New Zealand’s Department of Internal Affairs reports that it has secured an additional NZ$11.5 million in community funding after a major compliance review of the country’s pokies sector.
The investigation examined how Class 4 gambling operators, known as pokies trusts, accounted for and distributed gambling proceeds. DIA identified various compliance issues, including cases where funds that should have been available for community grants were instead used to cover society expenses.
The developments include the recovery of additional funding for community organisations, enforcement action against a gambling operator and new financial guidance for enhancing compliance.
Pokies Sector Generates More Than $1 Billion
Pokies are electronic gaming machines typically found in pubs, clubs and other licensed venues. In New Zealand, they are operated under the Class 4 gambling framework, with licensed gambling societies distributing proceeds to community organisations via grants.
According to DIA data, over NZ$1 billion is generated through pokies each year in New Zealand. As a gambling regulator, the agency is in charge of ensuring that gambling proceeds are managed in accordance with the law and that communities receive the benefits intended under the Gambling Act.
However, the compliance review found that some operators had not properly accounted for gambling proceeds. Notably, certain funds that should have been available for community grants were instead used to pay for society expenses, including the purchase of gaming machines.
$11.5 Million Set to Return to Communities
One of the main findings from the investigation was the recovery of funding that can now be directed towards community organisations. DIA said it has collaborated directly with operators to address historical issues and secured commitments to return an additional NZ$11.5 million through gambling grants.
The regulator is also continuing discussions with other operators and promised that further funding could potentially be recovered as the investigation progresses.
It’s a key recovery as the Class 4 gambling system is intended to generate benefits for communities from gambling activity. Ensuring that proceeds are distributed appropriately is therefore a fundamental part of the regulator’s oversight and regulation of the pokies sector.
New Guidance Targets Compliance Failures
DIA has also issued new financial guidance for Class 4 gambling operators, which is designed to provide clarity around accounting requirements and operators’ legal obligations through practical examples. The objective is to improve consistency across the sector and reduce the risk of similar compliance problems occurring in the future, noted the DIA.
The guidance forms part of the regulator’s broader response to issues identified during the investigation. Instead of focusing solely on enforcement, the DIA said it is also seeking to help operators understand their responsibilities and improve their practices.
One Foundation Faces Licence Suspension
The investigation has also led to formal enforcement action against One Foundation, which is a Class 4 gambling society.
DIA administered a six-day suspension of the operator’s licence after discovering accounting failures relating to gambling proceeds. The regulator also found that the operator had failed to surrender a licence for one of its pokies venues when it was legally required to do so.
Vicki Scott, Director of Gambling at the DIA, said the investigation was focused on ensuring gambling proceeds were used as intended by Parliament and that communities received the funding to which they were entitled.
According to Scott, the investigation has reaped significant results, as she pointed to the NZ$11.5 million in commitments, enforcement action and the release of clearer compliance guidance. She added that most operators had worked constructively with the department to address previous issues and improve their practices.
Investigation Remains Ongoing
The regulator will continue to work with operators to identify and recover funding for communities, while also seeking to improve compliance with the rules governing Class 4 gambling.
Scott insists the agency remains committed to maintaining public confidence in the integrity of the gambling system.
The ongoing investigation means additional compliance findings or funding recoveries could emerge as the DIA continues its engagement with operators.
The latest developments underline the regulator’s focus on ensuring that New Zealand’s extensive pokies sector runs within the requirements of the Gambling Act and that gambling proceeds intended for community benefit are ultimately used for that purpose.
Online Casino Market Closer Than Ever
The pokies developments arrive at a time when New Zealand is bracing for the launch of its market for regulated online casinos.
The new framework was established under the Online Casino Gambling Act 2026, which came into effect on May 1, 2026. The government began the first stage of the licensing process in July 2026, which essentially invited operators to submit expressions of interest for one of 15 available licences.
Expectedly, applicants are required to meet financial, ownership and compliance requirements, while the licensing process is scheduled to move to an auction stage in September before full licence applications begin in October.
New Zealand expects the regulated online casino market to launch in early 2027, subject to the completion of the licensing process. Licensed operators will be required to comply with measures covering areas such as age verification, harm minimisation, complaints and record-keeping.
The new market will also give the DIA responsibility for overseeing a newly regulated segment of online gambling, while unlicensed operators that continue targeting New Zealand after the market opens are expected to face enforcement measures. The government has said these can include geoblocking and financial penalties of up to NZ$5 million.
