Corruption rife in pokie trusts system: Former director

Francis Wevers

[By David Fisher, NZ Herald]

   The former boss of the industry association representing pokie trusts says the system is corrupt and needs total reform.

   Former Community Gaming Association executive director Francis Wevers said the incentives to take advantage were too powerful. The result was "endemic non-compliance" and "corruption" in a business which had a turnover of $9 billion. About $850 million was distributed to the Government, the community and pokie trusts.

   The pokie trusts face extinction under a private member's bill brought by Maori Party MP Te Ururoa Flavell, which would strip the trusts of their powers and create a new system for distributing funding.

   His proposed bill creates a system where local government would distribute the cash with a focus on making grants to local organisations.

   The bill has led to pokie trusts organising a revolt among community and sporting organisations, using the spectre of disappearing funding.

   Mr Wevers said he believed a new system would lead to greater levels of funding going back to the community, though did not believe local government was the right conduit.

   He said the flaws in the current system gave the hospitality sector too much power, allowing host pubs to command too much of a share of pokie proceeds under threat of shifting allegiance to other gaming trusts.         "Right from the start, the hospitality sector has seen the requirement for money to go back to the community as an imposition."

   Mr Wevers said attempts to reform the industry failed as those involved "reverted to behaviour to maximise returns to venues" and trusts. "There were a whole of lot of people and lawyers assisting them who were looking at ways to avoid the law."

   He said trusts sought professional advice to create funding structures that worked around the law, arguing they were not forbidden by the rules. "What they were doing was corrupting the intent of Parliament."

   Mr Wevers said after leaving the CGA he had written a report highlighting the flaws in the industry which went to then-Internal Affairs minister Nathan Guy. He said there was a willingness to fix the system.

   In the report, he said more than half the pokie trusts were subject to sanctions by the Department of Internal Affairs after breaches of legal and operating obligations.

   Mr Wevers said sanctions were light and infrequent. They were seen as an "irritant rather than a disincentive" and "calculated as an affordable cost of business".

   He said it was critical Government found a solution because of the need for funding.

   "There are too many sports organisations that are so dependent on pokie money because they don't have any capacity to raise it any more from people who play the sports."

   Mr Wevers said eradicating pokie machines was not the solution; those who wanted to gamble would find furtive methods to indulge.

   He had made a submission to the select committee considering Mr Flavell's bill, recommending a new system for distributing cash. He believed it should be divided and tendered on a territorial basis with decisions based on those who offered the lowest level of expense and greatest return to the community.

   There also needed to be greater harm-minimisation measures, including swipe cards for players that recorded their level of gambling.

   A further measure he recommended - also in Mr Flavell's bill - was removal of the ability to fund racing stakes with pokie money. Gambling money being used as a gambling stake was "bizarre".

   Current CGA executive director Brian Corbett said he rejected Mr Wevers' views on pokie trusts but would not comment further.

   Internal Affairs Minister Chris Tremain, the third minister to hold the role in a year, refused to be interviewed. In a statement, he conceded "there may be wider concerns in the sector which need to be addressed".

Hamilton City Council votes to support Bill

   By a vote of 10-2, Hamilton City Council today, supported the thrust of the 'Flavell' Bill to remove pokie trusts from the role of distributing pokie machine profits, and place that job in the hands of a 'local, publicly-accountable, democratically selected entity'.

   Only the city's Mayor, and a Councillor with previous close links with the Waikato Rugby Union, opposed the move.

Mayor Hardaker supported pokie trusts

   The Council also supported the Bill's move to require at least 80% of pokie profits to be given back as grants to the local community, to improve gambling harm reduction measures, to give Councils power to license ALL pokie venues, not just new ones, and to end the practice of using pokie money to prop up race meeting prizemoney.
   At a meeting of the Council's Policy and Strategy Committee, discussion took place around the "rorts and ripoffs" associated with the pokie industry, with one Councillor describing his experience of dealing with pokie trust funding processes as being "close to corrupt."
  Evidence was given that Netball, with more players than Rugby Union, received only one quarter the amount of grants from pokie trusts, while sports and racing recieved 53% of all grants in the last year - greatly exceeding community and emergency services, or any other sector.
  Councillors were not convinced by industry 'scare tactics' suggesting that community and sporting groups would get less support under the Bill, and agreed that the current 40% return rate was pathetic, and "not balanced."

Richard Boock (Sunday Star Times 24/6/12) on pokie funding of sport

   IT'S HARD to parody sport these days. Seriously, the type of material that might have once brought down the house at a stand-up comedy festival is now being uttered with poker-like faces at business and management meetings. And the thing is, no-one laughs at all. Where once there would have been people gasping for air and weeping at the humour of it all, now there are just sage nods and frowns of concern. Nothing seems too absurd.

 

   The latest episode surrounds sport's reaction to an attempt to reduce gambling and gambling- related harm in New Zealand, via Te Ururoa Flavell's Gambling Amendment Bill. This is a plan to both lessen the negative effects of gambling in New Zealand and to better distribute pokie machines proceeds than they are at present. If the bill is passed, 80 per cent of the funds will have to be returned to the regions in which they were collected.

You might expect sport would support these types of noble objectives. After all, problem gambling is an ongoing blight within the community; sport is part of the community, therefore it stands to gain as much as anyone, right? Yes? Well, actually no. The way sport sees it, the more gambling we have, the more pokie machine money it can get its hands on, therefore the healthier its bank balance. It opposes change for specifically this reason.

   No, I'm not having you on. Earlier this month the National Sports Organisations Leadership Group, representing most of the country's biggest codes, lobbied its members to oppose the bill on the grounds reduced gambling would equate to reduced funding. Naturally enough, it also had massive problems with the redistribution proposal, sensing it would miss out there as well. Fewer funds for sport, it argued, was a greater concern than less problem gambling.

   Truly, sport's sense of entitlement knows no bounds. Even when it was pointed out to the NSOLG that its opposition to the Gambling Harm Reduction Bill was inappropriate, it chose to remain in denial. Chairwoman Raelene Castle recently tried to justify the stance on the basis that "gambling is a reality in every society in the world". It nicely summed up the group's sense of responsibility. If it's a reality and there's money in it, sport's happy to suck it dry.

   Maybe we shouldn't be too surprised. I mean, it's remarkable how far sport has been prepared to stray from its fundamental values in pursuit of cash. So much for priorities such as health, and physical and mental wellbeing. What a laugh. Sport routinely sells them off for all the money it can get. The NSOLG has been using those exact terms to justify its opposition to the gambling changes. It even had the gall to talk about how sport brings communities together.

   The real message? Essentially it's that the more gambling we have, the better off we'll all be. Because of sport, that is. And if that sounds bat-shit crazy then I can only say, it wouldn't be for the first time. Those with decent memories will easily remember the drama we had trying to wean sport off "Big Tobacco". The squeals of outrage, the cries of hardship, the warnings about grassroots' sport.

   Truth is, sport's never been able to do the right thing where money's involved. Neither has it been able to learn from its previous mistakes. Even now, it's so dependent on the booze industry it's lost any capability to see sense. Try suggesting a ban on alcohol sponsorship to the NSOLG and you'll likely get the same answer: "We simply can't do without the money; it'll ruin us." Sport's never been able to see the bigger picture.

   It's the same, too, with New Zealand sport's ongoing dilemma regarding Sky TV's near monopoly in the broadcasting market. When clearly, a move to support anti- siphoning legislation (guaranteeing free-to-air live coverage for selected "iconic" events) would be in everyone's best interests, few of our national sporting organisations can see past an initial drop in revenue. Nor the end of their nose, for that matter. What's best for them in the long run doesn't seem to compute.

   Still, what sport is saying to the country over the Gambling Harm Reduction Bill carries its inflated sense of self-importance to brazen new heights. It's akin to suggesting we don't want people smoking fewer cigarettes because it'll mean less tobacco tax. Or opposing moves to ease traffic congestion because it might mean less road tax. If you had John Clarke (Fred Dagg) reciting some of this stuff word for word, we'd all be in hysterics.         But no, the NSOLG wants us to take it seriously.

   Just as astonishing is sport's apparent newfound expertise in the field of problem gambling, and its intimate knowledge of best practice when it comes to a suitable funding mechanism. If you believe all you read, you could be forgiven for thinking that it's not simply opposing Flavell's bill for its own sake, but for the good of the wider community. That's right, it's just a coincidence that it stands to retain millions of dollars of funding if its objections are allowed.

   But the most insane part? That sport seems genuinely convinced people will accept its twisted viewpoint at face value, without considering its clear conflict of interest. That, like the emperor in the Hans Christian Andersen tale, it appears completely unaware of how much it's exposing of itself and its dodgy principles. That it can stand up naked in public and crack the most outrageous funnies, all the while keeping a straight face. Extraordinary stuff, indeed. Oh well. We can't laugh with it any more, that's for sure. But we can certainly laugh at it.