Photo by Jane Dawber.
A "money-go-round" linking several southern racing clubs
with a South Auckland pokie bar has been confirmed by the
clubs.
New Zealand Racing Board audits released to the Otago
Daily Times under the Official Information Act reveal
that, of the dozen clubs with a declared direct or indirect
interest in pokies, eight come from Otago and Southland.
The board requested the audits as a condition for granting
betting licences for the clubs of all three codes - harness,
thoroughbred and greyhounds - in an effort to improve the
public perception of racing.
Last year, the Department of Internal Affairs confirmed to
the ODT it was investigating "conflicts of interest"
between some southern clubs following a spike in pokie
grants.
The investigation centred on clubs buying shares in
Auckland-based properties through a third party, which was
then alleged to have returned the pokie proceeds from bars
aligned with those properties back to the clubs.
Christchurch-based lawyer Peter Cordner, who invested funds
from the clubs ranging from $5000 to $85,000, declined to
divulge details about the investments when contacted last
year.
He confirmed none of the club's investments were in pokie
venues.
"The clubs have no interest in any gaming machine."
Audit reports released from the New Zealand Racing Board show
seven thoroughbred clubs - Otago Racing Club, Central Otago
Racing Club, GallopSouth, Waikouaiti Racing Club, Southland
Racing Club, Gore Racing Club and Riverton Racing Club - have
declared a financial interest in a venue housing pokies.
At the heart of those interests is Hagley Trustees No 10, a
trust account operated by Mr Cordner, in which a "syndicate
of owners" have invested, according to the audit reports.
Reports from each club reveal an advance from Hagley Trustees
No 10 went to another company, Chantilly Investments Ltd,
which bought a property in Otahuhu, Auckland.
A venue operator at that South Auckland property ran 18 poker
machines from November 2009 to May 2010, with proceeds
distributed by a pokie trust.
This week, Mr Cordner maintained the club's property
investment had nothing to do with pokies.
"This was a commercial venture, with a commercial rate of
return ... There was no funny business about it."
The clubs had already received substantial repayments from
the investment, with the final accounts in the process of
being completed.
The original Internal Affairs investigation was sparked
following an increase in grants from the pokie trust to the
southern clubs.
An Internal Affairs spokesman declined to comment because the
investigation - one of 23 the department is pursuing - was
"ongoing".
Last year, the department confirmed the investigation centred
on conflicts of interest between the clubs, the venue and the
pokie trust.
Problem Gambling Foundation chief executive Graeme Ramsey
said "on the face of it this does not pass the smell test".
"It looks like it could be a way of exerting influence over
grants."
NZRB interim chief executive Bill Colgan said independent
audits showed there were no issues for the board to address,
and referred questions to Internal Affairs.
How it works
• Clubs band together and invest funds in a lawyer's trust
account.
• Funds are then transferred to another company.
• That company is then used to buy a building, which
typically houses a bar and pokies.
• The pokie trust aligned to that venue then returns funds to
the original investors by way of grants.
- hamish.mcneilly@odt.co.nz
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