The Department of Internal Affairs is investigating nearly $1 million of donations made by a poker machine charity to horse-racing clubs around the country.
The Auckland-based Trillian Trust gave $5.3 million to community groups last year, including more than $900,000 to racing clubs.
Internal Affairs deputy secretary Keith Manch said
the funding of racing was not covered by the trust's gambling licence or by charity rules.
He said staff had been in touch with the trust and would talk to key members.
However, trust chief executive Dean Agnew said the department had contacted him only yesterday - just hours before the $600,000 Trillian Trust Auckland Cup harness race was held at Alexandra Park.
Mr Agnew said the trust had donated to horse-racing clubs since it was licensed to distribute grants in 1999.
"We're more than happy to answer the questions as it's in our best interests to comply with the rules," he said. "It's not like we've hidden our grants to racing under the carpet."
A Weekend Herald search of the trust records for the last financial year shows the Cambridge-Te Awamutu Harness Racing Club received $382,000.
A further $185,000 was donated to the Auckland Trotting Club, $60,000 to the Invercargill Harness Racing Club, $60,000 to the Manukau Trotting Club and $80,000 to the New Zealand Metropolitan Trotting Club.
Horse-racing clubs from Manawatu, Riverton, Thames, Riverton and Winton all received donations of less than $25,000.
Mr Agnew said the authorised purpose of the trust, which determines what organisations can receive grants, was written 10 years ago and was "quite broad".
"I'm guessing this is more about semantics than anything. If we have to make a change to exclude racing, then so be it. If it's wrong, we'll fix it."
The trust distributes money from gaming machines and must give most of its earnings to community groups. Major beneficiaries included Surf Life Saving New Zealand, Auckland Coastguard, St John Ambulance, Eden Park Trust Board, Variety Children's Charity, Auckland City Football Club and schools.
