Hamilton City Council is supporting a bill to stop trusts distributing gaming machine profits because it wants the funds to be more evenly shared across the community.
The bold move by the city council comes as former Community Gaming Association executive executive director Francis Weaver told the Herald at the weekend that the system was corrupt and needed to be changed.
The city council voted last week to broadly support Maori MP Te Ururoa Flavell's bill to remove the power from gaming trusts which own the machines and instead supported the role to be given to a "local, publicly accountable, democratically selected entity". The council didn't want to run it itself.
The bill also aimed to give more of the proceeds back to the community they came from, improve measures aimed at reducing harm from gambling and give councils power to license all pokie venues, not just new ones.
Councillor Dave Macpherson, who is an anti-gambling advocate, said: "Councillors were saying the system was stuffed and it doesn't deliver the right results."
However, his own views were much stronger.
"There's so many rorts and rip-offs with pokies and people are all self-appointed that run them. I think that's why people are down on them."
There are about 50 self-appointed trusts administering pokie machine proceeds.
Mr Macpherson also felt some trusts were wasting money on directors' fees and administration or competing with other trusts to secure pokie venues, when that money could be put back into the community.
Research also showed that funds were not distributed proportionately with sports and racing receiving more than half of the grants between 2006 and 2012, followed by 20 per cent to other community groups and 10 per cent to education.
Councillor Roger Hennebry said his previous experience running the Waikato FC National League was that it was impossible for some groups to access local money.
"It appeared to me these people in the trusts already had their pet projects. There always seemed to be money going to rugby and not much elsewhere. I think under this new regime we would see more balance."
While Hamilton mayor Julie Hardaker and councillor Peter Bos supported the overall submission, they felt the trusts should continue administering the funds.
Ms Hardaker felt confident the proposed bill would address issues of fairness as more money would have to be granted to the local community.
"Certainly in the past sport has received a lot of contribution from the pokie trust but my observation over the last couple of years is there is a trend moving against that. And I would certainly be more supportive of a more broad-based community approach of distribution as opposed to a specific sport focus," Ms Hardaker said.
Pub Charity chief executive Martin Cheer said Hamilton City Council's submission was the first of about eight he'd seen from local government that supported the bill.
His trust, one of the largest in the country, supported tightening the current regulations in line with the Pub Charity's own policy which required money earned in the community to be given back to the same community and spread across a wide range of applicants.
"At the moment you can drive a truck through the regulations and some take the opportunity to do that. I believe individual performance is a fault, but the system isn't."
WHO GETS WHAT
Where the pokie money goes:
* Sports and racing - 52.72 per cent
* Community - 19.99 per cent
* Education - 10.42 per cent
* Emergency services - 6.32 per cent
* Arts - 3.78 per cent
* Health - 3.74 per cent
* Local government - 1.47 per cent
* Maori - 1.03 per cent
* Faith based - 0.53 per cent
Source: Problem Gambling Foundation, data collected between 2006 and 2012.