This article was published today (20 August 2026). I have prepared this press release as a response (with a little help)
The Department of Internal Affairs’ largest-ever gambling prosecution should be a catalyst for a much broader rethink of how New Zealand monitors the $340 million pokie grant system, says independent grant analyst Bridget Frame.
Operation Indago has resulted in 23 people facing more than 500 charges following an investigation into six charities and incorporated societies allegedly used to obtain $3.2 million in gambling grant funding for personal gain. DIA describes the investigation as “mammoth and complex”.
The allegations are serious. But for Frame, who has spent more than a decade analysing publicly available pokie grant data, the bigger question is why New Zealand is relying on major investigations to uncover problems that may be identifiable much earlier through better use of data.
“The question isn’t whether DIA should investigate fraud. Of course it should. The question is whether we can get better at identifying the warning signs before we need a major investigation at all.”
The data is already telling us where to look
New Zealand’s pokie grant system is unusually transparent in some respects. Grant-making data is publicly available, as are charity and incorporated society records, financial accounts and information about gambling venues.
Yet these datasets largely sit in separate places.
Frame’s own analysis has found a range of indicators that could be used to identify organisations requiring additional scrutiny.
These include:
None of these indicators proves wrongdoing.
That is precisely the point.
They are risk indicators that could allow a grant-maker or regulator to ask better questions before money is distributed — rather than discovering problems after millions of dollars have been paid out.
Frame has been using publicly available data to do exactly this kind of analysis for years, including benchmarking organisations against one another and examining relationships between grant recipients, grant-makers and venues. More recently, this has included building a database of venue ownership and company relationships because the information required to assess those relationships is not readily available in one place.
We shouldn’t need to be detectives
“The frustrating thing is that much of this isn’t particularly sophisticated,” says Frame.
“With a decent database and some sensible rules, you can identify organisations that look unusual and then have a human look at them.
“You don’t need to accuse anyone of anything. You simply need to ask: is this normal?”
That is particularly important in a system distributing hundreds of millions of dollars.
In 2025, Class 4 operators distributed approximately $340 million to New Zealand community organisations, while Government received around $300 million in gambling taxes and duties. There were more than 42,000 grant applications involving approximately 9,700 organisations.
At that scale, relying primarily on manual assessment and complaints is not an efficient risk-management strategy.
Prevention is cheaper than investigation
Operation Indago demonstrates the potential consequences of discovering problems late.
The investigation involved six organisations, 23 defendants and more than 500 charges. DIA describes it as its largest-ever prosecution.
The cost is not simply the $3.2 million allegedly obtained improperly.
There is the cost of investigation, prosecution and court processes. There is the regulatory time involved. And, most importantly, there is the opportunity cost to the communities that could otherwise have received the money.
“We shouldn’t measure the cost of fraud only by the amount that was taken,” says Frame. “We should also ask what it costs us to discover it after the event.”
A relatively modest investment in proactive data analysis could therefore pay for itself many times over.
The pokie system actually has some things going for it
This is not an argument for dismantling pokie funding.
In fact, one of the things that stands out from Frame’s analysis is that pokie grant-making has some significant advantages over other parts of New Zealand’s grant ecosystem.
It is relatively fast, reaches a very broad range of community organisations, has relatively simple application processes and operates with a high-trust model.
Those are worth preserving.
The problem is that high trust needs good risk management sitting underneath it.
Frame estimates the wider New Zealand grant-making ecosystem costs around $260 million a year. The objective should therefore be to improve integrity without simply adding another layer of administration to a system that already performs relatively efficiently.
From reactive enforcement to proactive risk management
The answer is not necessarily more people reading more applications.
It is better information.
A national risk-monitoring framework could bring together existing information about:
This could generate risk flags for further human review.
It could also allow grant-makers to benchmark recipients against comparable organisations.
That matters because a grant isn’t necessarily suspicious simply because it is large.
It may become interesting when it is large relative to the size, activity, income or characteristics of the organisation receiving it.
That is an area where benchmarking can be particularly useful.
Frame has previously used this approach to examine grant funding across sports and community organisations, including comparing grant funding with measures such as membership, activity and income.
An opportunity to modernise the system
The current investigation provides an opportunity to move beyond a cycle of complaint, investigation and prosecution.
There are three practical changes that could make a difference:
1. Introduce risk-based monitoring
Use existing grant, charity, company and venue data to identify unusual patterns and relationships for further review.
2. Improve information sharing
Create a more complete picture of organisations, people, grant-makers and venues rather than assessing each grant application in isolation.
3. Introduce independent oversight where significant concerns arise
Where credible concerns are raised about a grant-making process, an independent observer could provide additional assurance around proceeds committee decision-making.
These measures could strengthen the system without turning every grant application into a compliance exercise.
Protecting the money — and the system
New Zealand has effectively created a very large community funding mechanism through the gambling system.
The public has a legitimate interest in knowing that the money is going where it is intended, that grant-makers are making sound decisions and that organisations receiving funding are operating appropriately.
“The majority of pokie funding goes to legitimate community organisations doing good work,” says Frame.
“That’s exactly why we should be serious about protecting the system from the people who want to exploit it.”
Operation Indago shows that enforcement can find serious problems. The next step is making sure we get better at finding the warning signs before we need Operation Indago.
ENDS
The Department of Internal Affairs’ largest-ever gambling prosecution should be a catalyst for a much broader rethink of how New Zealand monitors the $340 million pokie grant system, says independent grant analyst Bridget Frame.
Operation Indago has resulted in 23 people facing more than 500 charges following an investigation into six charities and incorporated societies allegedly used to obtain $3.2 million in gambling grant funding for personal gain. DIA describes the investigation as “mammoth and complex”.
The allegations are serious. But for Frame, who has spent more than a decade analysing publicly available pokie grant data, the bigger question is why New Zealand is relying on major investigations to uncover problems that may be identifiable much earlier through better use of data.
“The question isn’t whether DIA should investigate fraud. Of course it should. The question is whether we can get better at identifying the warning signs before we need a major investigation at all.”
The data is already telling us where to look
New Zealand’s pokie grant system is unusually transparent in some respects. Grant-making data is publicly available, as are charity and incorporated society records, financial accounts and information about gambling venues.
Yet these datasets largely sit in separate places.
Frame’s own analysis has found a range of indicators that could be used to identify organisations requiring additional scrutiny.
These include:
- organisations with three or fewer trustees;
- newly established organisations receiving multiple grants;
- organisations receiving unusually frequent grants from the same grant-maker;
- gaps or inconsistencies in financial documentation;
- organisations that have changed names;
- registered addresses that are private dwellings or gambling venues;
- organisations sharing addresses or principals with other flagged organisations;
- relationships between an organisation’s principals and gambling venues or operators; and
- organisations heavily dependent on a single pokie funder.
None of these indicators proves wrongdoing.
That is precisely the point.
They are risk indicators that could allow a grant-maker or regulator to ask better questions before money is distributed — rather than discovering problems after millions of dollars have been paid out.
Frame has been using publicly available data to do exactly this kind of analysis for years, including benchmarking organisations against one another and examining relationships between grant recipients, grant-makers and venues. More recently, this has included building a database of venue ownership and company relationships because the information required to assess those relationships is not readily available in one place.
We shouldn’t need to be detectives
“The frustrating thing is that much of this isn’t particularly sophisticated,” says Frame.
“With a decent database and some sensible rules, you can identify organisations that look unusual and then have a human look at them.
“You don’t need to accuse anyone of anything. You simply need to ask: is this normal?”
That is particularly important in a system distributing hundreds of millions of dollars.
In 2025, Class 4 operators distributed approximately $340 million to New Zealand community organisations, while Government received around $300 million in gambling taxes and duties. There were more than 42,000 grant applications involving approximately 9,700 organisations.
At that scale, relying primarily on manual assessment and complaints is not an efficient risk-management strategy.
Prevention is cheaper than investigation
Operation Indago demonstrates the potential consequences of discovering problems late.
The investigation involved six organisations, 23 defendants and more than 500 charges. DIA describes it as its largest-ever prosecution.
The cost is not simply the $3.2 million allegedly obtained improperly.
There is the cost of investigation, prosecution and court processes. There is the regulatory time involved. And, most importantly, there is the opportunity cost to the communities that could otherwise have received the money.
“We shouldn’t measure the cost of fraud only by the amount that was taken,” says Frame. “We should also ask what it costs us to discover it after the event.”
A relatively modest investment in proactive data analysis could therefore pay for itself many times over.
The pokie system actually has some things going for it
This is not an argument for dismantling pokie funding.
In fact, one of the things that stands out from Frame’s analysis is that pokie grant-making has some significant advantages over other parts of New Zealand’s grant ecosystem.
It is relatively fast, reaches a very broad range of community organisations, has relatively simple application processes and operates with a high-trust model.
Those are worth preserving.
The problem is that high trust needs good risk management sitting underneath it.
Frame estimates the wider New Zealand grant-making ecosystem costs around $260 million a year. The objective should therefore be to improve integrity without simply adding another layer of administration to a system that already performs relatively efficiently.
From reactive enforcement to proactive risk management
The answer is not necessarily more people reading more applications.
It is better information.
A national risk-monitoring framework could bring together existing information about:
- grant applications and payments;
- organisations and their governance;
- charity and incorporated society records;
- financial information;
- venue ownership;
- relationships between people and organisations; and
- historical grant-making patterns.
This could generate risk flags for further human review.
It could also allow grant-makers to benchmark recipients against comparable organisations.
That matters because a grant isn’t necessarily suspicious simply because it is large.
It may become interesting when it is large relative to the size, activity, income or characteristics of the organisation receiving it.
That is an area where benchmarking can be particularly useful.
Frame has previously used this approach to examine grant funding across sports and community organisations, including comparing grant funding with measures such as membership, activity and income.
An opportunity to modernise the system
The current investigation provides an opportunity to move beyond a cycle of complaint, investigation and prosecution.
There are three practical changes that could make a difference:
1. Introduce risk-based monitoring
Use existing grant, charity, company and venue data to identify unusual patterns and relationships for further review.
2. Improve information sharing
Create a more complete picture of organisations, people, grant-makers and venues rather than assessing each grant application in isolation.
3. Introduce independent oversight where significant concerns arise
Where credible concerns are raised about a grant-making process, an independent observer could provide additional assurance around proceeds committee decision-making.
These measures could strengthen the system without turning every grant application into a compliance exercise.
Protecting the money — and the system
New Zealand has effectively created a very large community funding mechanism through the gambling system.
The public has a legitimate interest in knowing that the money is going where it is intended, that grant-makers are making sound decisions and that organisations receiving funding are operating appropriately.
“The majority of pokie funding goes to legitimate community organisations doing good work,” says Frame.
“That’s exactly why we should be serious about protecting the system from the people who want to exploit it.”
Operation Indago shows that enforcement can find serious problems. The next step is making sure we get better at finding the warning signs before we need Operation Indago.
ENDS
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