The Department of Internal Affairs has been criticised for being too lenient by suspending for 16 days the licence of a gaming trust that broke gambling laws.
In 2010 Grassroots Trust illegally underpaid profits to community charities by $561,482 and overpaid venue costs to pubs by $79,359.
Internal Affairs says it initially planned to cancel the trust's licence completely, but relented after the trust appealed to the High Court.
The GamblingWatch group says the penalty amounts to a slap on the hand with a wet bus ticket that will encourage other gaming trusts to break the law.
However, the department says the trust is not getting off lightly because it has agreed to boost the minimum amount it gives the community by almost 3% and to drop the amount it pays pubs by 1.5%.