Gambling Bill

I raise a point of order, Mr Chairperson. Supplementary Order Paper 132 has not been before the Government Administration Committee. As I said earlier, it has 163 new clauses in it, plus changes to the schedules. I seek your indulgence that, when we move through these parts of the debate, you will accept multiple calls so that we can have a fair debate. I, for one, will seek multiple calls on the remaining parts.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for his contribution. I recognise that we do have a large Government Supplementary Order Paper, and I am also aware that Standing Order 178 no longer exists as it has been suspended. I will certainly, in taking into account the number of calls that members make, recognise the importance of the Supplementary Order Paper.

Part 1 gives the definitions. As we have said, this bill defines the various forms of gambling, and, as is usual in a bill, Part 1 is basically the defining part. There are two important issues that I want to talk about.

One is the word “casino”. Throughout this bill we have made it absolutely clear what a casino is, because there are many establishments around the country calling themselves casinos, and that is very confusing to people. There are casinos, casino bars, and an amazing number of gambling outlets calling themselves casinos. One of the points that the Government Administration Committee wanted to make absolutely clear is that “casino” applies only to what is defined in this bill, and is not the generic name for any gambling outlet. Other gambling outlets will have a period of time in which to give themselves another name, and they will not be covered by the casino part of the legislation.

The other point that I think is very important is the definition of “territorial authority”. I have heard it said in the Committee today that local government will have no say. The important thing in this bill is that local government does have a say. Local government bodies should already have been planning for this bill and be working on their gambling plans. It is not correct to say that local government does not have a say. The select committee was very careful also to outline whom local government bodies should consult when establishing their plans, and to make sure that they did consult their communities of interest.

So I just wanted to point out two things in the definition clause: firstly, a casino is a casino, and not any gambling establishment—a cafe or casino bar that has pokie machines cannot call itself a casino—and, secondly, local government is in the bill, under the definition of “territorial authority”.

I rise on behalf of the ACT party to talk about Part 1, which deals with the purpose of the bill—one of the important areas that we have to debate. The purpose of this bill seems to be in total contradiction of what the bill actually will do and what the bill actually will promote.

One of the purposes of this bill is to control the growth of gambling. There is a real anomaly here, because if one looks at Internet gambling one finds—as Judith Collins has already pointed out—that research has shown that it is one of the most addictive forms of gambling, yet it will now be promoted by a Government body. At the moment, we can all access Internet gambling, but it is run by offshore operators. Would it not be far better to have Internet gambling run by New Zealand - based operators, so that we can have some sort of control over the age of people who access it, instead of having it run by a Government monopoly? We all know why it will be run and promoted by the Lotteries Commission—the Government body. It is because the Government will be able to suck out of it as much tax as it can. We know why this Government likes to get lots and lots of nice tax from organisations: to buy votes. This is a heartless, “tax and bribe” Government.

💬 Darren Hughes: Ha, ha!

I thank Labour members for that round of applause. They obviously agree over there.

The purpose clause states that the bill will “prevent and minimise the harm caused by problem gambling,”. Well, I have already gone into that with Internet gambling. But problem gamblers will now be the problem, if one likes, of the Ministry of Health. What on earth have problem gamblers in this country done to deserve that? The Minister is absolutely hopeless with the portfolio she has right now, and she will have problem gamblers added to that. Why does this Government not just say it does not care about problem gamblers, instead of pretending that it cares about problem gamblers then handing them over to the Ministry of Health? So that is another part of this Part 1 that is totally demolished and down the gurgler.

The purpose clause also states that this bill will “facilitate responsible gambling;”—well, we know that is an oxymoron—and “ensure the integrity and fairness of games;”. What is fair about giving Sky City a monopoly on casinos? This bill will prohibit any new casinos. That is something that has been pushed by the Alliance from way back. Because this bill has taken so long to get to this stage, Sky City—and I do not blame it; any good business would do the same in the circumstances—has been given the opportunity to get to the stage where it has the “Situations Full” sign up; it has got all that it wants in this country. So this bill will promote anti-competition. It would be far better for this Government to allow more casinos to be set up, because if one has more casinos one has greater competition, higher standards, and better self-regulation. If one industry is in control and has a monopoly, what is the point in having an industry body that is self-regulating?

The other thing that I would like to go into is the gaming machines. One of the purposes of the bill is to “limit opportunities for crime or dishonesty associated with gambling;”. Gaming machines within casinos in this country amount to around 3,000. Outside casinos there is something like 25,000 gaming machines. The Government gets 4 percent plus GST of the total take of those gaming machines.

If this Government were really serious about reducing the growth of problem gambling, it would totally ban gambling. But what we see once more is hypocritical legislation, just like the smoke-free environments legislation. This Government will not stop being so hypocritical and ban gambling.

This part contains the definition clause. It is a very substantial part and there are some significant points in it.

One of the areas that I would like to look at is lotteries. Most people in this country would say that they know what a lottery is. They would say it is something that, often, the Government or the State runs, it is like a raffle but bigger, it is done once a week or maybe twice, and it is something that is hardly likely to cause addiction. But in this definition clause the Government is actually removing that sort of definition of a lottery. Now, it will not be limited to that; it will include the operation of pokie machines, and it certainly will not exclude the use of remote interactive gaming.

I do not have a problem with remote interactive gaming if it is done well, responsibly, and with proper controls. I do have a problem with the thought that the Government is promoting and selling Internet gaming in competition with the private sector, or, in this case, to the exclusion of the private sector. Worse than that, it is sort of like the Government deciding it will now sell cigarettes and alcohol because that way it will get more of the take. The role of the Government in the gambling industry is the role of a regulator and of a tax collector, and that is it. The Government should not be out there competing with the private sector, and doing all the things it can to encourage gambling; what it should be doing is regulating and collecting taxes. That is its responsibility. So that is one of the problems I have with this whole new definition of a lottery.

One of the points made by the previous member speaking is that the Ministry of Health will now be in charge of problem gambling. Once I would have thought that was probably a good idea. When I was the chair of the Casino Control Authority I probably made submissions along that line. However, having spent a year on the Health Committee, I have absolutely no faith whatsoever that the Ministry of Health or the Minister of Health are the right people to be looking at problem gambling. I have absolutely no faith whatsoever that they will be able to help one problem gambler.

I look now at the definition of a casino. I rejoice in the fact that the Government has finally listened to my pleas and those of the Casino Control Authority and the casinos, and we have a definition that means that a casino is an organisation that is regulated as a casino—not a “kasino”, which we have often seen. Registered casino operators object to the fact that they are damned all the time because of the practices of little operations with 18 pokie machines that call themselves casinos yet are not regulated by the same rules.

There are lots of reasons it is important to look at the regulation of casinos. One reason is the huge increase in money-laundering in this country and overseas. Just the other day I read in the New Zealand Herald a report on the increase in money-laundering, and on the fear of it being a major operation in New Zealand. I could tell any member how to money-launder through a casino, and I am sure there are many other people who could do that. I have looked at how money-laundering can be stopped in New Zealand. [Interruption] It is a very serious issue. Darren Hughes, who is out of his seat and making all sorts of rude interjections, is probably not old enough to go into a casino or a gaming area, but he should be aware that there is a massive methamphetamine situation in this country, which the Government has ignored, there is a massive drugs problem, and we now have a situation where people constantly use casinos, and every other opportunity they can, to money-launder. I do not think that is very funny. The member Mr Hughes should be aware that it is a very serious issue. We do not need organised crime in this country. One of the great things about the present rules is that we have tried to keep organised crime out of the casinos.

In particular, I bring the Committee’s attention to clause 4, which includes the definition of a number of things. First, I ask the Minister to be prepared to take a call on a very important issue that was sneaked into his Supplementary Order Paper the other day and not debated in the select committee. It relates to the definition of “corporate society”. Page 13 of the bill states that “corporate society means a society that is—”, and four subclauses are then listed that relate to “corporate society”. The Supplementary Order Paper states that a corporate society will be “one society”, and there is concern about the impact that that will have on the operations of a number of existing businesses with partnerships and companies under the one umbrella.

My Supplementary Order Paper tidies up the issue the Minister is trying to overcome. I have no difficulty with what the Minister is trying to do—that is, stop unincorporated partnerships, and Supplementary Order Paper 132 does that. I have no objection to that at all, but we need to identify—and certainly I will be asking for the Minister’s response on this—the existing partnerships of entities that have the approval of the Department of Internal Affairs. What is their status? They have a licence to operate now, and I have the licence of such a business here.

💬 Darren Hughes: Whereabouts?

I have it right here. It is a licence to operate gaming machines, and it falls under the category I am talking about. My Supplementary Order Paper adds to the definition of “corporate society” the words “a partnership, joint venture, or other unincorporated body whose members are all corporate entities within the meaning of paragraphs (a) to (d) and, where applicable, includes any of those members.”

Existing operators are now able to operate by way of a partnership or a company under one umbrella. I draw the Minister’s attention to that, because if the amendment in respect of “one society” goes through, existing operators that form under that umbrella will have to form two separate corporate societies. That is the first thing. Both will be regulated by statute, and that means extra work, the costs of restructuring, additional administrative costs, and greater potential for trustee liability, which was not thought through earlier on. There will also be increased potential for income tax on non-charitable distributions from those organisations. At the end of the day, that simply means that less money will go back to communities. Those organisations were set up specifically to give proceeds back to the community—that is their real reason for existence, and why they are there.

However, the Minister’s Supplementary Order Paper is saying no, they cannot be grouped together and must operate as two separate entities. I would like to clarify that the department has sent out a letter to organisations stating they cannot operate in that way, yet the business I am referring to has a letter—and I have a copy here, dated 9 February 2000—that states: “Thank you for the information supplied. If you are able to meet the following criteria”—and there are five—“then we are happy, because you meet the requirements under existing statutes—the Charitable Trusts Act and the Companies Act—and you are able to operate.” With that in mind, I am prepared to table the licence to operate I have here.

I rise to speak to clause 4 in particular, and some amendments proposed in the definition section. The background to my Supplementary Order Paper is that it seeks to bring the Rotorua casino development back into contention, having been unfairly ruled out by the imposition of the 1997 moratorium. In relation to the objective of the developers, clause 4 seeks to insert two additions relating first to public notice, and then to the Rotorua application. As I said, the background to this is the ruling out of contention—unfairly in the view of the developers, in my view, and in National’s view as well—an application for a casino licence that was very far advanced at the time. It was one of two that were well advanced, and we were caught when the moratorium was imposed.

This issue has been brought forward now for the same two reasons, and that is the economic development of Rotorua as a tourist destination—the developers being some of the city’s big landholders in that area as well—and the issue of Parliament using its power wrongly to bar legitimate developments without any just cause in 1997. In a sense Parliament was acting unconstitutionally by barring certain developments when companies and organisations had ordered their business on the basis of certain legislation, only to find that at a point in time the axe came down and they were barred. Seen in those two lights, the way that the legislation was brought in in 1997 was unconstitutional, and it also bars economic development and growth in what is one of New Zealand’s premier tourist destinations.

The other current issue is that no other casinos are intended to proceed under this legislation. We have actually allowed a monopoly in New Zealand, and that is to be deplored. National does not support that in any event.

As I say, subject to later amendments to the bill, with the insertion in the appropriate alphabetical order of a definition of “public notice”, clause 4 will take into account—if Supplementary Order Paper 109 is supported—the circulation of the intentions of Pukeroa-Oruawhata Holdings, the promoter seeking a casino venue licence. It will also include the definition of “Rotorua application”.

Since the legislation that imposed the moratorium was passed, the developers have done a survey of Rotorua residents. It was done in April this year, and showed that a majority of Rotorua residents would like a say on whether this development should go ahead. That is a point of difference; in other words, this does not say per se that the casino should be allowed. It takes into account the fact that the local community ought to have the say in the end as to what happens in its area—particularly in the case of casinos, because, as we know, it is a hotly contested issue. In that sense, if the majority of the community is in favour, that gives it a better—

I want to speak to clause 4, which refers to the definitions. We heard the Government member—I think it was Dianne Yates—mention the ability of local territorial authorities to control gambling activities in their areas. I point out to the member that those authorities have control only up until they issue a licence. Once the licence is issued, they no longer have control over what happens. If they suddenly discover that gambling is out of control in their areas, they cannot do anything about it.

I also want to bring up the issue of “corporate societies” and this “one society”. It seems to me that the bill is forcing many organisations to separate and call themselves individual societies—an individual from one can step aside and create another one. I guess that defeats the whole purpose of the bill, and I think it is an issue that the Government has overlooked.

With regard to the description of “casino”, this bill is trying to remove the small casino operations—the ones that are basically pokie bars or pokie parlours—by removing that name from them, but they will simply come up with another name and continue in operation, perhaps under the name of “pokie parlour” or “pokie gamblers”. They will come up with an alternative, so the bill will not stop a great deal there.

Another issue I would like to look at is the description of housie in Supplementary Order Paper 132. It touches only briefly on the process of housie, and I suggest that the officials take a closer look at that provision, because the definitions do not set out many of the rules and ways of restricting that particular form of gambling. In reality, there are a tremendous number of rorts and means of bypassing the rules in housie, and I suggest that the bill will not cover the rorts and schemes that attempt to get around the so-called limits on the housie system.

Finally, I refer to clause 7A, “Secretary may seek information to assess influence”. Is that influence with regard to management and employment, or does it include the influence of patrons within a casino and gambling operation? Although patrons are not supposed to have any influence on the running of things, there are schemes that have an enormous amount of influence within a casino or a gaming house. It is an area that I think needs to be re-examined and looked at more closely.

I am pleased to speak on Part 1. I refer to the definition of responsible gambling, which “means lawful participation in gambling that is—(a) lawful, fair, and honest; and (b) conducted—(i) in a safe and secure environment; and (ii) without pressure or devices designed to encourage gambling at levels that may cause harm; and (iii) by informed participants who understand the nature of the activity and do not participate in ways that may cause harm”. Yet here we have State-sponsored gambling on the way, as stated in a recent press release by my learned colleague Judith Collins. She is absolutely right. We now have State-sponsored gambling on the way, yet the bill has a definition of “responsible gambling”. I put it to the Committee that gambling is meant to be done by informed participants who understand the nature of the activity. We are supposed to set regulatory environments and to be responsible about how we govern those sorts of environments. However, as a State we are now getting into State-sponsored gambling, and that is absolutely deplorable.

Further to that, United Future has been a significant part of that. The New Zealand Council of Christian Social Services has had to express its extreme disappointment to the United Future party because the latest move in Supplementary Order Paper 132 in the name of the Hon George Hawkins makes a complete mockery of the definition of responsible gambling provided by the bill. United Future has done a deal that has resulted in that 65-page Supplementary Order Paper. The New Zealand Council of Christian Social Services is absolutely appalled at that, and it has been prompted to write a letter to Mr Dunne, expressing its huge disappointment. It has also issued a press release stating: “United Future gambles on its future survival”. I believe that United Future has lost that gamble, because it is not being responsible in the way that it is dealing with gambling issues. This bill talks about responsible gambling, and this Government—and United Future, in working with the Government—has completely failed in that regard. The Government has failed because we are now looking at State-sponsored gambling, and that is absolutely reprehensible.

I ask the Minister in the chair, the Hon George Hawkins, whether he would care to take a call and explain to the Committee and to the people of New Zealand how the Government will be accountable for its part in gambling, now that it is to get into gambling in a big way. Government members are to get into interactive gambling. I tell you, they will be rubbing their hands as they—

The CHAIRPERSON (H V Ross Robertson): The member will not tell me. She cannot use the word “you”.

I beg your pardon. Will the Minister be responsible for what arises from State-sponsored gambling? Will he be fully accountable for anything that may happen to go wrong, or are he and the Government excluded from any liability arising from activities pertaining to gambling, or for any actions that may be considered illegal or unconscionable in the pursuit of funds through State-sponsored gambling initiatives? I hope the Minister cares enough to take a call, to tell us whether he is responsible for that. Or is the Department of Internal Affairs responsible, or the Inland Revenue Department—after all, this issue is all about regulation and taxes.

In thinking about that, I wonder about local authorities. The definition of “territorial authority” in the interpretation clause of the bill mentions the inclusion of the Chatham Islands Council, and I note that Supplementary Order Paper 132 deletes subclause (b) of clause 4 and substitutes a new one. If the Chatham Islands Council is a territorial authority, then it is a mystery as to why that council was mentioned in the bill.

I move, That the question be now put.

I want to pick up on the point I made earlier and on my question to the Minister. I ask him again to respond on that issue about operating a business, because it is a serious matter. Those businesses are major contributors to communities throughout New Zealand, by means of gaming funds. They give back a third of their operating profits to the community, and we know the requirements. It is high time that people realised those businesses are run professionally. They have transparency, are accountable for their actions, have audits, and, at the end of the day, have contributed to the success of communities throughout New Zealand.

I am actually referring to one of those businesses, but the issue I raise relates to the definition of “corporate society”. In Supplementary Order Paper 132 in the name of the Hon George Hawkins, the Minister states there will be just one society. First, I go back to the letter that the Department of Internal Affairs wrote about corporate societies—I guess it went out to a number of those operators. It is really interesting that the letter is dated 12 June 2003, yet we have before us a Supplementary Order Paper that was launched last Friday. So we have had a time lag from June through to September. Therefore, this change has been mooted for a long time, but no one has had the opportunity to provide any input.

The letter of 12 June 2003 talks about partnerships, in the second paragraph in particular, and states: “The difficulty with partnerships of associations of individuals”—this is the difference, Minister, as opposed to groups of people—“is that it is often difficult to ascertain who is responsible for a particular action or omission. It is open to each of the partner bodies to argue that they are not individually responsible for an offence or other breach. Corporate status also provides for continuity of legal obligations undertaken by a corporate body.” We need to understand how partnerships work. Partnership law makes it very clear that each partner is responsible for the actions and omissions of the other partner. That is what partnerships are all about. Many businesses get into trouble, in the real world, because partners do not appreciate what their responsibilities and duties are.

I have here an example of an organisation that has been set up, and the criteria are laid down in a letter from the Department of Internal Affairs. We have here the licence. I ask this question of the Minister: what will happen, if this bill goes through in its present form? Or is the Minister intending to accept Supplementary Order Paper 140 in my name, which allows—the Minister is shaking his head. I would like you to explain to the other organisations around the country—those that find themselves in a similar position to the one I refer to—whether you will revoke their licences as soon as this bill is passed, just because they have formed—

The CHAIRPERSON (H V Ross Robertson): The member is referring to the Chair when he uses the word “you”.

Will the Minister be responsible for the fact that this legislation will revoke the licences of a number of operators throughout the country—operators that are currently operating within the law, under two statutes that I mentioned before: the Charitable Trusts Act and the Companies Act of 1993? The Minister knows whom I am referring to, because he just mentioned the name. But other organisations fall into the same category. There has been no movement from the Minister to suggest that he will take a call and explain that. Therefore, I take it that we will not be able to make any progress on this matter. In that case, the issue falls back fairly and squarely into the Government’s domain.

The United Future party is allowing this bill to go through, because it is supporting this part of the Minister’s Supplementary Order Paper. It could support Supplementary Order Paper 140 in my name, which would tidy up this problem. I am not asking for anything unreasonable—I am not asking for any deal. I just say that my Supplementary Order Paper clarifies the position and tidies it up. I ask the United Future members who are sitting here this afternoon to look very closely at what the Minister’s Supplementary Order Paper means, as opposed to what I am suggesting. I am not trying to beat the system. I ask for the support of the United Future members on this issue.

I move, That the question be now put.