The biggest pokie charity in the country is rejecting funding applications from Anglican-linked organisations because a branch of the church spoke out against gaming machines.
The edict by Pub Charity - which pulls in $74 million from pokies - emerged in a rejection letter to an application by the Christchurch Cathedral.
The cathedral was seeking $235,000 for its rebuild but was told "the Anglican Church has indicated its opposition to gaming funds" and funding was refused.
The Anglican Church is led by the General Synod which allows freedom to linked organisations to make their own decisions on many ethical areas - including applying for gaming funding.
But Pub Charity chief executive Martin Cheer said a submission by an Anglican body seeking pokie reform was a factor. He then wrote to the Anglican leadership group demanding it take a position nationally on the issue.
He said the refusal to do so - while still making applications - highlighted the church's hypocrisy and leadership failures. "You can't have it both ways. You can't actively campaign to get rid of something then apply for money from it."
He cited a submission to Parliament on legislation which was believed to impact on the pokie industry. Mr Cheer said the organisations wanting funding should talk to church leadership.
He said he rejected the church's position allowing independence to member groups to apply for pokie funding.
Christchurch-based Anglican Life social justice worker Jolyon White - who works with problem gamblers - was the person who made the submission to Parliament, which included expressing fears his view might impact on others.
He said he was saddened it had and described Pub Charity's position as "bullying". His group, like others in the church, did not speak for the entire church. "Every group makes its own decisions."
The church's general secretary, Michael Hughes, said he had written to Mr Cheer to explain the structure of the church, which allowed its 12 dioceses to make their own choices on issues. "I said he would need to approach the dioceses."
Maarten Quivooy, Internal Affairs' regulatory services general manager, said pokie trusts were governed by strict rules about who received money.
"The department considers that community organisations should be able to apply for funding from class 4 gambling societies in the expectation that their applications will be considered without consideration of their affiliations or views."
SkyCity deal criticised
The Government's deal with SkyCity has been criticised by an international government watchdog.
Transparency International's "integrity" review of New Zealand said public facilities like the convention centre should be paid for with public funds.
It noted the construction cost would be carried by SkyCity in trade for relaxed gambling laws which allow the casino to cover its building cost.
"The centre will in effect be financed by gamblers and their families," said the report.
Transparency International's aims include showing "ethical, transparent, and corruption-free practices".
Its latest report on the New Zealand branches of state has been highlighted by the Green Party ahead of this Sunday's deadline for a deal between SkyCity and the Government.
The Greens have pledged again to roll back the 35-year compensation pledge in the deal, which will see the Government swap a special law with gambling concessions for the $400 million cost of building the International Convention Centre.
A spokesman for Economic Development Minister Steven Joyce dismissed concerns about transparency - saying the Office of the Auditor-General had ruled that the final selection of SkyCity was not influenced by any inappropriate considerations.