Poker machines in clubs and pubs gobble $6 billion a year. Yet only $199 million makes it to worthy causes, many of them bloke- oriented sports. What’s wrong with our gambling industry? I n a suburban Christchurch pub at 10.30am, a dozen people sit in the smoke- filled darkness of a bar- room casino. Music like cascading coins blares from flashing machines. Two men and 10 women pour $2 coins into the hungry slots.
Non-casino slot machines like these are taking $6 billion from the pockets of gambling New Zealanders every year — that’s six times the Government’s annual spending on police.
That money is recirculated through the system as wins and losses until eventually the punters have spent $6 billion, won $5.4 billion, and lost $600 million to the machines.
Gamblers may be placated by soothing reminders that the money goes to the community. But how easy is that money to access?
Almost 5000 machines nationwide are owned by UFABet clubs, such as RSAs and rugby clubs, which are allowed to use the takings to fund their own establishments.
Others are owned by casinos for commercial gain and are subject to much tighter regulations. Every machine is electronically monitored, and a minimum of 87 per cent of gambled money must be returned as wins. Casinos are not compelled to donate to the community but often do. There are 500 slot machines at Christchurch Casino, making it New Zealand’s second largest one-stop shop for pokie players.
However, most pokie machines — 17,264 — are owned by local and national societies which distribute the funds to the community. These establishments may display the word “casino” on their shopfronts, but the machines inside are classified as non-casino pokies as their profits go to the community.
About 90 cents in every dollar gambled is returned as a win. The 10 per cent which is retained — a total of $597 million nationwide — is split again, this time in three equal amounts to cover administration, taxes, and community grants.
This means just 3.5 cents from every dollar is going to the community.
A slice of the $199 million in grants can be obtained by filling out an application form, available from the owners of the machines, or the pubs that house them.
In the last year six pubs around the country have been prosecuted, none of them in Christchurch, for refusing to hand over the application forms.
It is against the law for pubs to refuse to issue the application forms to groups they do not consider worthy of the pokie funds being spent by punters at their establishments.
Several cases investigated by the Department of Internal Affairs revealed pubs were asking potential applicants what benefit their organisation — be it Girl Guides, arts festivals, women’s counselling services — could possibly offer a bloke-oriented business.
They were told pubs were happy to give grants to male sports teams because those teams would then feel obliged to drink at their establishment. Girl Guides, for instance, have no such patronage to offer in return.
It is against the law for pubs to receive any pecuniary advantage from the granting of funds to a community group.
Proposed changes to the Department of Internal Affairs (DIA) licensing conditions will take the application forms out of the publican’s hands to eliminate this problem.
Once forms are received, societies must determine which applicants will get the money. The Gaming and Lotteries Act 1977 states that societies can give the money for any “charitable, philanthropic, cultural, or party political purpose”. Societies decide who will be their target beneficiaries.
DIA must accept those target beneficiaries, such as sport, education, or the arts, as long as the focus is the community or any section of it.
The Scottwood Trust, of which former All Black great Colin Meads is a trustee, has a wide- reaching definition of potential benefactors but in reality tries to evenly distribute its grants between sport, community, and education groups.
Scottwood Trust’s Hamilton- based site liaison officer, Sharon Hollis, says the organisation began with pokies in two pubs in Christchurch in 1990. It grew out of a group raising funds for junior sport, and now owns 1000 slot machines at 80 sites around New Zealand.
For those successful in obtaining application forms from pubs, or who go direct to the machine-owning societies to obtain them, percentages will again play a role in the distribution of funds.
Each society has a board of trustees which assesses applications and determines the amount that will be granted.
At this stage in the process, pubs and bars are again being watched closely. Establishments housing the society’s pokies cannot put in a good word for particular grant applicants.
DIA Gaming and Censorship Regulation (GCR) group general manager Keith Manch says complaints from the community, audits, and anecdotal evidence suggest it has become “common” for pubs and bars to involve themselves in funding decisions, thus breaking the licensing conditions.
“This includes refusing to give application forms to some applicants, putting conditions on applications (such as requiring the applicant’s members to drink at that pub, or insisting the applicant must buy goods or services from a particular business), and not passing some applications to the society that owns the gaming machines,” Mr Manch says.
“Sites must have no involvement in decisions about granting funds to community groups.”
The benefit for publicans should not be in guaranteeing patronage from a particular group, the Department of Internal Affairs says, but in the payments from trusts hiring their premises for pokies and increased drink and snack sales.
Inevitably, some applications are rejected. The successful grants are published, by law, every six months so the public can see where their hard-gambled coin has gone.
A June publication produced by three of the large national societies, Lion Foundation, New Zealand Community Trust, and Scottwood Group, revealed hundreds of worthy Canterbury causes had been given a helping hand courtesy of pokie money. The Christchurch Bone Marrow Transplant Trust got $15,000, more than $8000 went to the Sydenham Heritage Trust, and $8000 went to the WestpacTrust Secondary Schools Sports Trust.
But there appears to be disproportionate spending on male-dominated sports.
Department of Internal Affairs figures show rugby alone received $15.7 million funding in 1999-2000. Netball, by comparison, got $2.6 million.
Schools, the largest beneficiaries of all social and community services applicants, got $10 million — two-thirds of rugby’s funding.
In total, Canterbury organisations received more than $20 million in grants in 1999-2000.
In 1988, the Government made a decision to start licensing gaming machines. Societies began from that date. The Casino Control Act 1990 allowed casinos in New Zealand.
Changes in gambling regulation are being designed to curb the rise of problem gambling and provide closer, clearer control of slot-machine management.
The Responsible Gambling Bill proposes local authorities be able to cap pokie proliferation in their jurisdiction and ban further expansion of the slot-machine trade. Every machine will need to be electronically monitored, a roll-out which will cost many thousands of dollars per machine.
Trusts donating profits from other forms of gambling, such as Lotto, will continue to be able to grant money to political campaigns or parties, but the cashflow from non-casino pokies to politics will be cut.
A Government select committee had not reported its assessment of the bill when Parliament rose for the July election. It will not be known for some weeks whether a new select committee will build on the former committee’s recommendations, or start the process over.
The Salvation Army’s Oasis problem-gambling services in the five main centres, and Queenstown, received 1000 new clients last year.
The army in submissions on the Responsible Gambling Bill has called for a reduction in the number of pokie machines and a cap at 20,000. It also asked that community grant money be funnelled through the Lottery Grants Board.
The Department of Internal Affairs — which has doubled the size of its gaming regulation team in the last six months to cope with growing demand — is reviewing its gaming-machine licence conditions.
DIA is currently considering public submissions on its recommendations, which include pubs no longer being able to distribute application forms.
In October last year, changes to gaming laws made it compulsory to advertise funds to the community.
A total of 415 trusts, clubs and societies have been audited in the past year. Nationwide, 477 pubs received warnings about their pokie management — 182 of those in the South Island.
Six licences were cancelled, two by DIA’s Christchurch office, and two licences were suspended (one by the Christchurch office). Most warnings related to technical matters such as signage.
GAMBLING – THE FACTS
* 6000 new gambling addicts call the Gambling Problem Helpline every year; 81 per cent pinpoint pokies as their downfall.
* Pokies in Christchurch Casino: 500.
* Pokies in Christchurch bars, clubs, and pubs: 1991 across 184 sites.
* Nationwide, $6 billion is gambled on pokies every year — $5.4 billion is won back by punters, $600 million is kept by the machine.
Common signs of problem gambling:
* Sudden, lavish gifts or reckless spending.
* Borrowing money to pay ordinary bills.
* Unexplained disappearance of valuable personal possessions.
* Neglecting personal grooming, hygiene, daily chores, household responsibilities, health checks, elderly relatives.
* In trouble with the law over money matters.
* Stealing from family wallets or coin jars.
* Spending savings, or cutting back superannuation contributions.
* Emotionally pre-occupied.
If you need to talk to someone about problem gambling, please call:
* The Problem Gambling Foundation, ph 379-2824.
* The Salvation Army Oasis Centre for Problem Gambling, ph 365-9659.
* The Gambling Problem Helpline, ph 0800 654-655.
There are three places you can play poker machines:
* At the casino, where the money earned is profit for the business.
* At a community club, such as an RSA or sports clubs, where the machines are owned by the club and all profits are spent on the club.
* At a pub, nightclub, or bar. In this case the machines are owned by a trust or society which pays the pub a flat rate for rental of space for the pokies.
* Application forms are available from either the pubs, or the trust, or society which owns the poker machine. The pub should have no say in how the profits are spent.
* Applications go directly to the society or trust for consideration. It then spreads the grants according to their own definitions of who their target beneficiaries are.
Grandmother reduced to dire poverty
Jill is in her 60s, struggling to see the reason for living, and in the most dire financial situation of her life. Battling a tragic addiction to slot machines, this bubbly Christchurch grandmother has had days where she has not had money to eat.
Jill’s vice, like that of 81 per cent of gamblers nationwide, is the bright lights and tinkling bells of the pokies.
One night in April this year, she gambled her last $2. She had lost $17,000 in six months. This included her life savings, a $5000 loan against her car, and the maximum amount on her credit card.
For every $2 she gambled, fewer than 7 cents went to the community.
The Christchurch widow says she gambled for the company. If she had trouble sleeping, she would get up in the middle of the night, do her hair, and toddle off to the casino for a flutter. She knew she would always find company there.
Christchurch Casino CEO Arthur Pitcher says he has staff trained to detect problem gamblers. The casino’s 500 slot machines do a steady business with older punters during the day and younger ones at night. When patrons turn up with fat wallets but shabby pants, the casino cloakbay will offer dress pants to change into.
Jill remembers the staff showing concern when she moved on to the bigger denomination machines and says they often suggested she get help.
Pitcher says the Christchurch Casino has, until recently, been unable to ban problem gamblers.
The Department of Internal Affairs says a recent Auckland High Court decision involving Sky City Casino has confirmed casinos have the right to ban anyone without having a reason.
However, the decision must not be discriminatory.
Arthur Pitcher says he has yet to test the precedent. His staff are trained to notice changes in a gambler’s behaviour. Problem gamblers stop changing their clothes, start coming in at the exact same time every day (perhaps the only time they can secretly get away from work or family), and their treatment of staff degenerates as they become more desperate.
There are more than 100 cameras in the casino watching the gamblers as they play.
Christchurch Casino has, for years, been pushing for greater gambling awareness, he says.
“It’s in nobody’s interests that people destroy their lives gambling.”
Four in 10 New Zealand adults gamble weekly. This includes Lotto, sports and race betting, and pokies.
Jill had herself banned after she spent her last $2. Christchurch Casino has 500 people on self-imposed bans.
Nationwide, pokies have multiplied from around 13,700 nationwide in 1994, to a current 22,113 across 2150 sites nationwide. In 2000-2001, the amount spent on non-casino gaming machines increased by nearly 33 per cent.