In an Internal Affairs briefing to the incoming racing minister, Craig Foss, who is replacing the retiring John Carter, the department notes the board is considering becoming a pokies operator in its own right.
"In the past, there has been community disquiet about the level of gaming-machine funds granted for stake money instead of for community purposes."
The board was "considering becoming a gaming-machine operator in its own right, and applying the gambling profits generated in its TAB agencies to support", the report said.
Both the board and Internal Affairs have confirmed an application is being considered.
"Once things are in place, we will be issuing information outlining what is happening," a board spokesman said.
At present, pokies in TAB venues are operated by trusts who then distribute profits by way of grants to the community or other authorised purposes, but concern over distribution has attracted widespread media attention.
Figures released to the Otago Daily Times reveal the racing industry has received $96 million from pokie trusts since 2005, $21 million from the Trusts Charitable Foundation alone. The foundation has one of the largest involvements with TAB venues.
"A reputable racing statutory body operating gaming machines on racing premises for racing purposes could potentially address the public concern surrounding pub and club gaming-machine profits funding racing stakes," the report said.
Internal Affairs minister Nathan Guy said that under the Gambling Act (2003) the board could apply for licences to run poker machines for an "authorised purpose".
"Under the Act, promoting, controlling and conducting race meetings is an 'authorised purpose', as is the payment of stakes.
"The proposal is legal under current law, so it's up to the New Zealand Racing Board to decide whether this would be in the best interests of the racing industry," Mr Guy said.
Problem Gambling Foundation acting chief executive Graham Aitken said the racing industry should be like any other business and not rely on pokies for support.
It was difficult to determine how much money was currently granted from TAB venues, but it was likely to be in the tens of millions.
The Internal Affairs briefing said racing had lost its mainstream appeal, and suffered a lack of investment and a long-term decline in its core betting income.
Prize money is likely to be affected when the Government ends its $3 million-per-annum racing promotion and sponsorship scheme.
