Pokie grant system 'is broken'

07:30, Sep 20 2012

Charities relying on pokie machine revenues are "addicts" feeding off problem gamblers, a group says.

Problem Gambling Foundation chief executive Graeme Ramsey today spoke to Parliament's commerce select committee about Maori MP Te Ururoa Flavell's Gambling (Gambling Harm Reduction) Amendment Bill.

The bill has been met with mixed reaction since it passed its first reading earlier this year, as community and sports groups fear change could result in less funding.

Ramsey said he understood some charities survived off pokie proceeds, but they were being unsustainably funded by vulnerable people as 40 per cent of revenue came from problem gamblers.

"One of the real addictions that we've got in this country are sporting groups and community groups that absolutely rely upon the funding from pokie trusts," he said, following the committee meeting.

"It's a moral conundrum isn't it. It's a moral conundrum that we are taking from vulnerable people to deal with other vulnerabilities or to fund our sports."


"We as a nation have to deal with those issues sooner or later.''

The bill would provide local communities with more power to determine where pokie machines may be sited and how the proceeds would be distributed.

It would also increase the proportion of net gaming profits distributed to 80 per cent, and end the practice of using profits for horse racing stakes.

Community Gaming Association executive director Brian Corbett said Ramsey's comments were emotive and inaccurate.

Grants made by association members came from the whole spectrum of people who played gaming machines, Corbett said.

He questioned how it was possible to know that 40 per cent of gaming machine revenue came from problem gamblers.

"It's one of those hoary cliches that get thrown around and people start believing it."
Ramsey said the Problem Gambling Foundation supported the bill as it was aimed at reducing the harm of gambling.

The current system was broken, encouraging people to place more machines into vulnerable areas to maximise revenue, he said.

"We believe that the grant distribution system has to be changed to alter these incentives.''

"We must separate the operation of machines from the distribution of grants. That is the critical thing for us to do.''

Pokie trusts currently control the cash flow of $750 million in the year ending March, and there needed to be more public accountability, Ramsey said.

"We've got 50 trusts, 50 sets of overheads, 50 sets of salaries, 50 sets of grant committees - there are more efficient ways of doing this.''

However, Ramsey said the foundation did not support placing the burden of distribution on local authorities as the bill suggests.

Local Government New Zealand president Lawrence Yule, who is also the mayor of Hastings, said there were questions about how the bill's proposed distribution system would be implemented.

"It's likely to impact on the capacity of local government," he said.

"We want to know who is going to pay for that, and secondly if it's not paid for from the proceeds, we would strongly urge that it shouldn't be paid by the ratepayers."

Yule said councils didn't feel comfortable with being both the regulator and distribution arm.

"We feel we'll end up in very compromising situations about regulation on where class 4 venues are in communities and at the same time those communities asking us for money.

"There is massive conflict and potentially pretty perverse outcomes,'' he said.

"We support measures to reduce the harm from problem gambling, we just don't think that the regulations, particularly as drafted, actually get us to that point.''