Editorial: Time to put the heat on pokie charities

The bill would strip power from the gaming trusts that dominate the pokie industry in pubs and clubs. Photo / Thinkstock

The scrutiny on poker machines and the damage they cause has never been more intense. Such has been the product of SkyCity's proposed convention centre deal and Maori Party MP Te Ururoa Flavell's Gambling Harm Reduction Bill, which passed its first reading in Parliament last month.

In such circumstances, it might be expected that pokie charities would be doing everything possible to keep their noses clean. Not a bit of it, apparently. According to the Problem Gambling Foundation, they are using money meant for community projects to oppose Mr Flavell's bill. Such activity succeeds only in further undermining their position and adding weight to the legislation.

It is easy to see why the gaming trusts strongly oppose the bill. Their very existence is threatened. It would strip power from the gaming trusts that dominate the pokie industry in pubs and clubs, placing the power to distribute the $300 million available to community groups in the hands of committees appointed by local councils. Further, 80 per cent of the poker machine proceeds would have to go back to the communities where the gambling took place.

The latter aspect has much to commend it. At the moment, poorer communities suffer the consequences of this insidious and addictive form of gambling disproportionately. It makes sense that, as far as possible, the proceeds from pokies help those most harmed by them, rather than community groups, charities, schools and sports clubs in areas where they barely have a presence. This may encourage the installation of more pokies in such suburbs. The relatively small number of users would, however, temper any such development. Equally, the 80 per cent threshold, rather than a dogmatic 100 per cent, provides flexibility in the distribution of money.

It should be far harder to support the transfer of that distribution power from gaming trusts to local committees. Such an upheaval makes sense only if the pokie charities are not properly and fairly maximising returns to the community while minimising the harm caused by pokies.

Unfortunately, they are erring in rather too many cases. Two years ago, the Internal Affairs Department suggested that 30 of the country's 50 gambling trusts had "issues of non-compliance" similar to those of the Trusts Charitable Foundation, which paid more than $500,000 to one of its trustees to sign up new pokie venues.

There has also been discontent over the vast sums going from poker machines to trotting clubs in a way that has raised questions of conflict of interest. In 2009, three trusts were banned from giving any more money to four trotting clubs after their grants to them soared from less than $500,000 a year to $5.4 million over two years.

Issues of transparency and non-compliance raised by these episodes have been compounded by the money apparently being used to oppose Mr Flavell's bill.

Rules governed by the Internal Affairs Department stipulate that pokie proceeds should be spent on reasonable and necessary purposes. It is difficult to see how this spending qualifies. Ethically, it is certainly unsustainable. Money meant to be returned to community groups or to fund harm minimisation measures is being used unconscionably.

It hardly helps that the Pub Charity Incorporated chief executive insists that the harm caused by pokies is overstated. An abundance of research suggests this is far from so.

The pokie charities' behaviour is self-destructive. It may be all the more reckless given that parties should, by convention, allow their MPs a conscience vote on gambling issues. They will have only themselves to blame if Mr Flavell's bill gains far more traction than initially seemed likely.