Eight people have been charged by the Department of Internal Affairs over a corruption network involving electronic gaming machines in venues in Hawke’s Bay. Those charged were in management positions across multiple colluding organisations, including venues, charities and grant beneficiaries. The director of the gambling department within the DIA denounced the corruption, saying it tainted the entire industry.
High-Level Corruption
The DIA did a long-term investigation before closing down on the corruption ring. It is believed that those charged have solid evidence against them, linking them to the ring. All eight involved were in management-level positions in Class IV gambling venues (venues with pokies, other than casinos), corporate societies involved in pokies grants, or grant recipients themselves.
Various charges have been laid against the accused. The eight organised grant applications for false purposes, using the grant money for their own benefit, rather than for the reported purpose. The collusion charges indicate that some in the Corporate Societies (registered charities) knew of the false applications and approved the grants anyway.
Though the members of the Hawke’s Bay pokies corruption ring (The Hawke’s Ring) have not been named, there are few charitable societies involved in gambling money grants in the region. Some of those charged had to have been in one or more of the following registered societies:
- First Light Community Foundation
- Four Winds Foundation Limited
- Grassroots Trust Central Limited
- New Zealand Community Trust
- One Foundation
- Pub Charity Limited
- TAB New Zealand
- The Lion Foundation
- The North and South Trust
- Trusthouse Foundation
- Youthtown Incorporated
Theft and Mismanagement
Charges against the eight also include stealing money directly from the pokie machines, as well as organising for the machines to not be monitored or regulated correctly. Some of those charged organised for the pokie machines to be unsurveilled, so that coins and notes could be removed and stolen from the machines.
The Hawke’s Ring got greedy. Some couldn’t wait out the long-term illegal project, to go through the whole multi-month grant application process. Some had to get their hands on the money straight away. This was most likely their undoing. The record-keeping associated with pokie machines is difficult to interfere with. Authorities are notified regularly through software about how much money is put through the machines. When the tallies didn’t match, it would have flagged authorities to investigate.
The chain of custody would have shown which managers were involved. It would have been easy to see what else those managers were involved with, including grant application processes. From there, links of association would have been carefully peeled away, to where the DIA now has solid cases against the eight charged.
Three have gone to court in Napier, but only one has pleaded not guilty. The two others did not put in a plea and are staying remanded in custody until a further date has been set for their trial. The rest of the eight go to court over the next few months.
The Director of gambling for the DIA, Vicki Scott, said,
“Criminal networks that operate in a regulated environment such as class 4 gambling … ultimately take away grants from compliant and honest organisations and give the Gambling Sector a bad name.”
Venues are Pushing for Profits
In New Zealand, Gaming Trusts are the only organisations that are allowed to own and operate pokie machines. These Trusts must direct the revenue gleaned from electronic gambling machines (EGMs) only toward funding community initiatives or toward running the machines and the gaming lounges they exist within. Venue operators are not allowed to take profits for themselves.
Recently, industry group Hospitality NZ proposed that the law be changed so that venue operators could take a percentage of profits. It seems that those involved in the Hawke’s Ring corruption believed the same, taking the law into their own hands. Those involved in the Hawke’s Ring were all identified as knowing that what they were doing was against the law.
Hospitality NZ also lobbying for authorised funds to be allocated to entities or people outside of the venue. Currently venues are allowed to hire in contractors to perform updates, software installations and maintenance on the machines and to the location they are in. Class IV venues are already allowed to allocate authorised funds to outside entities. This requirement from the lobby group has therefore raised eyebrows, as it has implied the desire to profiteer.
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