Gambling trusts will have to return more pokie machine proceeds to the community under law changes announced by Government today.

Internal Affairs Minister Chris Tremain said that the gambling reforms would make the non-casino gaming sector more transparent, save industry from compliance costs, and increase funding to the community.

The changes were designed to complement Maori Party MP Te Ururoa Flavell's gambling bill.

At present, gambling societies or trusts which redistributed pokie proceeds had to return a minimum of 37 per cent of this money to sports groups and other community organisations.


Mr Tremain said he had proposed that this threshold increase, initially to 40 per cent and later to between 43 and 45 per cent.

"I know it's possible because many societies are already exceeding this amount. The top six societies average 40.5 per cent pay-out, with one of the top societies paying out 46 per cent.''

For every 1 per cent that this threshold was increased, $7 million more gambling money would be returned to the community.

Gambling trusts could already choose to return up to 67 per cent of pokie proceeds, depending on their management costs.

The reforms would also attempt to stamp out conflicts of interest in the gaming sector, and would give power to the Department of Internal Affairs to cancel gaming licences more easily.

Societies which were well-behaved would be given longer licences as an incentive.

Licences were currently given to pubs and clubs annually, but Mr Tremain said licences could be extended to two or three years.

Mr Flavell said that he was pleased with the new legislation which dealt with issues outside the scope of his Gambling (Gambling Harm Reduction) Amendment Bill.


A select committee this week recommended that the bill be passed into law with significant amendments. The proposed changes prompted Labour and Greens to reverse their support for the bill.

Mr Flavell told media that small steps in the right direction were better than no change at all.

However, he expressed concern about the racing industry's ability to use proceeds from gambling machines for stake money. His bill had proposed ending the racing industry's special status.

Mr Tremain said National could not agree to this law change in difficult economic times because the racing industry employed 15,000 people.

The new legislation would be introduced to Parliament later this year.