The totalisator was responsible for the New Zealand Racing Conference coming into being, and this body has always urged that all betting be through the totalisator alone. The first crude totalisators began operating about 1879 or 1880. Deductions were as high as 12 per cent, and occasionally an operator was guilty of sharp practices. Despite its inefficiency, the totalisator must have greatly interfered with the business of the on-course bookmakers, or they must have foreseen a strong future competitor, for there were various attempts to ban the totalisator, the Churches and other anti-gambling factions joining the bookmakers in their attack. But the clubs quickly saw the advantages of the new machine. The first statutory restrictions on its use came with the Gaming and Lotteries Act of 1881. Permits for its use were then issued by the Colonial Secretary, who could issue as many as he liked. The metropolitan clubs soon saw that too many were being issued and were perturbed at the criticism of racing because of this abuse. The first meeting of delegates of the metropolitan racing clubs concerned itself almost solely with this problem and strongly requested that the Colonial Secretary restrict the issue of permits. Both in 1892 and in 1893 the conference again unsuccessfully asked the Government to restrict permits. The Opposition attacked the Government on this matter and succeeded in 1896 in carrying by a fair majority the second reading of the Bill to abolish the totalisator. The Bill did not, however, reach a third reading.
Over the next 10 years many clubs gradually excluded bookmakers from their courses, although bookmaking was not unlawful. Opinions on the exclusion of bookmakers were divided. In 1903 a petition to Parliament against the proposal to abolish the totalisator contained over 32,000 signatures and, in 1907, petitions tabled in the House of Representatives showed 36,311 signatures in favour of the totalisator and 36,471 against it. In 1904 Sir George Clifford was highly critical of a small number of clubs that had seen fit to license bookmakers on their courses. In 1907 Sir Joseph Ward introduced his highly contentious Gaming and Lotteries Act, which legalised bookmaking on racecourses and required all clubs authorised to use the totalisator to license fit persons as bookmakers. Totalisator dividends had to be paid to the nearest 6d., and the number of totalisator permits was reduced by one-sixth from 1 September 1908. The licensing system was disastrous and scandalous. The country was invaded by men of criminal tendencies. The racing authorities refused to distinguish among applicants for licences because they did not see why the invidious duty of selection should fall to them. Finally Mr Justice Chapman strongly criticised the legislation from the Supreme Court bench. The results of the Act, and the apparently widespread condemnation which they had evoked, led to an amendment in 1910. Bookmakers were excluded from racecourses and they made their last appearance at the now abolished Takapuna racecourse in Auckland in 1911.
But though one evil was abolished, another started. The illegal bookmaker came into his own, because of defects in the Act. The doubles totalisator was abolished, leaving the illegal bookmaker with a monopoly of this popular form of betting. He thrived because the telephone and the telegraph could not be used to put money on the totalisator and because dividends could not be published, with the result that the turnover of illegal bookmakers was estimated at £24,000,000 by 1946. Though some of this money doubtless found its way back to the totalisator, racing clubs and the Government lost a huge revenue.