Surprise surge in pokie take

A sharp rise in spending on pokies despite falling machine numbers has prompted calls for an investigation into whether there is a link to money laundering.

Figures from the Department of Internal Affairs (DIA) show that $223.6 million was spent in noncasino gaming machines across New Zealand in the final three months of 2016, the largest quarterly spend since the end of 2008.

The annual spend was $858.1m, a 3.6 per cent increase on 2015 and the largest since 2011.

But the spending comes despite New Zealand’s longstanding ‘‘sinking lid’’ policy, which has seen the number of gaming machines fall by more than 11 per cent since 2011. By the end of 2016 there were 16,148 gaming machines in pubs and clubs, down from about 25,000 in 2003 and the lowest level since the late 1990s.

Paula Snowden, chief executive of the Problem Gambling Foundation, said the organisation did not know why spending – which has been increasing since 2013 – would be climbing.

‘‘We know that participation is down and that spend is up, and spend correlates with harm, so it is something the Government needs to look into very seriously.’’

The DIA is able to monitor pokie machine use electronically, and the figures showed the number of keystrokes – representing the number of bets – was falling, meaning the amount being bet was climbing.

Snowden said some of the increase was probably linked to a growing economy, but this was unlikely to account for all of the increase.

‘‘There are bigger bets happening. Are gamblers earning that much more money that they can have that much bigger bets?’’

An inquiry into Australian spending found that the machines were being used to launder money, and some clients of the Problem Gambling Foundation had reported that they were ‘‘given the money to do it for a purpose’’, Snowden said.

‘‘If they’re doing that [money laundering] in Australia, they’re likely to be doing it here.’’

Peter Dunne, the Minister of Internal Affairs, admitted the increase was a mystery.

He had asked officials whether more information was available on the reasons behind the rise.

‘‘It is a bit of a surprise. One would logically say if you reduce the number of machines the uptake will be down.’’

Dunne said it had not been suggested to him that money laundering was behind the increase, and DIA officials monitored activity at venues.

‘‘I suspect that if there was evidence of substantial money laundering it would have been picked up by now.’’

For the final quarter of 2016 the Mackenzie District had the largest pokie spending increase of any district in the country compared with the previous three months, up 18.8 per cent, while spending in Kaikoura plunged 19.6 per cent.

Spending on pokies increased in 55 of 67 districts across New Zealand.

"There are bigger bets happening … If they're [money laundering] in Australia, they're likely to be doing it here." Paula Snowden Problem Gambling Foundation