Problem gambling court battle set

17:00, May 17 2014

Problem Gambling Foundation will this week take legal action to stop the Ministry of Health dumping it in favour of the Salvation Army.

The move comes as papers released under the Official Information Act show the PGF and the ministry embroiled in a long-running argument over the foundation's right to speak out on gambling issues. It includes the ministry threatening to terminate the foundation's contract if PGF didn't halt a campaign called "pokie free and proud of it" promoting pokie-free pubs. The PGF has engaged Wellington lawyer Mai Chen to act for it.

It will try to force a delay to the scheduled July 1 handover to the Salvation Army. PGF chief executive Graeme Ramsey said: "We don't understand the decision. Mai Chen's first reaction was that it didn't look right. Now she's investigated it, it doesn't smell right either."

Ramsey wouldn't discuss the detail of their claim but ministry papers obtained under an OIA suggest PGF could challenge on the grounds of good performance. A 2011 analysis conducted by management consultant KPMG, at the behest of Associate Health Minister Peter Dunne, said PGF had improved its performance to 100 per cent of its service targets in 2010. The report said the sector had improved time spent with clients, reduced costs and achieved better public awareness.

In the report, the consultant said one disadvantage of maintaining the existing system was that it "reduces ministry control over areas such as staff competency or political neutrality" - meaning the ministry could not control the foundation's public statements on political issues.

The PGF has always been a vocal critic of pokie machine rorts and gambling harm. It believes, as an independent body with other income streams, it has the right to speak out. The ministry argues there should be no perception government money is being spent on campaigns.


The ministry fielded a series of complaints between 2010 and 2012 from Martin Cheer, chief executive of pokie trusts, Pub Charity, that PGF was "abusing the funding stream" and was not politically neutral. Cheer wrote to Dunne saying: "We would welcome any attention you could bring to bear on this matter." Cheer was unable to comment. But an industry source said PGF had "not just shot themselves in the foot but blown it off" by not concentrating on their core work.

That led a lawyer for PGF, Duncan Webb, to write to the ministry in late 2010 to restate PGF's right to an opinion and as a non-governmental body it was not bound by civil service rules.

In May 2012, the ministry threatened to terminate PGF's contract following another Cheer complaint when the foundation put advertising stickers on pokie-free pubs in Christchurch. The ministry said that suggested PGF wanted pokies abolished, which was against government policy. PGF was called to a meeting over the "alleged contract breach of political neutrality clause".

In a letter, the ministry said it was "concerned that PGF continues to breach the agreement in this way and any further breach may result in the ministry taking further steps". The letter said "perception is important".

Ramsey said the campaign had been designed to guide problem gamblers to places where they wouldn't be at risk of relapsing. PGF withdrew the campaign.

Sunday Star Times