The newly-formed Racing Integrity Unit (RIU), which received a $318,000 pokie grant, is the subject of a Department of Internal Affairs investigation.
The unit was set up by the three racing codes - thoroughbred, harness and greyhound racing.
That same month, New Zealand Thoroughbred Racing (NZTR) applied for $388,778 from the Trusts Charitable Foundation for "funds required for the racing integrity unit" from March 1, 2011 to May 30, 2011.
Later that month, NZTR received $318,346 for the unit, despite an initial pledge it would be fully funded by the racing industry.
Chief executive Bill Colgan, of the New Zealand Racing Board, which along with the three codes has a 25% stake in the RIU, said the unit would be fully funded by the NZRB from this month.
He confirmed grants from gaming societies were not permitted under the unit's constitution.
Mr Colgan said racing clubs could apply for pokie grants to cover costs in controlling and conducting race meetings.
"If such a claim were to include its cost of funding the RIU, the RIU itself would not be aware."
The Department of Internal Affairs confirmed to the Otago Daily Times an investigation had been launched.
