Associate Health Minister Peter Dunne says he has never heard of threats being made to Problem Gambling Foundation staff by government officials.
A former chair of the Problem Gambling Foundation says he was regularly threatened by government officials during his time there.
Earlier this month the Ministry of Health told the country's largest problem gambling service the contract for three-quarters of its services would end mid-year. The Salvation Army is the proposed new provider.
The foundation has said it fears the cut to its funding will end its work on preventing problem gambling.
Peter Adams, associate professor of Auckland University's Centre of Addiction Research, was involved in setting up the Problem Gambling Foundation 20 years ago and worked with the organisation for the following decade.
He said government has a vested interest in profits from gambling and that during his time with the foundation there were many attempts to break it up. "We got very used to hostility from government officials," he said. "I was threatened personally at one stage ... one official said that he would work at ruining my career."
Mr Adams told Radio New Zealand's Sunday Morning programme gambling problems had got worse since the introduction of poker machines and criticised the cut in funding to the foundation.
"By defunding the Problem Gambling Foundation we're eliminating our main and arguably our most important specialist service in the area and handing it over to a generic service. So it's like closing down an oncology ward and handing it over to generic services in the hospital."
Associate Health Minister Peter Dunne told the programme he has never heard of any threats, and suggestions by Mr Adams that the Government has a vested interest in the gambling industry are not correct either.
He said gambling is legal and there is nothing wrong with representatives from that industry fostering relationships with the government.
Mr Dunne rejected suggestions problem gambling is getting worse and again defended the decision to cut funding to the foundation.
He said it was likely the foundation was not doing that good a job in helping problem gamblers. He said it is not up to the Government to pay for an advocacy service opposed to the gambling industry.
"We were tendering for service delivery to deal with the seven thousand-odd cases of problem gambling that come across the table every year.
"What these groups are talking about is something entirely different: a voice for problem gambling. We were actually talking about treating those people who suffer from problem gambling addictions."
Mr Dunne said both the number of pokies, and the money spent on gambling, is falling.