A chance to ban pokies for good?
Salvation Army and Problem Gambling say Govt can cover the $242m grants that come from gaming machines – and stop the rich profiting from the poor. Steve Kilgallon reports.
The Government is being urged to shut down New Zealand’s pokie machines and itself replace the grant money they generate for Kiwi community organisations and sports codes.
A coalition of The Salvation Army, Problem Gambling Foundation and Ma¯ ori health agency Hapai te Hauora have written a white paper for Internal Affairs Minister Tracey Martin arguing that the Government could easily replace the annual $242 million of pokie grants from its own coffers.
The agencies argue that the Covid-19 shutdown of pubs (and therefore pokies) has presented a ‘‘golden opportunity’’ for complete reform of the system. The sector has warned of a huge drop in grants this year because of the shutdown.
Martin says there is $2.5m in the Budget for a review of the ‘‘wider gambling framework’’, but that will initially tackle the unregulated online gambling market. She’s unlikely to heed radical calls for a complete shutdown – but could overhaul the system itself.
But the white paper has drawn a stinging rebuke from pokie trusts, who’ve accused the agencies of using deliberately misleading figures.
The paper says coronavirus ‘‘starkly highlighted the dependency of community organisations’’ on pokie grants, but argues many only take the money because they have no other choice.
Because 50 per cent of pokies are in the poorest areas, the agencies say the system redistributes money from poor to rich, and as only 1.3 per cent of Kiwis regularly play the pokies, relies on a small group of problem gamblers who cannot afford their outlays.
The paper’s authors state: ‘‘The system… is based on the assumption that it is acceptable for a small proportion of New Zealanders living in the poorest communities to lose money in support of a national benefit.’’
The paper advocates for a temporary shutdown to allow for a review of the system, and for Government to cover six months’ worth of grants –
$120m – while devising new model.
But Paula Snowden, chief executive of the Problem Gambling Foundation, says pokies could be removed entirely without impacting community grants.
‘‘The extraordinary event of Covid-19 has given us a breather and a chance to look to do community funding differently,’’ she said.
‘‘All we are asking is that we don’t go back to the old normal, it was broken, let’s make a new normal – one which is fair and transparent and sustainable.
‘‘People say it can’t be that easy, and it would never have
abeen that easy before, but the Covid-19 shutdown of hospitality has made it possible to look at it.’’
The paper says in 2019 about $939m was lost in pokie machines.
After taxes and the costs of the pokie trusts, about $242m remained in grants, split roughly equally between sport and community organisations.
Snowden says the Government could provide a year’s worth of money as seed funding for community foundations to replace the grants system entirely.
The paper says sport has developed a ‘‘relatively recent dependency’’ on pokie grants and Sport NZ could be tasked with reviewing its needs and ensuring money is shared equitably.
Snowden argues the trusts could be dumped and a centralised system could save $187m in admin costs.
She also wants the number of machines cut in poor areas.
‘‘These communities will be in dire straits for a long time: they are in the most fragile employment areas, the most housing pressure, the most in need of ongoing support.
‘‘And what our clients are telling us now it is not only a relief when they couldn’t go to the pub and the pokies, they are afraid of what will happen when they open up again, and they are saying ‘please hold off, give us some time for a breather’.’’
While the tax take would drop with a shutdown, Snowden said that money would still be spent so the Government would recoup
GST elsewhere. ‘‘It could go on getting the car repaired, shopping at Pak ‘n Save, clothes for the kids – these people won’t be holding on to it, it will be spent on consumer goods, so there’s the GST coming back right there… but it will be spent on families’ needs, not on the pokies, then watching it walk across town and spent to support other people’s interests.’’
Mike Knell, acting chair of the Gaming Machine Association, and chief executive of the largest trust, the New Zealand Community Trust, said the pokie trust system was efficient, reliable and had overwhelming support.
‘‘Those organisations are entitled to their opinion, however I think it’s very short-sighted… they are taking an opportunity during a crisis to push their case,’’ he said.
‘‘Some of these people… are very well-intended and they try their hardest, but throwing the baby out with the bathwater is not a solution.’’
Knell said banning pokies would ‘‘would merely push gambling underground or online, which has no similar controls and the community misses out altogether’’. Martin Cheer, chief executive of another trust, Pub Charity, attacked the three organisations’ figures, saying they were being ‘‘deliberately misleading’’.
Cheer said the PGF ‘‘consistently misrepresent the facts for their own ends’’ and said they were ‘‘propagandists, not academics’’.
Cheer provided alternative figures to PGF, showing $929m of money lost, and $358m of grants, saying PGF had deliberately ignored what’s called ‘applied’ funds, which go to NZ Racing, the Youthtown charity and clubs.
He said $340m went in taxes and duties, $118m to the pubs for hosting machines – leaving only $113m in the costs of running the system (far lower than PGF suggests).
Cheer said a centralised model had been floated before in the ‘Flavell Bill’ (a pokies sector reform bill promoted by former MP Te Ururoa Flavell) and had 27,000 submissions against and PGF would be ‘‘myopic, naive and negligent’’ to call for the closure of pubs when the Government was struggling with offshore online gambling.
In a statement, Internal Affairs Minister Martin said she was ‘‘familiar with [the agencies’] concerns around gambling harm, but it’s also useful to see that they recognise that there is a related issue around community funding’’.
She said she was worried about the drop in gambling revenue ‘‘severely denting’’ returns and said that wouldn’t change much under level 2 when fewer machines would be available.
Knell said some trusts had been left ‘‘very vulnerable’’ because of coronavirus.