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Corrupt behaviour in the pokies sector was "all pervasive and pernicious", a damning report from a former industry association head alleges.
Released to the Otago Daily Times under the Official Information Act, the report recommends wholesale changes to prevent "endemic non-compliance" in the sector, which had a turnover of $856 million in 2010-11.
Former Community Gaming Association chief executive Francis Wevers told the ODT he stood by the report he sent to the Minister of Internal Affairs in January last year.
"My views haven't changed ... I think something needs to be done and what I have proposed is what I consider quite a simple and elegant solution. I just hope the Government does something to address it."
His five-year involvement in the industry prompted him to write the 15-page report, which notes, for some in the [non-casino pokies] sector "the motivation to continue to operate unlawfully is more powerful than the motivation to comply".
Decisive action by the Department of Internal Affairs or the Government was needed to address corruption in the sector, and to stop organisations and key people from capturing pokie grants at the expense of others.
Being seen to do nothing about the corruption in the sector was not something the Government could allow to continue, the report notes.
Mr Wevers confirmed he met former Internal Affairs minister Nathan Guy to discuss his report; Mr Guy expressed interest but said there was "no room in the parliamentary agenda to do major reform in the gambling sector last year".
Amy Adams, who will relinquish the Internal Affairs portfolio to Chris Tremain, told the ODT last month she would be "giving consideration" to possible changes to the gambling sector.
Earlier this week, the ODT reported the Government was committed to supporting the Maori Party's Gambling (Gambling Harm Reduction) Amendment Bill to select committee stage.
The report, "Options For Change in the Class 4 Gambling Sector", singled out the racing industry and some major sporting codes as being able to secure "large, regular and ongoing streams" of funding.
It said pokie trustees tended to support causes and groups for which they had personal empathy.
Competition between pokie trusts was such that they had found "numerous and ingenious ways to entice venues to leave existing relationships".
Inducements offered to pokie venues include free tickets to sporting tickets, venue fitouts, cash payments and ensuring their favourite cause or community group received funding.
"Boards and managers of societies, knowing that their activities are unlawful, weigh the risks and costs of being caught and determine the consequences are light compared with the potential loss of key venues and the revenue that goes with them," the report alleges.
"The corrupt behaviour has been all-pervasive and pernicious."
The solution for the sector was for major structural change to remove incentives and opportunities for inappropriate behaviour, the report notes.
A possible solution was to introduce a licensing regime for a defined geographical area, such as Otago-Southland, which would give exclusive rights to use pokies to fundraise for each licensed area.