Gambling Amendment Bill (No 3)

Tēnā koe, Mr Chair. Speaking to the title, I think this bill could have easily been called the “Gambling (Venue Payments and Other Matters) Amendment Bill”. We have consistently highlighted the issue of commission payments to venues, and submitters who made submissions argued that these payments would incentivise gambling. I want to acknowledge the Hon Peter Dunne for his contribution in the earlier parts of this debate when he gave us some assurance around the kind of model that he was looking to come under the regulation that this bill empowers. I did take some comfort from what he said—that he would not be agreeing to a model that incentivised gambling—and I certainly look forward to the new regulations when they come out. That is why I say that this bill could have been called the “Gambling (Venue Payments and Other Matters) Amendment Bill”.

I would also like to refer to the other matters within this bill, and they are wide ranging. One of the parts of it is around the grant-making decisions. That is one of the other matters that I would refer to in the title. I reflect on the contribution that was made by my colleague Jenny Salesa, who highlighted the number of class 4 pokie machines in her electorate, the amount of money that was spent within her electorate, and the amount of money subsequently distributed outside her electorate.

I guess one could also name the bill the “Gambling (Redistribution of Grants and Other Matters) Bill”. Just to highlight this, I understand that there is not a single pokie machine in Remuera, but distributions from the funds collected through the pokie machines in South Auckland do end up in suburbs in Auckland that do not have pokie machines. I think that the amendments this bill makes to the Act address that issue. I have got to say that these are funds that come from people and communities that can least afford to have that money go out of their communities. The issues within here, which could be described within a new title, address that, and I am pleased that we see that.

Another matter is about strengthening provisions around conflicts of interest. There were some changes that were agreed to in the Government Administration Committee, and I would like to, in this final part of the Committee stage, acknowledge the way that the select committee handled this particular bill. So those provisions that have been strengthened around addressing the issues of conflicts of interest are, in my opinion, very strong.

On the deficit side of this bill, we could have a title that included the lack of measures to address harm caused by gambling. That was a feature of the submissions on this bill, and it could easily have been included.

I have just done everyone a great service back home—that was definitely a waffle. It is great to be standing up here and speaking to clauses 1 to 3 in the final stages of this debate in the Chamber this evening.

To be honest, New Zealand First is a party that stands very strongly on its principles with regards to both this piece of legislation and all pieces of legislation that are being debated in the House. Although we were very, very close to supporting this, it came down to what we considered to be something that was fair and reasonable on our Supplementary Order Papers surrounding an amendment to do with the commission-based payments within this bill.

I think this bill—because it is about the naming of this bill in this stage—would probably be more aptly named the “Gambling (Financial Responsibility and Transparency) Amendment Bill”. That, of course, is similar to the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill, which, of course, is a bit of an oxymoron because there is not a lot of transparency in that ACC bill. However, with good grace and being in the spirit of a positive Thursday afternoon, I think there is a lot of transparency in this bill. It certainly tidies up a lot of the loose ends, because prior to it going to the select committee, New Zealand First had a number of issues with this Gambling Amendment Bill (No 3).

I have to say that the name is a little bit boring because we have just put to bed the Gambling Amendment Bill (No 2). In the proceedings, as the debate was going on in the Chamber earlier on, I have to say that there were more comments made by the Greens and Labour about harm minimisation, which, of course, does not feature in the Gambling Amendment Bill (No 3). Therefore, I think that the name of this bill is somewhat confusing and somewhat ambiguous and that it could be better named. Even calling it the “Doing More For the Community Amendment Bill for Gambling” may actually be a more appropriate name.

This bill does three things that I think should be commended, and you are going to be saying: “Well, if you’re going to commend parts of the bill, why don’t you support it?”, but unlike our Opposition parties on this side of the benches, if something is not right, if it is not fit for purpose, and if it does not do what it is intended to do, then, I am sorry, we cannot bend ourselves over and take one for the team and go along with this nonsense of the Government. We have to oppose it.

The CHAIRPERSON (Hon Trevor Mallard): Order!

Mr Chair—thank you. I have to say that increasing transparency is absolutely fundamental in everything that this Government does, or any Government that has been operating in the past and moving on to Governments of the future. I think that that is one of the key things there.

Reducing the conflicts of interest is another area that has got some operators—those rogue operators, and they are by far a minority group—into some sort of trouble with regard to their conflicts of interest around granting applications to some of those charitable organisations, the venue payment operators, and, of course, those people in management positions who are managing those sites, whether it be the machine operators themselves, and so forth.

Again, I go back to commend the Government Administration Committee. I think the Hon Ruth Dyson has done a swell job with her team, along with Adrian Rurawhe, and we have got Mark Mitchell back in the House—congratulations; good effort over there with the Parliamentary Rugby World Cup—Sarah Dowie, and Brett Hudson. I have to say that they have done—

The CHAIRPERSON (Hon Trevor Mallard): Rurawhe—it is Rurawhe.

Rurawhe—I am sorry. I do apologise. I am not the cunning linguist that I thought I was—[Interruption] Yes, it is a bit of a—

Order! The member will now resume his seat. He has had two pretty gross offences.

I rise to take a call—a serious call—on the first three clauses of the Gambling Amendment Bill (No 3). These three clauses deal with the title, the commencement, and the principal Act. In preparing what I was going to say in this portion of the Committee of the whole House, I went and looked at the principal Act again, and I think it is worthwhile to kind of summarise what it says in the Act are the purposes of that Act, the Gambling Act 2003. It has got about nine different purposes, but I will refer to only about four or five of them. They are, as section 3 states, to: “(a) control the growth of gambling; and (b) prevent and minimise harm from gambling, including problem gambling; and… (d) facilitate responsible gambling; and…(g) ensure that money from gambling benefits the community;”.

If we remember, the whole point of class 4 gambling is to provide funds for the community, funds for charitable purposes, and a few other things around racing that New Zealand First got into the legislation previously. However, those are the purposes of the original Act, and this bill, I believe, actually cuts right across those purposes, because although this bill is called an amendment bill, it actually removes a significant portion of the purposes of the original Act, and they do not measure up. The removal of the prohibition on paying venue operators on a commission basis from the 2003 Act essentially cuts right across the purposes in the original Act around preventing and minimising harm—including problem gambling—and facilitating responsible gambling, and those are two absolutely crucial parts of the 2003 Act.

I find it unusual that this provision is even in this amendment bill, because we do not really know where it came from. We heard during the submission process from venue operators and from the pokie trusts themselves that they were quite keen to have this, and we have heard an assurance in the House from the Minister of Internal Affairs to say that there will be a provision in the regulations around this bill that will restrict the commission-based payment system from being exploited and creating problem gambling. But we do not know what those regulations say, and this is an assurance that we have had that actually cuts right across the purpose of the original Act, which is to prevent and minimise harm from gambling.

In the previous parts of the debate I was pretty disappointed that Supplementary Order Paper 120—my Supplementary Order Paper—around minimising gambling harm by introducing player tracking and pre-commit cards was voted down, because that would have been the ideal opportunity for this bill to measure up to the purposes of the original Act. However, that is not what we have got here. So I think that leads us to the point where we have to say that this bill has been misnamed. Actually, it should not be called the Gambling Amendment Bill (No 3). It really is the “Let’s Have Lots of Pokie Rorts Please Bill”, because it expands the opportunities for problem gambling. We know—because we have seen the evidence that was presented to us by the Department of Internal Affairs from its mystery shopper sting—that many of the venue operators in New Zealand who currently have class 4 licences to operate pokie machines on their premises do not comply with the host responsibility requirement that is also outlined in the purposes of the original Act.

So when you combine that with the provision in this bill that will allow for commission-based payments, you have to ask yourself what the consequences of that are going to be. Given that low rate of compliance with the host responsibility requirement from the new operators, you have to say that the consequences will be, I believe, an increase in problem gambling and more pokie operators rorting the system in order to line their pockets.

I guess the other thing that cuts across the purposes of the original Act—and the original Act is named in clause 3 of this bill—is the clause around extending the licences for those venue operators and for those pokie trusts. This worries me, because although the Minister has said that this is to be an incentive for good behaviour, frankly, we have not seen much good behaviour. I see no point in providing the ability in this bill to extend licences for good behaviour when it has not happened. What I would rather have seen, and what I am pretty sure the Department of Internal Affairs gambling compliance unit would rather have seen, as well, is that good behaviour operating first before we changed the law, because, again, if that is outlined in regulations we have no way of deciding now whether it is going to work or not.

So on the whole this bill offers an enormous relaxation of the gambling laws to the industry, and that enables the industry to practise bad behaviour. The incentivisation of problem gambling in order to increase the commission-based payments to the venue operator is one example. Basically, we know that they are not meeting their obligations now, in most cases.

We do not know where the commission-based payment system came from or who asked for it. We did not see that in any of the information that came through to us, and it cuts right across the purposes of the original Act. So we should rename this bill so that when it receives the Royal assent we could have the “Problem Gamblers Enablers’ Act”, or the “Venue Operators Make a Mint Act”. I could go on, Mr Chair, but I will not, because you are looking quite glazed. Thank you.

I really want to get to where I left off from last time and the points we have talked about so far from New Zealand First, including the things that we do actually support in this bill—and there are a number of things that we do support. However, there is one major, glaring issue that we feel this bill fails to address and is going to cause some issues in the future, although with that address I have to acknowledge also that through this Committee stage an amendment that was submitted by the Hon Peter Dunne has enabled commission-based payments to take place.

We have heard the umbrage that Labour and the Greens have taken with regard to commission-based payments. However, I feel like New Zealand First has quite comfortably outlined the positive nature of that in itself, in so far as how it currently works in the Act is that working out what site venue payment an operator receives is done through real, actual, and necessary costs. That is a very, very cumbersome, very, very clunky way of working it out, and it happens a few times throughout the year. The venue operator has to work out the entire size of their premises. They have to work out how large their gaming area is compared with the whole size of their premises. They have to work out what floor coverings they have got, what wall coverings they have got, and what light fittings they have. They have to work out what the turnover of the bar is and what relationship of wages are paid to the bar versus the—as you can already see, I can see people looking down and shaking their heads in disbelief that this is what goes on, on a daily basis, to work out a site venue payment.

What happens in other sectors of the gambling community—and now we talk about the TAB and Lotto—is it is all done on a gross turnover as a commission-based payment. The TAB, for example, I think gets around about 3 percent of the gross turnover, and the Lotteries Commission gets about 1.5 percent of the gross turnover—which is similar to what we have put through on Supplementary Order Paper 95 as an amendment. When we did our initial calculations—because we think commission-based payment is very simple; off the bat you can work out on a weekly and daily basis what your site payment is going to be—it was hardly about maximising your profits to get as much site rental as you can. There is legislation in place that stops any site operator and any organisation from doing that.

What our amendment simply does is, by looking at your gross turnover rather than your net turnover—which was one of the calculations that we ran through; we looked at 16 percent of net turnover, originally—it accounts for the variations and fluctuations in prize money that is paid out on a weekly, daily, and monthly basis. That variation creates a lot of uncertainty with those site payments that are being paid out. Some weeks you will get far more than in others, and some weeks you will get far less than in others. So what we have looked at is a fair and reasonable 1.5 percent of gross turnover for those site operators, so that they know where they stand on a weekly basis. We are talking, for an average nine-machine site rental, around about, I would say, $1,350 to $1,470 per week in site rentals—for nine machines on a site that is operating quite strongly—so we are not hardly talking about profiteering.

Our concern is that this bill has missed the opportunity to do that, and therefore we cannot support this bill moving forward. We certainly acknowledge the positive steps with regard to the direction that this bill has taken from when we had our first reading to where it is now.

I also would like to just bring to the attention of the public and the members in the Committee that the contradiction that we see through gambling throughout New Zealand is one that needs to be recognised. When we compare it with the likes of Skycity Casino—which is affected by none of these laws, and is nothing to do with what we are talking about here—on average it pays around about $3 million per annum out to its communities, with a turnover of around about $500 million. Compare that with the class 4 gambling machines around the country, which turn over around about $700 million and return around about $280 million to those communities—those sports clubs, community clubs, groups, organisations, and schools that really need that money to get through and survive. So another part of the bill, again, that we think is great is the simplification of the compliance and the cutting of the red tape to actually enable more money to be returned back to the communities and back to the people who need it the most.

We see some positive steps moving in the right direction, but, unfortunately, we cannot support this bill unless there are some major changes with regard to the commission-based payments at 1.5 percent of gross turnover. Thank you.