Marlborough-based gaming machine trust Bluegrass Trust was an example of a gambling "money-go-round" that he had attempted to stop through legislation, Maori party co-leader Te Ururoa Flavell says.
The Gambling Commission confirmed the Department of Internal Affairs' decision to cancel the trust's operating licence, saying it obtained its licence to operate pokie machines by deception.
Bluegrass provided false and misleading information to the department about its funding, those involved in the society and the role of Blenheim man Mike O'Brien in particular, the commission said in its decision.
"Bluegrass' deliberate and repeated efforts to deceive the Secretary [of Internal Affairs] were intolerable," department acting director of gambling compliance, Raj Krishnan, said.
The trust said it was considering appealing the decision.
O'Brien is well known in the harness racing community and is the son of Patrick O'Brien, former chairman of Harness Racing New Zealand and former chairman of Bluegrass.
It primarily provided grant money to the racing sector - in its March 31, 2014 year return of its total donations of $5m, more than $4.1 million went back into the horse racing industry, to clubs throughout New Zealand.
Bluegrass Holdings was incorporated in June 2009 and traded as Bluegrass Trust, operating 140 gaming machines in eight venues across New Zealand, including the Criterion Hotel in Blenheim.
The trust's licence will be cancelled from August 18. The commission decision comes after a two-year process between Bluegrass Holdings and Internal Affairs.
Maori Party co-leader Te Ururoa Flavell has been championing for change in gambling laws.
In 2010 his Gambling Harm Reduction member's bill was pulled from the ballot, and last year, after it was "watered down", parts of it were used in the Gambling (Gambling Harm Reduction) Amendment Act 2013.
Flavell wanted to cut out racing and racing-stake money as an authorised charitable purpose, but the Government disagreed. It deemed the changes would have too much of a negative impact on the racing industry.
Flavell said the horse racing industry lobbied heavily against the bill, and there was a lot of scaremongering from pub charities, which said the bill would take money from the community.
"What this case [Bluegrass] high lighted, was that the rorts were able to happen within the industry. You can pay off yourself or set up a trust basically as a money-go-round.
"That is why I introduced the legislation to stop that.
He said it seemed an "anomaly you take money from one form of gambling and move it to another, that keeps it alive".
Flavell said most pokie machines were placed in poorer areas.
However those who gambled at the races often had "a little bit more money in their pockets". Fairfax NZ
- The Marlborough Express
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