Proposed changes around "foolish" rules that regulate spot prizes at community and recreational events have been welcomed by the Problem Gambling Foundation as well as event organisers.

Internal Affairs Minister Chris Tremain is calling for changes to the regulations around the prize draws.

"When spot prizes are used at events, such as fishing competitions and fun runs, they can be classed as gambling under the Gambling Act - which means organisers have to comply with a raft of rules.

"In some cases those rules can be overly rigorous and I want to cut the red tape," Mr Tremain said.

Under the Act if the prize exceeds $500 in value the competition must be run by a society - rather than an individual or a company - and any proceeds from the activity must go to authorised community purposes.

If the prize exceeds $5000 in value the society running the competition needs a licence.

"Organisers say that because the primary purpose of their event isn't gambling and the potential for harm is minimal the requirements imposed are too harsh," Mr Tremain said.

Problem Gambling Foundation chief executive Graeme Ramsey said common sense was needed on the issue.

The gambling risks for people involved in spot prizes was "absolutely minimal", he said.

"We think the current regulations are a bit foolish.

"Anything that encourages families to be together at these events has got to be good by us."

Dave Collard is one of the organisers of the Captain Morgan Snapper Bonanza surfcasting competition at Northland's 90 Mile Beach.

In a week-long competition that ended last Saturday, they offered $130,000 worth of spot prizes.

He said the regulations meant the prizes had to be classed as a raffle.

"That's like putting a square peg into a round hole, it just doesn't go."

The spot prizes were one of the things to encourage people to enter the competition, Mr Collard said.

He embraced any changes that would cut the red tape around the prizes.

Mr Tremain said a discussion document was necessary because changes to spot prize regulations were required.

"I am looking forward to hearing feedback from event organisers and members of the public," he said.

- APNZ

By Rebecca Quilliam Email Rebecca