A complaint from a pokies trust prompted the crackdown. The trust said its business was being undermined by events such as A&P; shows and trade shows that gave away large prizes.
Internal Affairs said fishing competitions were still able to award prizes for catching the most fish, or the biggest fish, because this was regarded as a skill. However, prize draws at tournaments, which involved an element of chance, had to comply with the Gambling Act 2003.
Mr Clark was told by Internal Affairs that his surf-fishing contest did not comply with the legislation.
Mr Clark, who co-owns Eides Sports, said the tournament would need to be associated with a trust or incorporated society and run as a charitable event to proceed.
The contest could be held under the Wanganui Cosmopolitan Club's banner, for example, but that would defeat the purpose of the fishing contest in promoting Eides Sports, he said.
The $40,000 contest was not designed to make a large profit, Mr Clark said.
Each year, all the prizes were given away, so if few fish were caught, they became spot prizes and were drawn under police supervision. The event would not be viable if prizes were held over until subsequent competitions, he said.