Gambling inspectors and police raided a Hamilton tavern on Sunday, where it was thought an illegal poker tournament was being held.
Internal Affairs department acting director of gambling compliance Debbie Despard said a search warrant was executed after it was discovered a tavern was allegedly conducting illegal poker games.
Atthe time of the search 28 people were discovered playing Texas Hold 'em poker in the tavern.
"It is illegal to run poker tournaments where the prize money exceeds $500 or for an organiser to retain a percentage of the turnover as a commission," Ms Despard said.
"It is also illegal to allow your venue to be used for illegal gambling. These are offences under the Gambling Act that are punishable by a fine of up to $20,000 or a year in prison."
Ms Despard said the department had been told owners of some other taverns had been running illegal poker games.
"They need to be aware that the Internal Affairs will investigate and will prosecute if offences have been committed. If they have gaming machines at their venues, they should also realise that this is likely to make them unsuitable to be involved in running the machines."
Participants in illegal poker tournaments potentially face fines of up to $1000.
Ms Despard said people could organise poker tournaments that were legal as long as the amount of money played for was $500 or less and all winnings were paid out to participants. Societies could also conduct poker tournaments as fundraising activities subject to certain rules.
"It is illegal, however, for a third party organiser to 'clip the ticket' or to allow funds to accumulate without limits, both of which were suspected in the case in Hamilton," she said.
The rules for running gambling activities can be found on the Internal Affairs' website.
The department was still investigating the incident at the weekend and was still to decide whether charges would be laid.
