Editorial: Unfairness of pokie funds must change

Te Ururoa Flavell's bill sought to rectify matters by dictating that 80 per cent of the proceeds of pokies had to be returned to the community where the gambling took place. Photo / APN

Proceeds ought to benefit most affected communities.

The Auckland Council was an early supporter of Te Ururoa Flavell's Gambling Harm Reduction Bill. It saw the legislation as a toolkit that local authorities could use to reduce the harm caused by the pokie industry. An important part of this was ensuring that, as far as possible, the proceeds of pokies were returned to the community in which they were raised. Understandably, therefore, the council was unimpressed when the Government diluted this aspect of Mr Flavell's bill in legislation that has still to be passed. Its response, released last week, confirms its concerns are far from unfounded.

The council has provided facts and figures to back what has always been surmised; that money tipped into pokie machines in the poorest parts of Auckland, where they are most popular, does not come back to those communities in gaming grants. The wealthiest areas gamble far less but take a disproportionate amount of money out of other areas. The value of the council's research lies in its disclosure of the extent of the disparity.

Residents in the Orakei local board area, Auckland's least deprived, spend $49 each on pokies. But Orakei gets a 152 per cent return terms of grant money available in its area, with the money returned coming from other areas. In contrast, people in the Otara-Papatoetoe area, Auckland's most deprived, put $274 per person into gaming machines. Their return in grant money available for distribution was 51 per cent.

This pattern is repeated to a greater or lesser degree throughout Auckland. The Albert-Eden area enjoys a bumper 176 per cent return, while sports and community groups and other worthy projects in Mangere-Otahuhu pick up just 22 per cent. Mr Flavell, quite reasonably, sees this as a social injustice. His bill sought to rectify matters by dictating that 80 per cent of the proceeds of pokies had to be returned to the community where the gambling took place. The balance would provide flexibility to distribute money to national organisations.

The Government was not convinced. Its bill ringfences 80 per cent of pokie grant distribution inside large regional areas. That guarantees Auckland a better deal overall. At present, it misses out to the rest of New Zealand. But as George Wood, the chairman of the council's strategy and policy committee, noted, it did not suit the Super City's "very diverse communities". The council wanted, he said, an improved deal and to get more for its communities.

The Government's approach appears designed in large part to placate the concerns of sports bodies and other beneficiaries who depend on the grants for much of their revenue. Without pokie grants, said the New Zealand Rugby Union, many clubs would fold and others would have to charge players five times as much to join. Sports bodies, of course, also said they would not survive the end of tobacco sponsorship. Either way, there is nothing particularly admirable about being associated with a system in which poorer communities suffer disproportionately the impact of an insidious and addictive form of gambling.

There is little prospect that the council's research will change the Government's mind. But, as a matter of principle, the proceeds from pokies should, in the main, help those areas most affected by them. The issue will go away only when the proportion of grants returned to the communities that gamble most becomes higher than it has been. The Government's legislation is an improvement, but its distribution formula is unlikely to achieve this to the required degree. At some stage, the substance of the council's facts and figures will have to be confronted.