Green’s Dictionary of Slang

1. (Aus./N.Z. prison) to assault and beat after covering the victim’s eyes with a blanket or pillow-case.

[1906		‘On Tented Field’ in Gundagai Indep. 3. Oct. n.p.: [A] person [...] wanted to know what “blanketing” was like. He soon found out. The modus operandi is this: Six or eight of the soldiers secure a blanket, and each taking hold of a part, the victim is pitched into it. The blanket is then lifted and pulled taut, and the man inside is, in consequence, shot into the air].
1994		B. Payne Poor Behaviour 116: [M]ost of the other creeps are regularly blanketed and beaten with iron bars, while their beds are filled with piss and shit and some are scarred for life.
2001		D. Looser Boobslang [U. Canterbury D.Phil. thesis] 20/1: blanket v. 1 to assault somebody.

2. (N.Z. prison) to provide an alibi or excuse.

2001

D. Looser Boobslang [U. Canterbury D.Phil. thesis] 20/1: blanket v. 2 to provide an alibi or excuse for another person, to 'cover up' for him.