Instead it would go to the Salvation Army, to avoid duplication of services. Associate Health Minister Peter Dunne has rejected claims the decision came from political pressure because the foundation opposed the SkyCity convention deal.
It can be no surprise that the foundation opposed the convention deal. Problem gambling isn't about Lotto. About 20 per cent of New Zealand adults who play gaming machines regularly are likely to be problem gamblers. Gaming machines is the type of gambling most often associated with gambling problems.
A look at the foundation's website seems to show extensive resources that cover the width and breadth of New Zealand's ethnic and social groups. That the Government has pulled all funding from the foundation with the exception of its Asian Family Services seems to illustrate that. It also has in its favour it is a secular group.
It has provided counselling for more than 25,000 people over 20 years.
And if the the Ministry of Health is worried about duplication, then why is the foundation going, and not the Salvation Army - which is a generalist group without the depth in resources of the foundation?
The foundation has been critical of the Government over the Sky deal and yes, so has the Salvation Army.
But if it is retaliation, and it can't possibly be, the foundation is a much easier target.
Problem gambling is not a sexy subject and it can be a hard slog to get media attention.
With any luck, enough media attention and good sense - Mr Dunne's mantra - will see this decision reversed.