New Zealand Suspends One Foundation License Over Pokies Fund Failures

New Zealand’s Department of Internal Affairs, or DIA, has suspended the license of charitable gaming trust One Foundation for 6 days after identifying accounting failures involving gambling proceeds.

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The action was announced on Friday as part of the regulator’s wider review of compliance in the country’s Class 4 gambling sector. One Foundation was established to distribute grant funding from the proceeds of licensed gaming machines operated under its Class 4 licenses.

According to the DIA, the suspension followed findings related to how the trust accounted for gambling proceeds. The regulator also found that One Foundation failed to surrender a license for 1 of its pokies venues when it was required by law.

The enforcement action forms part of a broader examination into the way Class 4 gambling operators account for and distribute proceeds from gaming machines.

Review Identifies Sector-Wide Problems

The DIA’s review focused on Class 4 gambling operators, commonly referred to as pokies trusts. These organizations are responsible for managing proceeds from licensed gaming machines and distributing funds through grants to community organizations.

The regulator found widespread issues across the sector. In some cases, money that should have been available for community grants was used instead to cover society expenses.

These expenses included the purchase of gaming machines. The DIA said its role is to make sure gambling proceeds are managed lawfully and that communities receive the benefits intended under the Gambling Act.

More than NZ$1 billion, or US$581 million, in gambling proceeds is generated annually. The review was intended to assess whether this money was being managed and distributed in accordance with the legal requirements for the Class 4 gambling sector.

The findings showed that accounting and distribution practices needed further attention. The action against One Foundation was taken after the regulator identified failures specific to the trust’s handling of gambling proceeds and its venue license obligations.

NZ$11.5M Recovered for Communities

Aside from the enforcement action against One Foundation, the DIA said it had secured NZ$11.5 million, or US$6.7 million, in funding for community organizations through gambling grants.

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The amount was recovered as a result of the review and commitments secured from gambling operators. The DIA said that work with other operators is continuing, meaning additional funding could still be recovered for community organizations.

The regulator stated that the review has already produced significant results by returning money to communities, taking enforcement action where necessary, and addressing historical issues within the sector.

Vicki Scott, Director of Gambling for the DIA, said the work has focused on ensuring that gambling proceeds are used in the way Parliament intended and that communities receive the funding they are entitled to receive.

She stated that the review has secured commitments that will return NZ$11.5 million to community organizations. The regulator has also taken action against operators where required and issued clearer guidance on their responsibilities.

New Financial Guidance Released

The DIA also announced the release of new financial guidance for the Class 4 gambling sector.

The guidance provides greater clarity on accounting requirements and explains the obligations of operators through practical examples. It is intended to improve consistency across the sector and help prevent similar problems from occurring in the future.

The new material is expected to assist Class 4 operators in understanding how gambling proceeds should be accounted for and distributed. The DIA said the guidance is part of its effort to improve compliance and address the issues identified during the review.

Scott said most operators had worked constructively with the regulator to resolve historical problems and improve their practices.

The regulator’s approach combines enforcement action, recovery of funds, and further guidance for operators. This is intended to ensure that gaming proceeds are used lawfully and reach the community organizations that are meant to benefit from Class 4 gambling grants.

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Source: Inside Asian Gaming