Crackdown coming for pokie operators

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The Government's gambling watchdog is promising a crackdown on the billion-dollar pokie industry, saying many organisations are running "rorts" and pocketing gambling money that should go to legitimate community groups.

The Internal Affairs Department gambling compliance unit is also worried operators are cooking the books and over-claiming expenses such as electricity, insurance, security and staff costs for the pubs and clubs where they keep the pokies.

In the latest move, the country's biggest gaming charity, New Zealand Community Trust (NZCT), has been forced to turn off its pokie machines for a day, on January 11, losing a day's earnings of $290,000, after Internal Affairs auditors questioned its expense claims.

Internal Affairs gambling compliance acting director Heather McShane said this was a "very serious" penalty.

Each year, $1.3 billion is gambled away in pokie machines. There are nearly 20,000 pokie machines in 1486 pubs and clubs across the country.

Gaming machines can only be run by non-commercial bodies to raise money for community groups. The societies that run them, and the pubs and clubs that host them, can only claim actual, reasonable and necessary costs.

Ms McShane said the department was worried at the potential for inflated expenses to be paid to venues. Almost all operators recently audited had failed to supply all the documents to support venue payments.

NZCT chief executive Mike Knell said he was confident none of the venues were claiming inflated expenses, but that "some of the documentation was not kept afresh".

"We've got to accept some liability there."

NZCT made $105 million last year from pokie machines, and gives $41m – 39 per cent of proceeds – to community groups.

The department has moved to better regulate the venue costs for pokie operators, with a new form for recording costs due out this year. It is also concerned about rorts that see people who run the machines or own the pokie pubs channelling money into their own pockets or their own clubs.

Last year, the department took action against three gaming societies for granting pokies funds to four trotting clubs after investigating conflicts of interest between the societies, the trotting clubs and the pokie venues.

Other investigations are ongoing, Ms McShane said.

Gambling compliance director Mike Hill wrote of his concerns in the latest issue of the Internal Affairs magazine Gambits.

"Unfortunately, what we have discovered tends to support the view that many individuals and operators within the sector capture gambling money, either for personal gain or particular interest groups.

"As we move into 2010, we will pay attention to these rorts."

Graham Aitken, from the Problem Gambling Foundation, congratulated the department for getting "stuck in" and said pokies caused a huge amount of suffering among problem gamblers.

"Eighty per cent of people who present to the help services have a problem with the pokie machines.

"We know they're dangerous machines."

POKIE FACTS

* Gaming machines are run by non-commercial organisations to raise money for the community.

* There are nearly 20,000 pokie machines in New Zealand. Each makes $47,520 a year.

* $2.5 million is lost every day in pokie machines

* In every $1 gambled, 87 cents is returned to players.

* Of the proceeds, a minimum 37 per cent must be returned to the community.

- © Fairfax NZ News