Editorial: Pokie rorts must be stopped

Last updated 05:00 13/06/2012

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OPINION: The gaming industry has been quick to highlight the glaring flaw in Maori Party MP Te Ururoa Flavell's legislative attempt to tame the pokie machine wild west.

Requiring the industry to distribute 80 per cent of pokie profits back into the communities in which the machines are located would shave about $280 million off tax revenue and render the industry uneconomic.

Presently just 37 per cent of machine proceeds are distributed to the community. The remainder is split between the Government in the form of taxes and the industry in the form of rents, salaries, machine hire and administrative costs.

However, the flaw in Mr Flavell's gambling bill is easily remedied. The number 80 can be changed at the stroke of a pen. Neither Mr Flavell nor other parliamentarians should allow themselves to be dissuaded by the industry's campaign against the bill.

When it comes to its own affairs, the industry has shown itself to be an unreliable witness. Commitments made are broken; laws and regulations are flouted.

According to a report prepared last year by the former chief executive of the Charity Gaming Association, Francis Wevers, more than half of the country's gaming machine operators have been sanctioned by the Internal Affairs Department for breaching their legal and operating obligations.

For five years Mr Wevers served as the industry's mouthpiece, defending it against external criticism while working internally to try to clean up its operations. In his report, prepared for Nathan Guy, a former internal affairs minister, he effectively admits he failed completely.

An industry that is supposed to operate for the benefit of the community is instead run for the benefit of the racing industry, some major sporting codes, pub owners, gaming machine manufacturers and the highly-paid staff of some gaming machine societies.

Mr Wevers blames the "all pervasive and pernicious" corruption in the industry on its legislative environment. The incentives to engage in unlawful activity outweigh the consequences of getting caught.

The harm caused by pokie machines is well documented. Gambling addictions devastate some communities. The supposed tradeoff is that those communities get funding for worthwhile projects.

There is an element of truth to that. Many sports clubs and volunteer organisations have become almost totally dependent upon pokie machine funding. However, much of the money raised in poorer communities is distributed on the other, wealthier, side of town, and pubs and gaming machine trusts are inflating their costs to boost their bottom lines.

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The industry has been given ample time to get its house in order. It has failed to do so. It is time for lawmakers to take a hand. The business of operating pokie machines should be separated from the awarding of grants and operators should be held accountable for their failings. Mr Flavell's bill presents an opportunity to accomplish both objectives. His fellow parliamentarians should seize it.

- The Dominion Post

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