8 Oct

NZ’s Dunne Introduces Proposal to Increase Revenue from Non-Casino Gambling

pokiesThe gambling debate in New Zealand has two very high fences, each piled high with activists who believe they know how best to handle the issue of non-casino gambling. On one side, we have opposition to pokies who want to further decrease the number of poker machines in the region. On the other, we have those who are concerned that the decline of revenue from non-casino gambling poses a detriment to communities.

While Internal Affairs Minister Peter Dunne has spent his fair share of time campaigning for less pokies in pubs, clubs and hotels to help decrease the spread of problem gambling in New Zealand, he’s also worried that the communities where less gambling devices are now present are going to suffer for it.

Class 4 gaming pays for a substantial portion of all community programs throughout the country. 40% of all pokies revenue, and 37% of lottery revenue, is funneled back into the system by way of funding for these organizations.

Speaking at the Hospitality NZ conference yesterday in Nelson, Dunne said that in 2013/14, the $620 million NZ generated from non-casino gambling distributed $477.4 million into community causes. However, that number isn’t nearly as impressive as it looks. When matched up with the figures of a decade ago, we see that the revenue has been on a steady decline for the last 10 years.

New Zealand has experienced such a massive diminution in non-casino gambling revenue that the government is averaging a deficit of $3.8 million annually, with an aggregate deficit currently listed at $13 million. If fees and obligations are not increased—something that hasn’t happened since 2008—that shortage will continue to grow.

Dunne said that the NZ government is looking at several ways to revitalize pokies revenue, but the first step is to find out exactly what is causing the perpetual declination.

The Minister has requested that the Internal Affairs Department investigate and deliver a report that identifies root cause(s), as well as defining a future forecast for non-casino gambling revenue and the impact it will have on community funding.

As of now, New Zealand is looking at several options to increase the yield from poker machines and lotteries. First and foremost, the government has already set a plan in motion to increase the percentage of income gambling trusts are obligated to distribute among community programs, which will rise from 40% to 42% by 2018. Dunne said they are also looking closely at an increase in operator fees.

A consultation document regarding the proposed changes to non-casino gambling was released by the Finance Minister during the conference.

“These proposals recognise the pressures the class 4 sector is under to maintain community funding, while enabling the Department to recover its costs and fulfil its statutory obligations,” explained Dunne. “Further relief is contained in the Gambling Amendment Bill (No 3) currently awaiting its third reading which includes measures to simplify compliance and reduce costs for societies and venue owners in some areas.”

Some of the proposed changes include the following increases (and surprisingly, decreases) in fees:

Non-club societies would see new Class 4 gaming license fees increase nearly 500% from $3,616 to $15,795, with new venue licensing fees jumping from $904 to $2,567. Daily monitoring fees—which are charged per machine, per day—would rise from $1.20 to $1.90. Small club societies, however, would see a notable reduction in the cost of annual compliance fees, falling from $378 to $295.50.