New Zealand Regulator Recovers NZ$11.5 Million in Pokies Compliance Probe

Key Points

• The DIA secured commitments to return NZ$11.5 million to community organisations after a two-to-three-year investigation into how pokies trusts handled gambling proceeds.
• Around three-quarters of the 32 trusts examined were non-compliant to some degree, with reporting attributing up to NZ$28 million under scrutiny and approximately NZ$20 million potentially recoverable.
• One Foundation received a six-day licence suspension; the DIA’s auction for up to 15 online casino licences is scheduled for 29 September 2026, with a fully licensed regime expected to be operational in 2027.

Three-quarters of an entire sector found non-compliant. Two to three years of investigation. And the regulator says the work is not done.

Something quietly significant happened in New Zealand’s gambling sector on 11 September 2026. The Department of Internal Affairs announced it had secured commitments to return NZ$11.5 million (US$6.6 million) to community organisations, following a compliance investigation into the country’s class 4 gambling sector. The money had been generated by pokies machines and was legally required, under Section 106 of the Gambling Act 2003, to be applied only to authorised purposes specified in each operator’s licence. Instead, in a pattern found across the sector, it was used to cover society expenses, including purchases of additional gaming machines.

The commitments secured are not yet paid. The investigation is not finished. And the NZ$11.5 million is well short of the total under review.

What the DIA Actually Found?

According to reporting by RNZ, Vicki Scott, the DIA’s director of gambling, told journalists that around three-quarters of the 32 trusts examined were non-compliant with the rules to some degree. The probe had been running for two to three years. The total amount under scrutiny, as RNZ reported, reaches NZ$28 million, with Scott indicating that approximately NZ$20 million could ultimately be recovered. Repayment plans have been agreed with some trusts, while work with others continues.

Class 4 gambling covers non-casino gaming machines, operated by licensed societies whose net proceeds must be distributed as community grants. New Zealand’s pokies sector generates more than NZ$1 billion annually, money that Parliament structured specifically to benefit communities. Scott’s summary of what the DIA found was direct. “Many were essentially prioritising their own growth and their own competitive advantage over the interests of the community. They were spending beyond their means on things like gaming machines.”

Her formal statement put the outcome in stronger terms: “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. We’ve secured commitments that will return NZ$11.5 million to community organisations, taken enforcement action where it was needed, and provided operators with clearer guidance about their obligations.”

One Foundation Suspended; New Guidance Released

Formal enforcement targeted One Foundation specifically. The DIA imposed a six-day suspension of One Foundation’s operator licence after identifying accounting failures relating to gambling proceeds and a failure to surrender a licence for one of its pokies venues when required by law. One Foundation runs gaming machines in hospitality venues, distributes community grants from the proceeds, and is responsible for enforcing responsible gambling rules at its venues.

Alongside the suspension, the DIA released new financial guidance for class 4 operators, providing clarity on accounting requirements through practical examples. The regulator stated the guidance was designed to “improve consistency across the sector and help prevent similar issues from occurring in future.” Scott also acknowledged the sector’s response had not been uniformly resistant: “Most operators have worked constructively with us to address historical issues and improve their practices.”

A Problem That Predates 2026

The issues exposed in September did not emerge suddenly. Newsroom reported in May 2023 that the DIA had expanded a nationwide probe after finding a “disappointing level of compliance” across the sector. All 32 entities were drawn into the investigation, with analysis suggesting the amount in question could already exceed NZ$10 million. Gaming machine proceeds meant for communities were being spent on equipment and used to reduce debt, and a dedicated financial compliance team had already been established to monitor ongoing adherence.

The sector’s own voices offered mixed readings of the situation. Gaming Machine Association chair Peter Dengate Thrush told RNZ that while NZ$28 million sounded significant, spread across the ten-year review period it represented “a very small proportion of the total flow” through the sector. He also said that trusts found to have engaged in deliberate creative accounting should face prosecution, not just repayment. Pub Charity chief executive Martin Cheer acknowledged responsibility more plainly: “These are sovereign entities with governance structures and management. They should have done better.”

Operation Turbo Adds to the Land-Based Picture

The pokies probe is not the only pressure the DIA has applied to land-based gambling this year. In May 2026, an Auckland man was charged on eight counts under the Gambling Act in connection with two allegedly illegal poker venues operating in central Auckland. The investigation, conducted under the name “Operation Turbo,” found venues that had been “masquerading as legitimate businesses” while running commercial poker games over more than two years, with alleged profits estimated to exceed NZ$1 million, excluding untraceable cash and cryptocurrency transactions. The operator also faces a separate theft charge under the Crimes Act, carrying a potential custodial sentence of up to seven years.

Scott’s statement at the time signalled a clear regulatory posture: “Operating illegal commercial poker venues in plain sight, next to other popular hospitality businesses, causes a significant risk to the public. Illegal gambling can lead to financial harm, gambling addiction, as well as exposure to predatory behaviour and criminal activity.”

What the Online Market Transition Means?

This kind of enforcement goes hand in hand with a new era in gambling in New Zealand. With the Online Casino Gambling Act 2026, up to 15 licenses will be issued, one per brand. According to the DIA licensing schedule, the license auction will take place on 29 September 2026, while applications for licenses will open in October. From 1 December 2026, all non-licensed operators must stop their activities in New Zealand.

Entain has confirmed it intends to bid for up to three licences, estimating the New Zealand online casino market could grow to around NZ$920 million. Super Group CFO Alinda Van Wyk said the company would probably apply for three licences as well. Applicants must also demonstrate access to a minimum of NZ$7.5 million in capital.

Expert Analysis

The pokies investigation raises an editorial question worth sitting with: if around three-quarters of the sector was non-compliant to some degree, and the DIA knew this by 2023, what does it mean that the eventual enforcement action landed on a single operator?

We think the regulator made a deliberate choice, and it is a choice worth scrutinising. Scott herself said the department’s role is not to put a significant section of the industry out of business. That is a legitimate regulatory position; ruining the sector would also ruin the community grant model that the Gambling Act was designed to protect. But the recovery-first, guidance-led response also means that trusts which consistently placed their own expansion ahead of community obligations face repayment plans, not consequences proportionate to years of misallocation.

Dengate Thrush’s argument that the NZ$28 million looks smaller spread across a decade is technically fair. Editorially, it is also a framing that protects the industry’s interests rather than the communities that the money was meant to reach. And it sidesteps the point that non-compliance was not a one-off accounting error; it was a documented pattern across the majority of the sector, sustained over years. Whether the new financial guidance changes that, or simply gives trusts clearer language to work around, is something the next compliance cycle will answer. The licensed online regime launching from late 2026 will be watching how that cycle plays out.