Problem Gambling calls for heads to roll

The Problem Gambling Foundation of New Zealand (PGF) says gaming machine trustees should be prosecuted for spending hundreds of thousands of dollars outside their ambit.

The Gambling Commission yesterday upheld decisions by the Secretary of Internal Affairs to suspend the licence of Dunedin-based The Southern Trust (TST) for five days, and increased the licence suspension of The Trusts Charitable Foundation (TTCF) from two days to six.

Both operate nationally - with TST having 89 venues with 954 gaming machines and the Levin-based TTCF, 74 venues with 893 pokies.

TST's licence was suspended for spending about $190,000 on four venues, including $26,000 on Mermaids strip bar in Wellington, and for paying $40,000 in brokerage fees for securing agreements with a venue operator.

The trusts told the commission they felt compelled to compete with each other to maximise proceeds and ensure their financial survival.

But the PGF believed that the trustees of TTCF should be prosecuted.

The TTCF suspension arose from the payment of about $468,000 in fees and expenses to a company operated by one of the trustees to persuade desirable venues to sign with the foundation, rather than other societies.

This was in addition to the trustee's annual honorarium of $20,250.

PGF chief executive Graeme Ramsey said trustees must be held individually accountable when they have been clearly shown to have acted inappropriately with public money.

The $18,000 spent over 17 months by TTCF on entertainment expenses for trustees, the majority of which was for food and alcohol, was an excessive amount for just five trustees, he said.

"The trustees have fed off the misery of others and should be made to pay the money back. There are lots of community groups for whom this amount of money would have made a massive difference," Mr Ramsey said.

"That $500,000 should have gone to community groups. That such a huge sum of money was paid to a trustee or his company is 'gobsmacking'."

Mr Ramsey questioned how New Zealanders could trust the trusts, when the Department of Internal Affairs said 30 of the country's 50 trusts had similar issues of non-compliance.

"The number of snouts in the trough of this public money is shameful. This is money that is supposed to be going to community purposes not into the pockets or stomachs of trustees."

"Money which should have gone to a local kindergarten has been spent on 'tarting up' the Mermaids Strip Club on Courtney Place," he said.

Yesterday TST chief executive Karen Shea told NZPA suspension would take $370,000-$400,000 off TST's top line, meaning it would have up to $160,000 less to redistribute to the community.

Suspension came out of a grey area "that has been fought for a little while", she said.

Other societies were in a similar situation, and would be taking careful note of what had happened as TST had been among the first audited, she said.

TST had no intention to do wrong, no one had gained personally, and was still not sure exactly what the rules were, she said.

"The commission has said that we haven't acted in any exceptional way," she said.

The sector and Internal Affairs had to discuss "what is and what isn't exceptional. The legislation probably needs a bit of a review", she said.