Racing board probed over pokies grants

01:12, Nov 03 2013

The New Zealand Racing Board is being investigated by the Department of Internal Affairs for a possible breach of the Gaming Act.

A pokie machine grant of $318,000 to pay for the Racing Integrity Unit, which polices the racing industry, is being examined after a complaint was lodged with Internal Affairs and the Serious Fraud Office by outspoken racing trainer and publican Leo Molloy.

Molloy said he'd sat on the information for two years but the racing industry had refused to listen to him, so he felt he had no choice.

Molloy has supplied a file to Internal Affairs which suggests the NZRB - owner of the the TAB - may have breached sections 113 and 118 of the Gaming Act.

As owner of venues that host pokie machines, the racing board cannot apply for grants from the trust that owns those machines.

But it is a co-owner, along with the three racing codes, of the RIU, and the Sunday Star-Times has obtained an email from a senior NZRB employee encouraging the three codes to apply for grants to pay for the unit.


A grant of $318,346.70 was subsequently made by The Trusts Charitable Foundation, a controversial pokie trust that had machines in multiple TABs.

Internal Affairs gambling compliance director Debbie Despard confirmed the department's investigations unit was studying the grant.

In a statement, the NZRB said it was aware of the inquiry and had "co-operated fully".

In the file sent to Internal Affairs is an email from NZRB senior analyst Martin Burns on January 27, 2011, to a group of racing industry executives.

It explains how the RIU will bill the codes for its services, and says it will structure the bills so that "this will allow each code to use these industry costs as a basis for grant applications".

In July, 2011, NZRB's then-acting chief executive Bill Colgan, one of the email recipients, said pokie grants weren't allowed under the unit's constitution, and told the Otago Daily Times that if the codes had applied for pokie grants, "the RIU itself would not be aware".

When asked this week about the email, Burns said: "I am aware of the investigation, but it is not for me to comment . . . the DIA are aware of the email, there is nothing I should add."

A lawyer with knowledge of gaming issues said action against the TAB might be difficult, as it could be argued the RIU was a separate body. Quarter ownership was not a controlling influence, and the grants were going to a reasonable cause, the lawyer added.

TTCF general manager Warwick Hodder could not be reached for comment.

The New Zealand Racing Board said they believed it was New Zealand Thoroughbred Racing that was being investigated and it was providing assistance to that investigation. Internal affairs would not comment on what organisation was being investigated.

Sunday Star Times