The New Zealand Department of Internal Affairs (DIA) has secured commitments to return an additional NZ$11.5m ($6.7m) to community organisations following an investigation into the country's Class 4 gambling sector.
The regulator found widespread accounting issues among operators, including instances where money that should have remained available for community grants was instead used for society expenses such as purchasing gaming machines.
Work with other operators remains ongoing and the DIA said further funding could be recovered.
Class 4 gambling covers gaming machines operated outside casinos and is classified as high-risk, high-turnover gambling under the Gambling Act 2003.
Corporate societies can operate the machines only to raise funds for authorised purposes, including charitable and other non-commercial community uses.
Societies are required to return at least 40% of net gaming proceeds to authorised community purposes. Gambling-related expenditure, including the cost of gaming equipment, is treated separately from those authorised purposes under DIA guidance.
The investigation has also led to enforcement action against One Foundation. Its operator licence was suspended for six days after the DIA identified accounting failures involving gambling proceeds and a failure to surrender a venue licence when required.
The enforcement comes as spending through the sector remains above NZ$1bn annually. Gaming machine profit reached NZ$271.5m in the June 2026 quarter, up 8.45% from the previous quarter.
Rolling 12-month profit reached NZ$1.05bn, while the number of licensed venues fell to 948 and electronic gaming machines declined to 13,613.
The DIA has separately published new financial compliance guidance intended to clarify accounting requirements for Class 4 operators. Its wider regulatory programme has included updated harm-minimisation guidance and a 2026 consultation on changes to gaming equipment standards.
DIA Director of Gambling, Vicki Scott, said: "We've secured commitments that will return NZ$11.5 million to community organisations, taken enforcement action where it was needed and provided operators with clearer guidance about their obligations."
The regulator has undertaken other enforcement activity involving community gaming funds this year. In February, 23 people were charged with more than 500 offences following an investigation into the alleged misuse of NZ$3.2m in gaming machine grants.
Across the Tasman, pokies regulation has also tightened. New South Wales moved to remove exemptions allowing more than 670 venues to operate gaming machines beyond the state's 4am shutdown, amid increased scrutiny of gambling harm.
Class 4 gaming machine profit reached NZ$271.5m in the June 2026 quarter despite the number of venues and machines continuing their long-term decline
