Updated 8.33am: Auckland's chances of hosting an America's Cup pre-regatta look dead in the water.

A majority of teams have voted to have all the racing in 2017 in one location - that being Bermuda.

Yachting commentator Peter Montgomery says Auckland's prospects are looking grim - but Team New Zealand is fighting for the regatta.

"They're going to arbitration, and if arbitration rules in their favour, well some of the challengers might want to pay a penalty fine and not come anyway."

But he says the "legal" action it's taking isn't going to unfold in a court.

The complaint gets put before the regatta director for arbitration, but no members have yet been announced for an arbitration body.

The government's tacking to the side of the course as doubt grows over Team New Zealand's future in the America's Cup.

The government will only give Team New Zealand funding if there's a race here.

Economic Development Minister Steven Joyce says the government will wait for a final decision from the authority running the event, before its makes its call on funding.

Peter Montgomery says the teams want to race smaller boats as well, which puts a spanner in the works for Team New Zealand's planning.

Teams have already been working on designs for bigger ones.

Peter Montgomery says there are more permutations than that.

"It is convoluted, and it is not good for the event or the sport. These late changes, we're just over two years away from the big show, and to have these late changes is not good."