New Zealand’s Department of Internal Affairs (DIA) secured commitments worth NZ$11.5 million (about US$6.6 million) to return pokie funds to community organizations after identifying widespread failures in the accounting and distribution of proceeds generated by the Class 4 gambling sector.
The official announcement was issued on September 14, 2026. The review found that some money that should have remained available for community grants had instead been used to cover societies’ own expenses, including the purchase of gaming machines. Under the Gambling Act 2003, net proceeds from Class 4 gambling may only be applied to authorised purposes.
Paul James
The DIA also suspended One Foundation’s Class 4 operator’s licence for six days over errors in the accounting of gambling proceeds and for failing to surrender a venue licence when required. One Foundation, based in Rotorua, was established in 2004 as First Sovereign Trust Limited and is led by Kerry Bird, Chief Executive Officer, and Allan Yeoman, Chief Accounting & Systems Officer.
The market generates more than NZ$1 billion annually. In the 12 months ended June 2026, Gaming Machine Profit reached NZ$1.0512 billion, up 1.58%, with 13,613 machines operating across 948 venues. Between April and June alone, GMP reached NZ$271.5 million, rising 8.45% from the previous quarter.
Brooke van Velden
Class 4 societies must return at least 40% of their gross proceeds excluding GST to authorised purposes. Section 106 of the Gambling Act 2003 restricts the use of net proceeds to those purposes and provides for fines of up to NZ$10,000 for non-compliance. The review was led by Vicki Scott, Director of Gambling at the DIA. The department is headed by Paul James, Secretary for Internal Affairs and Chief Executive, while the responsible minister is Brooke van Velden, Minister of Internal Affairs.
The DIA paired the enforcement action with new financial guidance covering accounting, permitted expenses and the treatment of grant funds, while further recoveries remain possible. In February 2026, the department had already filed charges against more than 20 people over alleged fraud involving pokie proceeds.
