Denise Roche
Time to clean up the gambling industry

It’s all happening on the gambling front right now. This week the Auditor-General’s office agreed to carry out an inquiry into the Prime Minister’s dodgy pokies-for-convention-centre process. Meanwhile, the debate between pokie trusts and politicians around Te Ururoa Flavell’s Gambling Harm Reduction Bill has also been playing out in the media. With submissions on this due to the Commerce Select Committee Bill by June 21, the pressure is on.

Pub pokies and the Flavell Bill
One of the developments this week has been Mr Flavell’s clarification that his Bill, if passed, would require at last 80% of the 37.12% of gambling proceeds that pokie trusts are currently required to return to communities to be distributed within the same geographical area within which the machines themselves are located. This would put paid to at least some of the rorts that pokie trusts have managed to pull since the Gambling Act was enacted in 2003.

Though I’d like to see a much higher return to communities than 37% – I think 50% or 60% is entirely possible – the “80% of 37%” rule, along with moves to introduce player controls and give communities more say in how many (if any) pokies are located in their communities, is one of the strengths of this Bill.

Its biggest strength, however, is its intention to clean up the industry – by replacing the pokie trusts with local distribution committees, along the lines of the Community Organisations Grants Scheme.  Because the fact is that, despite numerous opportunities for voluntary compliance, a tough new Gambling Act, and new and wide regulatory powers given to DIA, the current system is rotten.

As the Problem Gambling Foundation has said in its submission, currently there are nearly 50 self-appointed gambling trusts with 50 sets of overheads running the show.  Between them the trusts and the venue operators (pubs) currently swallow up around $210 million of the three quarters of a billion dollars gambled away on pub pokies every year. The trusts treat gambling proceeds – which are essentially public funds – as their own; they have even admitted to using gambling money to help fund their lobbying around this Bill.  It’s for the Select Committee to discuss exactly what mechanisms would work best, but doing away with these dodgy trusts would be a huge step in the right direction.

Casino deal back in the spotlight
This week is being called John Key’s worst one as PM. But of all the self-inflicted crises that have bedevilled him and his government this year, the dodgy pokies-for-convention-centre deal is the only one that threatens his own reputation.  As Metiria Turei has said, with the Deputy Auditor General acknowledging the deal raises issues worth investigating, the only responsible course of action surely must be to assure the public that no deal will be signed while the inquiry is underway. But will the Prime Minister listen? He seems determined to push this deal through.

In all of this, it’s important not to lose sight of the main issue: the harm these machines cause. Casino and pub pokies are often spoken about as if one lot is worse than the other. But the reality is that we need to clean up the entire industry. There are 21,127 pokie machines in this country and they all cause enormous harm. They’re a magnet for problem gamblers, and casinos are a haven for crime and money laundering; the rorts are endless; and the industry is poorly managed.

As a nation we are addicted, too, to the funding generated from gambling.  Replacing pokie money with new funding streams will require long-term solutions. In the meantime Mr Flavell’s Bill and the Auditor-General’s office are offering to step us in the right direction.

The Commerce Select Committee is currently seeking submissions on the Flavell Bill, so please have your say! Click here to make an online submission.

8 thoughts on “Time to clean up the gambling industry

  1. I am aware of some Trusts that will be poorly treated by this act. The Invercargill Licensing Trust is a publicly elected body that already gives 100% of gambling profits back to their community. Removing their ability to distribute funds when their process is already transparent and the trustees publicly elected seems nonsensical.

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  2. Francis Weavers was the CEO of the Community Gaming Association (CGA), an association set up by pokie trusts in about 2002. It was an attempt to create a Code of Conduct and lift standards, hence convincing the public and Govt they could behave. Weavers resigned in 2010.

    In 2011 he prepared a report for the DIA Minister, Nathan Guy, a report that DIA tried very hard to prevent from ever being publicly released. Here are some quotes from his 15 page report:

    “Endemic non compliance (and some corruption) cannot be solved by incremental changes…”

    “…recent experience suggests compliance is the exception rather than the rule amongst licensed operators…”

    “There is little prospsect of the continuing slow erosion of political and public confidence in the Class 4 sector being arrested without decisive action by the DIA or by the crown.”

    “Being seen to do nothing about the corruption which exists in the sector is not a tenable position for the Government to allow to continue”

    “The corrupt behaviour has been all pervasive and pernicious”

    Throughout the report Weavers implies that DIA have been ineffective as a regulator and I wholeheartedly agree with him on that.

    Remember, Weavers was appointed by the pokie trusts to serve their interests, he sat at the board table with them, he fought with DIA in their best interests, he made media statements on their behalf. The word “corruption” is a very serious term to use but he would have seen it all from his ringside position.

    I am the pokies whistleblower that has featured in ODT (Hamish McNeilly) and Sunday Star Times (Steve Kilgallon). I worked at the coalface of the industry for 10 years, and had a different perspective than Weavers, but what he states is a uncannily accurate summation of my own experiences. The report should be taken seriously by the public and Government.

    Pokie Trusts have blown their chances to behave and can now only have themselves to blame with rort after rort and believe me, you have not seen the half of it. Putting sports clubs and applicant groups up to ensure their survival is akin to an army putting children in the frontline of a battle to deflect attack. I am entirely aware from my own experience as a grants administrator that most applicant groups will say and do almost anything to gain or retain funding from pokie trusts.

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  3. Laws’ comment that the community trusts and sporting groups who “depend” on the grants from gambling are themselves part of the problem has some truth in it. If there were adequate funds from other, non-gambling, sources, then they would presumably not be supporting the status quo.

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  4. @Janine 9:05 AM

    No-one – not even Lhaws – can be wrong 100% of the time, and this is one of the rare occasions that he has got it right.

    If we are going to ever get rid of the pokies, we need to find an alternative way of funding the community and sporting organisations that have become so dependent upon them.

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  5. sprout, it’s about replacing self-appointed pokie trusts “They would be replaced with local distribution committees set up by councils”.

    So the local council might simply appoint the existing Invercargill Trust as its distribution committee and allow its future make up to be determined by continuing elections.

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  6. gambling seems to have a way of making you enjoy it initially,with all your winnings and all, then you lose and lose and lose. Everyone must control their gambling habits. it destroys lives.

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