Pokie trusts are lining up to return greater cash payments to the community as proposed new gaming legislation puts the entire industry under threat.

Cuts are anticipated to the trustee payments with the amount spent on administration also expected to drop.

The trusts have to return a minimum 37.12 per cent of their income to the community, with a handful providing as much as 63 per cent. But Department of Internal Affairs figures show many fail to rise much above the legal minimum return.

Select committee hearings are expected this year on proposed legislation put forward by Maori Party MP Te Ururoa Flavell. His proposed bill would dismantle gaming trusts, put councils in charge of distributing grants and require 80 per cent of money to go back to the community.


Mr Flavell said the publicity around the proposed bill had led to a great deal of information about their operation being sent to him.

He said there were trusts distributing pokie proceeds which observed the rules but others "would hang themselves on how they operate".

"People have not been shy about what is going on. It is the trusts that are doing the dicey stuff."

Problem Gambling Foundation chief executive Graeme Ramsey said gaming trusts were responding to external pressure by raising the percentage of money returned to the community.

"The Flavell bill is focusing attention by pokie trusts on delivering the maximum back to the community. Why hasn't that been done previously?"

He said the possibility of the gaming system being restructured to cut out trusts provided "an incentive to behave". There had previously been little reason to keep the rules.

Mr Ramsey's comments echoed the view of the DIA's chief regulator Martin Quivooy. In a letter to an informant recently, he said there was a lack of incentive for trusts to obey the law.

One of the country's largest trusts recently announced a boosted public return after two years of intense scrutiny.


The Trusts Community (previously Charitable) Foundation has increased its level of return from 39 per cent to 46 per cent, giving out $17 million in the past year.

Auckland-based chairman Ross Clow recently said reduced administration costs and a new structure allowed it to provide more money to the community.

He refused to say more because the foundation was being audited by the DIA. Previous audits saw the regulatory body raise concerns about payments to trustees, high spending on alcohol and other entertainment including green fees at golf courses.

It has also faced questions over payments to the Otago Rugby Football Union. Lawyers at the sport's central body, the NZ Rugby Union, handed over material to the DIA of information found while carrying out its recent financial rescue.