"Michael O'Brien was running a dishonest scheme for which he received a backhander of a third of the grants given out while he was running the scheme.
"Mr O'Brien's offending was selfish and greedy. The racing clubs believed they had no other choice but to pay him a third funding, if they were to get any grant money at all.
"That was the trap they felt they were in, that they otherwise wouldn't get the pokie funding that they needed."
Burston said any sentencing discounts for good character shouldn't be applied, as the scheme ran for so many years.
He also argued again any reduction for remorse.
"Whether genuine remorse can exist when it first appears many years after the events, or whether it's really self-pity and pity for the situation of his family, is a matter for Your Honour.
"In the Crown's submission, remorse on the eve of sentencing must be very limited."
O'Brien's lawyer, Bruce Squire QC, had argued that home detention would be more appropriate, as O'Brien had good character and was remorseful.
"At the age of 58, he's coming to this court for the first time.
"His contribution to the community has lasted many years, not least to racing, but also to the administration of children's sport as a volunteer with his local rugby club.
"He's generally regarded as a talented administrator and organiser, who's prepared to give generously of his time.
"He knows that he overstepped the mark, and is remorseful not only for his offending, but for the impact on his family who are the innocent victims in this case."
But Justice Robert Dobson wasn't convinced.
"The tone of Mr O'Brien throughout suggests that he was dismissive of the SFO, and of their rules," he said.
"[The offending] involved persistence and determined deception of a Government agency that is charged with regulating a business.
"The regulatory system depends on the integrity of applicants. It is conduct that needs to be denounced in the strongest terms, and deterred in the strongest terms the law allows."
Justice Dobson indicated a preference for O'Brien's four year and six month sentence to be spent in Christchurch Men's Prison, to allow O'Brien's family to visit.
Coffey, a former Internal Affairs gambling inspector, received 12 months home detention for the lesser charge of making false representations to deceive the Department of Internal Affairs.
Justice Dobson noted Coffey hadn't received any financial rewards for his offending, and that his mental health condition would make prison a harsher sentence than for other offenders.
The third man who was found guilty in the scheme, Nelson bar owner Paul Max, 60, will be sentenced on 27 July.
Internal Affairs has welcomed the sentences, which come after an investigation involving the Serious Fraud Office, the Police's Organised and Financial Crime Agency, and the Department of Internal Affairs.
Internal Affairs' Gambling Compliance Director Gareth Bostock said it showed how seriously the court viewed the misappropriation of community money.
"This multi-agency approach was necessary to break through the criminal behaviour that had developed in some parts of the class 4 gambling sector.
"New Zealand communities should expect the highest integrity from the gambling sector so that community organisations can access grants from gambling societies without the concern that funding is being directed unlawfully."
Bostock said the specialist team of investigators would continue to investigate fraudulent activity, and would work together again with the SFO and Police if the need arose.
