Ban on harness racing club grants confirmed

28 May 2010

Gaming machine societies Lion and Perry Foundations have now decided not to contest an Internal Affairs Department decision which prevents them from granting pokie funds to four northern harness racing clubs. A third society, Infinity Foundation, is still considering its position.

Last November the Department imposed the gambling licence condition on Lion, Perry and Infinity Foundations preventing them from making grants to the Thames Harness Racing Club and the Manukau, Kumeu and Franklin Trotting Clubs. This followed an investigation into the grant application process, flow of funds and the relationship between the societies, trotting clubs and Northern Hospitality Management Ltd, which operated at seven venues where the societies involved had gaming machines. The investigation showed that while grants to the four clubs totalled about $400,000 up to 2005, between 2006 and December 2008 they received over $5.4 million.

Gambling Compliance Director Mike Hill said the Department considered the grants were inconsistent with sections 113 and 118 of the Gambling Act 2003, which make it clear that decisions about gaming machine grants should be transparent, free from conflicts of interest or conditions.

“The societies lodged an appeal with the Gambling Commission against the condition, assuring us of no wrong-doing,” Mike Hill said. “We are pleased they have now recognised the legitimate concerns of the Department and Lion and Perry have told us they will withdraw their appeals.

“The Department's concern was not that funding was going to racing purposes but that arrangements have been entered into to capture the funding.

“Any moves that seek to capture funding flows from pokie machines are rorting the system and the Department is working strenuously to expose them. We want to ensure community groups have fair access to gambling-generated community funds and there are several investigations under way involving similar such arrangements.

”While Lion and Perry still don’t acknowledge any wrongdoing, the Department will continue to closely monitor the sector and will prosecute where there is evidence of a breach of the Act.”

The Department has yet to make a decision on a proposal to impose a 21-day suspension of gaming machine operations at the seven venues operated by Northern Hospitality, Mike Hill added.

Media contact:
Mike Hill, Gambling Compliance Director, Department of Internal Affairs
Ph 04 495 9449; cell 021 979 427

Trevor Henry, communications adviser, Department of Internal Affairs
Ph 04 495 7211; cell 0275 843 679