Time to put the heat on pokie charities - Herald Editorial

   The scrutiny on poker machines and the damage they cause has never been more intense. Such has been the product of SkyCity's proposed convention centre deal and Maori Party MP Te Ururoa Flavell's Gambling Harm Reduction Bill, which passed its first reading in Parliament last month.In such circumstances, it might be expected that pokie charities would be doing everything possible to keep their noses clean. Not a bit of it, apparently. According to the Problem Gambling Foundation, they are using money meant for community projects to oppose Mr Flavell's bill. Such activity succeeds only in further undermining their position and adding weight to the legislation.

   It is easy to see why the gaming trusts strongly oppose the bill. Their very existence is threatened. It would strip power from the gaming trusts that dominate the pokie industry in pubs and clubs, placing the power to distribute the $300 million available to community groups in the hands of committees appointed by local councils. Further, 80 per cent of the poker machine proceeds would have to go back to the communities where the gambling took place.

   The latter aspect has much to commend it. At the moment, poorer communities suffer the consequences of this insidious and addictive form of gambling disproportionately. It makes sense that, as far as possible, the proceeds from pokies help those most harmed by them, rather than community groups, charities, schools and sports clubs in areas where they barely have a presence.         This may encourage the installation of more pokies in such suburbs. The relatively small number of users would, however, temper any such development. Equally, the 80 per cent threshold, rather than a dogmatic 100 per cent, provides flexibility in the distribution of money.

   It should be far harder to support the transfer of that distribution power from gaming trusts to local committees. Such an upheaval makes sense only if the pokie charities are not properly and fairly maximising returns to the community while minimising the harm caused by pokies.

Unfortunately, they are erring in rather too many cases. Two years ago, the Internal Affairs Department suggested that 30 of the country's 50 gambling trusts had "issues of non-compliance" similar to those of the Trusts Charitable Foundation, which paid more than $500,000 to one of its trustees to sign up new pokie venues.

   There has also been discontent over the vast sums going from poker machines to trotting clubs in a way that has raised questions of conflict of interest. In 2009, three trusts were banned from giving any more money to four trotting clubs after their grants to them soared from less than $500,000 a year to $5.4 million over two years.

   Issues of transparency and non-compliance raised by these episodes have been compounded by the money apparently being used to oppose Mr Flavell's bill. Rules governed by the Internal Affairs Department stipulate that pokie proceeds should be spent on reasonable and necessary purposes. It is difficult to see how this spending qualifies. Ethically, it is certainly unsustainable. Money meant to be returned to community groups or to fund harm minimisation measures is being used unconscionably.

   It hardly helps that the Pub Charity Incorporated chief executive insists that the harm caused by pokies is overstated. An abundance of research suggests this is far from so.

The pokie charities' behaviour is self-destructive. It may be all the more reckless given that parties should, by convention, allow their MPs a conscience vote on gambling issues. They will have only themselves to blame if Mr Flavell's bill gains far more traction than initially seemed likely.

Pokies and Porkies

Te Ururoa Flavell MP

Am I the only one who thinks folks from the pokie trusts have been telling a load of porkies lately, in their desperate attempts to get public opinion on side?Te Ururoa Flavell’s Gambling Harm Reduction Bill certainly seems to have caused a flurry of lobbying – with Pub Charity and the Lion Foundation, two of the largest trusts, doing much of the lobbying.
In the last week they’ve:
- Emailed thousands of community organisations who are grant recipients, asking them to make submissions opposing the Bill
- Launched a website called Ban the Bill
- Spent tens of thousands of dollars on a 12-page insert in the weekend papers promoting their organisation’s role in the community.
From what I can see, however, all this activity does seem to be based on self-interest, rather than in the best interests of the community.
The Bill, which passed First Reading with a massive 85 votes in favour, with 7 votes opposed, would do away with these self-appointed pokie trusts. They would be replaced with local distribution committees set up by councils, in much the same way the Government’s Creative NZ Fund is currently managed.
Under current law, these trusts are only required to redistribute about 37% of pokie machine takings back to the community. So only about $240 million annually from pokie machine losses goes back to communities. The rest is split between Government levies and the well over $100 million which goes towards the trusts’ own administration costs.
This Bill increases the percentage of pokie machine takings which must be given back to the community to 80%. If the Bill becomes law, the DIA’s latest figures indicate that over $224 million in additional support would be sheeted back to the community in grants, or a total of about $464 million.
The Bill also requires new mandatory gambling addiction prevention measures on pokie machines – something problem gamblers desperately need.
All of this runs counter to what the industry’s saying in the media. Martin Cheer, CEO of Pub Charity, has claimed that the Bill would mean less money for the community. That’s ironic, given that his own outfit is short-changing community groups by nearly $28 million a year, returning only 37.7% of the $65 million currently lost via the pokie machines it owns. That’s one of the worst rates of return of any pokie trust. Mr Cheer ought to clean up his own backyard before criticising this Bill.
What there would be less money for is the expensive salaries and flash offices of the trustees and management in these self-appointed groups. And possibly less for professional rugby and other professional sports.
The reality is that communities are being ripped off by cronyism and rorts in the pokie industry. The funds consumed by the pokie trusts are enormous. The Green Party believes it’s time some transparency and accountability was brought to bear. That’s why we’re supporting Mr Flavell’s Bill.
Submissions to parliament’s Commerce Select Committee close 21 June; to make an online submission click here.
- Green Party MP Denise Roche