A former Dunedin-based poker machine trust is threatening legal action after a claim by the Department of Internal Affairs it did not return sufficient funds to the community.
Internal Affairs issued a statement yesterday announcing Caversham Foundation Ltd had surrendered its licence to operate poker machines.
"This follows an earlier proposal to cancel the licence because Caversham had failed to generate sufficient funding for the community and its gambling operation was not financially viable," the statement said.
Caversham Foundation director Dr Wayne Morris told the Otago Daily Times he was "disgusted" by the announcement.
"That is a very twisted version of the events."
Dr Morris said the trust was being wound up and having its venues and pokies transferred to Four Winds Foundation, of which he was also a director.
He had engaged the services of a lawyer to correct the department's assertion Caversham had failed to generate sufficient funds for the community, and he would take Internal Affairs to the State Services Commission if it was not corrected.
"The foundation had given tens of millions away to the community ... and to have this sort of slur on us at the end when we have merged with another trust is scandalous, mischievous and misleading," he said.
The department said the decision to surrender the licence followed an earlier Internal Affairs proposal for Caversham to cancel its licence.
The trust was licensed to operate pokies at 48 venues in June 2005, but at the time of surrendering its licence it had only one venue - the Buffalo Club in Queenstown - with one pokie.
In the year ending March 31, Caversham recorded a surplus of $90,000, or 8% of its gross take from its pokies, to redistribute to the community; short of the 37.12% required under the Gambling Act, it said.
Internal Affairs acting gambling compliance director Debbie Despard said the financial forecast indicated the trust had insufficient proceeds to cover operating costs, let alone provide a community return.
But Dr Morris said for the year ending March 31, Caversham distributed more than 37.12% of its takings: of total pokies proceeds of $1,103,419, community grants of $416,561 were made.
Internal Affairs declined to comment further last night.
Caversham Foundation was the subject of a 2007 Internal Affairs audit report which raised concern about its viability.
In 2008, the foundation reduced its operation from 452 machines in 39 venues to 148 machines in 13 venues to meet debts, and was issued a conditional licence.
Problem Gambling Foundation chief executive Graeme Ramsey said the report showed the Foundation had a questionable past.
"That report raised a large number of issues and the Department of Internal Affairs signalled that there would be ... investigations that would follow. We would hope those investigations would continue even if the trust was wound up."
