Trust gives millions in pokie money to racing

The Internal Affairs Department is investigating a Rotorua-based pokie trust that gave $3 million to the racing industry in the last half of last year for what it describes as "marketing".

The First Sovereign Trust, which runs poker machines at 21 bars from Auckland to Christchurch, gave $3 million to racing clubs and only $1.6 million to other groups in the six months to December.

Its chairman, Malcolm Tukino Short, was reported in Truth newspaper yesterday as saying the grants to racing were "a marketing plan to make more money".

"It gets our name out there and there are a lot of punters out there associated with racing and they seem to enjoy connecting with First Sovereign," he was reported as saying.

Internal Affairs gambling compliance director Mike Hill said he received a complaint about the comments yesterday from the Problem Gambling Foundation and would "investigate them thoroughly".

"Section 118 of the Gambling Act forbids gambling operators seeking or receiving any benefits in the distribution of grants," he said.

Problem Gambling Foundation northern regional manager Graham Aitken said pokie trusts could legally give grants to racing clubs, but it was illegal to expect any benefit in return.

Mr Short told Truth that First Sovereign put up stake money for naming rights to prestige races such as the $200,000 First Sovereign Trust Avondale Cup, the $200,000 First Sovereign Trust NZ Stakes at Ellerslie, the $250,000 First Sovereign Trust Telegraph Handicap and $325,000 for the Canterbury Jockey Club's New Zealand Guineas.

Mr Short, who also chairs the Pukeroa Oruawhata Trust which administers Ngati Whakaue tribal land in Rotorua, was reported to have resigned his membership of the Rotorua Racing Club because of the potential conflict of interest with his role on the First Sovereign Trust.

The trust's website shows the trust was established in 2003 "with a primary focus to raise and distribute grants to the racing industry and community".

The trustees, with Mr Short, are retired school principal Peter Anaru of Rotorua and company director Halvor King of Wellington. Mr Anaru could not be contacted and Mr King referred questions to Mr Short.

Internal Affairs statistics show grants from pokie trusts to racing clubs jumped five-fold from $2 million in 2000 to $10 million in 2005 in real inflation-adjusted dollars.

Mr Aitken said the foundation's tracking of published pokie grants showed grants to racing had more than doubled again to $1.8 million a month by the middle of last year, or about $22 million a year.

First Sovereign was the second biggest donor to the industry in the latest period, giving 14 per cent of all pokie trust donations to racing. The biggest donor, giving 32 per cent of all pokie trust grants, was the licensing trusts' Trusts Charitable Foundation.