At some stage soon parliament will resume debate on the Gambling Amendment Bill (No2). It’s a largely technical Bill that makes minor amendments so that the law will work as intended. One of the issues it covers is the distribution of pokie machine profits which, by law, have to be used for charitable purposes. However those profits don’t have to go back into the communities they were drawn from and quite a bit of pokie money goes into paying rental space for the machines, director’s fees for the ‘charities’ that distribute the funds, and other similar ‘expenses’.
During the Second Reading debate, the then Minister of Internal Affairs, Richard Worth, conceded that there were some questionable funding practices within the industry. He subsequently indicated in discussions with me that he thought those issues should be the subject of a separate piece of legislation. It’s an undertaking I hope the new Minister will honour.
In the meantime, Sue Bradford has tabled a number of amendments to the current Bill and while I think that some of them are wide of the Bill’s scope (it’s supposed to contain technical amendments, not significant policy changes) I think they’re worthy of debate. They include requirements for pokie machines to be located entirely indoors (not in courtyards where people can smoke, drink and gamble at the same time) and for the majority of the grants to be made back into the communities the money came from in the first place.
The amendments would also prohibit the use of pokie machine profits for racing stake money. I don’t have a problem with racing clubs receiving charitable grants. It would be unfair to stop racing clubs receiving any funding whilst still allowing other sports clubs to get it. However currently it is perfectly legal for a pokie machine operator to hand over their profits to the racing industry to use as prize money. In my view that is one form of gambling subsidising another and I can’t see how it can be justified.
I’d be interested in people’s views on pokie machines and how the profits should be distributed. Do we have too many pokie machines? Should the profits have to go back into the communities they are taken from? Should racing stake money be an authorised charitable purpose? Should we move to a more centralised system for grant distribution (eg. A model similar to lottery grants)? All reasonable and sensible argument and suggestions welcome.
I read somewhere (The Press?) that suspiciously large amounts of pokie machine money goes to charities that fund ‘golf tours’ for the hospitality industry. So that seems like a pretty good argument to throw in there.
Regulating the position of the machines seems like the sort of pointless state intervention I’d like to see the left-wing parties back away from. A centralised commission for grants seems like an excellent idea, ideally it would have a mandate to help charities that support problem gamblers.
The system has always been about taking money from the suckers and addicts who believe they can win, and putting it in the hands of the mates of the clubs. It’s a sick situation that (once again) Labour refused to address. It’s nice to see Labour move just a little bit on the issue.
The entire gambling industry needs to addressed, and the very significant social harms it causes weighed against the benefits it provides (I’m sure there are some…).
I think the amendments are sound and reasonable. I think Labour still needs to be aware of the ‘nanny state’ label that was so effectively used against us in the last election. I would hate to see Labour putting forward bills that would reinforce this image. People make a conscious choice to gamble, to play ‘pokie machines’, and they have a right to do this. Yes it is the cause of many social issues, but ultimately we live in a society where we are entitled to make choices about what we do with our money. It is time for Labour to find a balance between common sense socially aware policy and allowing people freedoms. It is only when this balance is struck that the ‘middle ground’ of the electorate will get back on board – and we need this to happen!
I think that the whole gambling bill needs to be addressed. It is a total social injustice what is happening with the pokie machines in class 4 venues.They are taking far too much money from the poorer communities, and i am shocked to find most of the money goes to racing, now i wouldn’t call that charity, it should be going back into the communities that is being robbed blind by them. The government should be organizing where the charity money goes not these pokie trusts.
A possibility could be to turn the money over to the local community board (via the local TLA) for distribution. This would bring an element of democracy into the mix as well as the local component. Local authorities have been delegated liquor licensing competency, so it would not be too much of a stretch to devolve the distribution of small amounts of gaming revenue to local groups – given that Councils and their boards have experience and knowledge in supporting community and voluntary organisations.
Anything you guys can do would be an improvement on the current situation. But an old Tory, Paul East, is the front man for the gaming machine industry – so good luck – he’s already bleating: http://www.scoop.co.nz/stories/PO0907/S00138.htm
1) We have too many pokie machines in NZ. Number have grown from around 7000 in 1994 to around 20,000 now. During that same time the amount lost from our communities (from pokies) has grown from around $100 million to over $900 million.
2) This money is being lost from our poorest communities (where the machines are mostly located).
3) Around $150 million goes to administer the pokie trusts. That money could be going directly back into the community if Government abolished the pokie trusts and used an existing model. The two most obvious would be community trusts or lotteries.
There are many people who want to abolish pokie machines altogether. At the very least the social contract should be that we follow a middle path of effective regulation, harm minimisation, and ensuring that the losses go back to the community (not to professional sport, not to horse racing and not to administer pokie trusts).
This is a significant amount of money (almost $1 billion) – there is no better time than during a recession to reassess whether unelected, unaccountable pokie trusts are the best means of distributing this $1 billion.
Tim – TLAs would be the worse place to put this money. TLAs are responsible for the pokie venue licences and rules around numbers of venues etc. Giving them the pokie funding to distribute would create a perverse incentive to increase machine and venue numbers.
Disclaimer: I work for the Problem Gambling Foundations. These views are not necessarily those of PGF.
As someone who has derived my income from the racing industry for more than a number of years i must say that i am sickened by the use of pokie as racing stakes. Millions of dollars are pumped into race prizes down in christchurch – money taken from overwhelmingly poor northern communities that see a much reduced return of the money they’ve lost into the machines. On top of that allegations of corruption by nzrb officials has surfaced – some provided gratis renovations totalling hundreds of thousands of dollars to outlets if they committed their takings to a ‘racing friendly’ trust. The previous chief executive made all the right noises about investigating this issue, but with so much money, such vested interests, and the fact that prize money for racing isn’t a social good means this whole industry need a shake-up. Racing has a favourable depreciation tax regime, a direct $9 million subsidy (shame on you Helen Clark), and a tax rate of 2% – why are they allowed to access community grants as well?
Tim, given that pokies are one of the most addictive form of gambling I’m not sure its quite true to say that those who use them freely choose to do so. Also I would hate to see good policy rejected for fear of it being mislabeled as arising from some sort of “nanny state” We should reject the characterisation of policy we believe in as nannying rather than reject the policy.
In the original Gambling Bill 1993, the Greens proposed that the gambling money be divided between the TLA’s, DIA’s COG’S and the Lotteries Commission to be then granted to various community organisations and sporting groups. This would improve transparency and lessen the cost of administration.
There continues to be too many machines in the poorer areas and not enough returns back into thed community.
I work for Oasis Centre for problem gambling but these veiws are my own.
As a person who works with Pacific people to address gambling problems I say that from an analysis of where the pokie machines are located in Christchurch the evidence is unrefuteable that are there is dense location in communities where Pacific people reside. There is also very little evidence that the funds returned are not reaching pacific organisations.
The gaming industry will state that the problem is with a small minority and will contribute to the treatment costs of these people. However there needs to be a much greater commitment to intervening early with people who are showing the first signs of problem gambling and to deal with the location and density of pokie machine placement.
Others have commented on the actions and behaviours of trusts in quite inappropriate grant giving practices. It is also obvious that the plethora of trusts competing with each other attempt to wrestle ownership of the machines from each other by offering inducements to the pubs and clubs that own them.
Kia ora I want people to know that there are 87 pokie machines in Wainuiomata. There are none on the Western hills of Lower Hutt. This pattern is repeated in everey suburb in New Zealand. Pokie machines are all sited in the 3 highest socially deprived areas. How is this “preventing harm from problem gambling”? Nearly 50% of Maori and PI live in these areas. The higher the number of pokies with in a neighbourhood, the higher the number of problem gamblers. It’s not rocket science here. Availability increases risk. Maori and PI have 3 times and 6 times respectively of developing a problem gambling. Our councils are not protecting the vulnerable communities, and if we want to change that we have to approach each council seperately. Divide and conquer? Why is the law as it is written and enacted now NOT being implemented to protect our vulnerable? The children? Children of problem gamblers ore 2-3 times more likely to be abused than their peers. Yet we put the machines in the areas with people at highest risk from them, with the highest number of young children, and the highest deprivation levels in our country. It is a shame on all of us! This does not need tinkering with, it needs dealing to! But no one is taking up the requirement to “prevent harm from problem gambling”, and it is too hard to address TLA by TLA. This needs to be addressed centrally.