, including cases where money that should have been available for community grants was instead used to cover society expenses, such as purchasing gaming machines.
The DIA noted that its role is to ensure gambling proceeds – which amount to more than NZ$1 billion (US$581 million) annually – are managed lawfully and that communities receive the benefit intended under the Gambling Act.
Aside from the enforcement action against One Foundation, the regulator said it had recovered NZ$11.5 million in funding for community organizations through gambling grants. Work is continuing with other operators, and further funding may still be recovered, it added.
The DIA also hailed the release of new financial guidance for the Class 4 gambling sector, which it says provides greater clarity on accounting requirements and explains operators’ obligations through practical examples – designed to improve consistency across the sector and help prevent similar issues from occurring in future.
“This work has focused on ensuring gambling proceeds are used in the way Parliament intended and that communities receive the benefit they are entitled to,” said Vicki Scott, Director of Gambling for the DIA.
“The investigation has produced significant results. We’ve secured commitments that will return NZ$11.5 million to community organizations, taken enforcement action where it was needed and provided operators with clearer guidance about their obligations.
“Most operators have worked constructively with us to address historical issues and improve their practices.
“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.”
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