Red Alert

Posts Tagged ‘Gambling’

Today the house must not win

Posted by on February 20th, 2013

New Zealand is a small, remote country with an unfortunate reliance on imported capital to maintain our standard of living. A crucial insurance for the economy is New Zealanders’ hard-earned reputation for having the lowest level of government corruption in the world.

Or at least that’s something we had.

I write this post with the heaviest of hearts because I know how completely National has jeopardised the economy. I know how foreign investors will be frightened by the truth. Their reaction could see more hardworking and innocent Kiwis turfed on the unemployment scrapheap.

Ultimately, though, there is an overwhelming public interest in having on record just how low Prime Minister John Key and his factotum Steven Joyce have sunk in their bid to trade our country’s laws for a casino’s cash.

Yesterday the Deputy Auditor-General released her report into the tender process for the SkyCity convention centre. At 71 pages it is among the longest and most damning auditor’s reports I have seen. John Armstrong, writing in the New Zealand Herald, assessed the tender as “verging on banana republic kind of stuff without the bananas.” Armstrong was too polite.

Labour leader David Shearer summed the report up more completely: “Kiwis know [Key] was donkey deep in this entire process. The deal with SkyCity was his idea. He knew exactly what was going on and was pulling the strings behind the scenes.”

I have followed the convention centre tender since it first came to public light in 2010 – months after John Key had a cozy dinner with the casino company’s board and (in the PM’s own words) “discussed a possible National Convention Centre and they raised issues relating to the Gambling Act 2003”.

As time has passed I have become more and more outraged by what was transparently a stacked process seemingly designed to ensure SkyCity was the only tenderer left standing at the end.

All throughout the National Government have obfuscated, played cat-and-mouse games with the Opposition and the media, and denied multiple Official Information Act requests on the most specious of grounds.

Not only did ministers refuse to answer more than 100 of my parliamentary questions on the SkyCity deal – but they even took to using the SkyCity deal as a supposed reason to refuse answering dozens of questions which were quite unrelated to the casino!

The Commerce Select Committee (which I am a member of) even had to take the most extraordinary step of recalling Ministry of Economic Development/MoBIE officials to a second testimony session, following their failure to answer legitimate questions as part of the committee’s 2011/12 financial review.

As the years passed and the stench of the rotten tender grew overpowering, the sole explanation Key and Joyce offered for their preference for SkyCity was that taxpayers wouldn’t foot the bill for the conference centre. But that was an outright lie – $2.1 million of your dollars were diverted from the Christchurch earthquake recovery effort and other economic development programmes to support the convention centre design!

Finally, when the Deputy Auditor-General prudently announced a probe into the whole sordid affair, Steven Joyce vowed to push on in contempt of her. In my time in Parliament I have never seen anything like it.

But now the auditor has published her report. Her findings are damning and they back up what I have been saying and what my Labour colleagues have been saying since 2010. It is beyond comprehension that Steven Joyce did not resign from the ministry immediately after receiving the report.

The Deputy Auditor-General’s findings include (and I quote):

  1. We do not consider that the evaluation process was transparent or even-handed (p5).
  2. SkyCity was treated very differently from the other parties that responded [to the tender] and the evaluation process effectively moved into a different phase with one party… the steps that were taken were not consistent with good practice principles of transparency and fairness (p5).
  3. The Prime Minister/Minister of Tourism… annotated the [tender] briefing paper by hand, stating that “we should close off the SkyCity angle first” (p15).
  4. It was well known among officials that SkyCity had met with various senior Minister in the previous months. In our view, there was an obvious risk that SkyCity would have a better understanding of the Government’s thoughts than other participants (p45).
  5. There were a number of flaws with the way the evaluation process unfolded during 2010 (p50).
  6. Given the nature of the responses, it is likely that the SkyCity proposal was always going to be the most attractive (p51).

So what are the broad consequences for New Zealand?

Has the opaque and unfair SkyCity deal been scrapped? No.

Instead National has thumbed its nose at the auditor’s office and is about to restart the negotiations. They have to finalise pesky details such as how anyone will receive the television news once a hulking great pokie palace is plonked where our state broadcaster has some of its studios.

Has the Government promised not to change the law to flood central Auckland with very low-taxed pokies, while taking money out of high-taxed pub pokies which fund kids’ learn to swim programmes and quit gambling programmes?

It’s a no to that too.

As my Labour colleague Ruth Dyson succinctly put it “The convention centre will not be ‘free’. The social cost for New Zealanders and their families battling problem gambling will be significant.”

So National seem quite happy to plough along with their trade in our laws, whatever the consequences. Well Labour will fight them every step of the way. I can only hope that the government’s support partners in the Māori and United Future parties will do the right thing and join us.

Ultimately, though, this is not only about one shady deal – although one shady deal is clearly one too many.

This speaks to the whole world about what sort of country New Zealand is in our collective soul. It speaks to the truth about whether we have a clean government which stands up and stops corruption wherever its finds it. Or whether we don’t.

And it speaks to our longstanding core values of egalitarianism and equality. Labour MPs face the human casualties of the National government’s economic mismanagement in our electorate offices every week. We know the despair felt by ordinary, honest kiwis who can plainly see that John Key’s ‘brighter future’ means one law for them and sweet deals for his mates at the big end of town.

The casino deal is a total disgrace. Clearly John Key and Steven Joyce don’t care.

So, in light of the Deputy Auditor-General’s report, I am publicly calling on SkyCity to formally withdraw their current tender. That should trigger the entire process to restart from the beginning, so it can be run fairly and transparently.

I look forward to SkyCity’s quick, positive and public response.

Extra: David Shearer, Grant Robertson, David Parker and Ruth Dyson all gave excellent speeches on the convention centre deal in Parliament today. Well worth a watch!


Some gambling facts

Posted by on June 14th, 2011

At his press conference yesterday, John Key argued that casinos are better at ‘harm minimisation’ than the average pokie machine operator. I tend to agree with him on that, which is why I’m disappointed his government haven’t done more to address the significant issue problem gambling is causing in some of our poorest communities.

At this point in proceedings I thought it would be useful to get a few facts about gambling in New Zealand on the table:

  • New Zealanders lost $2.034 billion through gambling in 2008 of which $938 million was lost through pokies.
  • $5.6 million is gambled every day in New Zealand.
  • Pokies (outside casinos) took $889 million in 2009, compared to $107 million in 1991, and have 46% of the gambling market.
  • 2.5million is lost every day on pokies – not including casinos.
  • There are 19359 non-casino pokie machines (March 2010) in New Zealand. With casino pokies this means there is one machine for every 134 people over 18 years.
  • Pokie machines are the most harmful form of gambling as over 78% of problem gamblers use them as their primary mode of gambling.
  • Between 10,000 and 60,000 (0.3% and 1.8%) of adults are problem gamblers in New Zealand.
  • A 2009 Ministry of Health study shows that pokie machines are concentrated in the most vulnerable communities.
  • 54% venues are in decile 8,9 & 10 areas and 56% Maori and 72% Pacific peoples live in these decile areas.
  • In decile 9 areas there is 1 pokie machine for every 75 people and in decile 1 areas there is 1 pokie machine per 465 people.
  • A study in 2005 found that approximately 35% of foodbank clients were either problem gamblers themselves or were affected by the gambling of others.

Now that John Key has suddenly had a revelation and decided that problem gambling and pokie machines are such a big problem in low socio-economic areas, I look forward to hearing his government’s comprehensive plan to deal with the issue. I won’t be holding my breath though…


Key puts up ‘NZ For Sale’ sign

Posted by on June 13th, 2011

It’s time for John Key’s government to stop being dictated to by multi-national corporations and start putting the best interests of New Zealanders ahead of corporate profits. News that SkyCity has decided to invest in a new International Convention Centre in Auckland is great news for the economy, locally and nationally. But that doesn’t mean we should rush out and change our laws and regulations to suit the interests of SkyCity’s shareholders.

When Warner Brothers held a gun to National’s head, John Key rolled over and changed our employment laws to suit their whims. Now we’re seeing him roll over and offer to change our gambling laws to suit SkyCity. That’s not good enough. The National government should be guided by what is in the best interests of all New Zealanders, not what’s in the best interests of corporate giants.

It’s ironic that National aren’t willing to back New Zealand companies like KiwiRail, preferring to see contracts for new trains and carriages shipped offshore, but when one of the private sector big corporates clicks their fingers it seems there isn’t anything John Key won’t do to please them.


More dodgy pokie machine scams

Posted by on August 4th, 2010

The Otago Daily Times has been hot on the heels of dodgy pokie trust scams for some time. Today they have a story about an alleged “money-go-round” involving several south Auckland pokie machine venues and southern racing clubs. Personally I find the idea that the profits from pokie venues in South Auckland are being channelled to racing clubs in the lower South Island pretty appalling.

Pokie trusts should be investing the money collected through pokie machines back into the communities they are taken from. In recent months we’ve seen countless examples of pokie trusts using money that should have been applied for charitable purposes to compete with each other for venues, refurbish venues, and even wine and dine people at flash restaurants. It’s time to end the rorts.

I questioned the Internal Affairs Minister Nathan Guy about this when he appeared before the Select Committee during the Estimates process. He referred almost every question to officials. When I asked if he thought the legislation needed changing, he said no. In other words, he’s washing his hands of the problem. That’s not good enough. It’s time for him to earn his ministerial salary…


Time to clean up pokie trusts

Posted by on May 9th, 2010

Last week there was quite a bit of media coverage around some pretty dodgy goings on within some of the pokie trusts. It’s time for the government to get stuck in and clean this mess up once and for all. The Gambling Act of 2003 was a step in the right direction, but there is still a way to go. Under the Act, the profits from pokie machines have to go back into the community for charitable purposes, but there are still too many rorts.

Recent revelations that gaming machine proceeds have been used to renovate a pokie room in a strip club, fund lavish meals in fancy restaurants, and encourage gaming venues to switch from one Trust to another prove the point pretty clearly. It’s time to put much more stringent requirements around how the money can be spent so that as much as possible goes back into local community groups and clubs. Times are tough and they really need the money.

Both the current Internal Affairs Minister Nathan Guy and his predecessor Richard Worth acknowledged the problem. It’s time for them to do something about it. They could start by progressing the Gambling Amendment Act currently on the Order Paper and taking a close look at some of the amendments our Green colleague Kevin Hague has put forward. Doing nothing isn’t an option.


How much was Trump paid?

Posted by on March 15th, 2010

Gambling in New Zealand is highly regulated. Casinos and pokie machine venues can’t advertise. The notable exception is Lotto, who can get away with a lot more than other gambling outlets. Can you imagine Sky City getting away with a TV advertising campaign suggesting you could “Trump up your life” by visiting the casino? Me neither.

I think given the extra lattitude that Lotto are given in their advertising it’s important that they’re upfront and transparent in their activities. I’m concerned that they are refusing to reveal how much they paid Donald Trump for their latest promotion. Newstalk ZB has the story.

Which raises the wider issue: should Lotto be treated differently to other forms of gambling like casinos and pokie venues? Are our restrictions on Lotto advertising too light, or are our restrictions on casino and pokie advertising too heavy, or is it a combination of both? Interested in your thoughts…


Business placement at Sky City

Posted by on October 3rd, 2009

I spent most of the past week up in Auckland on a Business and Parliament Trust placement at Sky City. The placements are a great opportunity for MPs from all parties to spend some time in a large company learning more about their business and the business environment in general. I chose Sky City for a variety of reasons, including my role as Labour’s spokesperson on gambling issues. I was also interested in the hospitality and conventions side of their business.

Throughout the week I had an opportunity to sit down with most of the company’s senior team and discuss everything from their HR practices through to their approach to foreign exchange, interest rates and debt management. Naturally we spent quite a lot of time talking about the gambling side of the business, their host responsibility policies and the constraints the regulatory and legal environment places on them.

Although I’ve worked for a large corporate before (I spent a couple of years working as a training manager in the oil and gas industry), I’d never seen the inside of a large hospitality business before. We did a tour of the convention centre and the various kitchens throughout the complex and I was simply blown away. I’d always wondered how the catering was handled for a 1,000+ conference dinner – now I know!

The Business and Parliament Trust does a really great job of providing MPs with the opportunity to stay in touch with business and providing business with opportunities to engage more with politicians. I found my week at Sky City an incredibly valuable one and I’d highly recommend a business placement to any MPs who haven’t already done one. I certainly hope to do another one in future years.


The Gambling Amendment Bill

Posted by on July 14th, 2009

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.