Bluegrass out of time: commission

A pokie trust established to fund the racing industry has been shut down following revelations a racing identity covertly manipulated grants.

Yesterday's decision by the Gambling Commission confirmed a 2012 decision by Internal Affairs to cancel the licence of Bluegrass, a Blenheim-based pokie trust.

In a 33-page decision, the commission said the trust provided false and misleading information to Internal Affairs about its funding and those involved, including the role of harness racing identity Mike O'Brien.

The decision noted ''documentary evidence indicating that Mike O'Brien covertly exercised influence over the society's grants and operation''.

Mr O'Brien, speaking from Bangkok where he is honeymooning, told the Otago Daily Times yesterday he was not aware of the decision and had no comment to make.

The ODT last year reported Bluegrass was caught up in a major joint agency investigation, involving Internal Affairs, police and the Serious Fraud Office, with search warrants executed and computers seized.

Industry sources confirmed the investigation dubbed Operation Chestnut, which identified key people involved in the manipulation of gaming machine grants, overlapped with yesterday's decision.

Internal Affairs acting director of gambling compliance Raj Krishnan said ''Bluegrass' deliberate and repeated efforts to deceive the Secretary [of Internal Affairs] was intolerable''.

''There is not room for such behaviour in the gaming sector and we are pleased that those involved will now need to move on.''

The commission also noted Bluegrass was open to being influenced by venue operators - namely the pubs where its pokie machines were based.

The Bluegrass website was offline yesterday.

Internal Affairs said the trust's 144 machines in eight pubs around the country had to be turned off on August 18 when the licence was cancelled.

Those machines are likely to be sold to another gaming trust.

In 2012, the ODT reported Bluegrass Trust was the biggest pokie funder of the southern racing industry, despite having no venues in Otago and Southland.

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