Eight billion dollar bet we make every year

By MATHEW DEARNALEY

New Zealanders shoved more money through slot machines and other forms of gambling last year than the Government spent on the entire public health service.

Word that gambling turnover has swollen to $8.4 billion from $890 million in 1984 provides a chilling and urgent impetus to the Government's overhaul of gaming legislation.

Admittedly, that is a gross figure, which includes a return to punters of just over $7 billion in prize money.

But even the preferred official figure of people's "expenditure" on gambling - or more bluntly, money lost on slot machines and other games of chance - rose by 11 per cent last year, to $1.3 billion.

On the other side of the ledger is about $300 million distributed from gambling profits to community organisations.

Even St John Ambulance owns slot machines to help to pay for more vehicles to cope with Auckland's traffic.

And the Government reaps $315 million or so in taxes and gaming duty.

Even so, comparisons with this year's health budget of $7.3 billion prompt serious questions about the nation's priorities, say compulsive gambling treatment organisations.

They are concerned at a lack of Government spending to educate people about the dangers of gambling, in similar vein to its public health campaigns about the evils of over-indulging in alcohol and in smoking tobacco.

The Problem Gambling Committee, which receives its money from industry levies, has a $4 million annual budget to cover treatment services, but no such provision is made for preventative measures.

Compulsive Gambling Society chief executive Ralph Gerdelan says this is despite an election pledge by Labour to treat gambling as a serious health issue, and action being taken by several Australian state Governments to roll back the industry to varying degrees.

He dismisses as lightweight a discussion paper issued by the Internal Affairs Department as part of the gambling review, saying it gives no indication that the Government will weigh up social and economic impacts of what he calls an out-of-control industry.

But department gaming and racing policy manager John Markland says the Government has access to a much larger body of research than has been undertaken in Australia, including a survey due out next week on gambling histories of prisoners.

He says the discussion paper throws open the question of how we see the role of gambling in our society, and his department wants to hear detailed submissions from the widest range of New Zealanders, including Mr Gerdelan.

How much is spent on what forms of gambling?

Non-casino poker machines are the most voracious consumers of gambling money, gobbling up $3.77 billion last year. Of that, $3.33 billion was regurgitated as prize money, but net spending of $442 million was up 25 per cent on the previous year. This reflects an increase in the number of licensed non-casino gaming machines, to 17,700 at 2100 sites compared with 14,300 when the Government took office in 1999.

Treatment agencies such as the Salvation Army's Oasis Centre in Auckland say the machines are cited as the preferred form of gambling by 60 per cent to 80 per cent of people seeking help.

The country's five casinos account for the next largest chunk of business, raking in $2.85 billion (net loss to gamblers, $337million) compared with $1.17 billion ($233 million) chanced on racing and sport.

Lotto and other Lotteries Commission "products" had the most participants, but their turnover was $587 million, with a net loss to players of $272 million.

Who gambles?

Internal Affairs Department surveys suggest between 85 per cent and 90 per cent of New Zealanders aged 15 or over gamble, a level which the discussion paper says has been stable in the past 15 years despite larger wagers.

A survey led in 1999 by Auckland University of Technology health dean Max Abbott found that 41 per cent of those aged 18 and over gambled at least weekly, although most confined themselves to Lotto.

Adults who took part in at least one form of gambling in the six months before being surveyed spent an average of $41 a month.

Men typically spent $53 a month and women spent $30.

People aged 45 to 54 were the biggest-spending age group, at $58, and Pacific people ($62) and Maori ($49) spent more than those of other ethnic groups.

People of European descent spent $40 and Asians $38.

Those with trade qualifications ($47) or no qualification ($46) spent markedly more than people with degrees or higher academic qualifications ($27).

Members of households with incomes above $70,000 typically spent an average of $67 a month, compared with $30 for households earning $20,000 or less.

The survey was of 6500 people from households approached by Statistics New Zealand. Mr Gerdelan believes the extent of gambling has been considerably under-reported as many with gambling problems are reluctant to bare all.

He says the Australian Productivity Commission found that 70 per cent of money gambled across the Tasman is by people earning less than $A30,000 ($36,600), "so it's the poor feeding the rich."

And he says more young people are gambling these days.

How many problem gamblers are there, and who are they?

The gaming survey led by Professor Abbott estimated that around 36,800 people, or 1.3 per cent of the adult population, were problem gamblers or probable pathological cases - down from 3.3 per cent in a smaller survey in 1991.

Mr Gerdelan says this defies logic, because of the proliferation of gambling since gaming machines were legalised in 1988, and a surge in people seeking treatment.

The discussion paper acknowledges that 2363 problem gamblers and family members received counselling services in 1999, more than double the 1100 in 1997.

But Mr Gerdelan says a more accurate measure is the number of people seeking help through the Gambling Problem Helpline.

He claims the Government is using the Abbott finding for propaganda purposes, saying it is underplaying the impact of the gambling explosion on the fabric of New Zealand society, while taking more and more revenue from that quarter.

The gambling helpline heard from 3700 first-time callers last year, up from 3400 in 1999, and received 14,600 calls in total.

Forty eight per cent of new callers were women, compared with 43 per cent in 1999.

Salvation Army Oasis Centre manager George Willdridge says Maori women who previously indulged only in housie sessions now account for a large number of reported addictions to non-casino poker machines.

Auckland University researchers Robert Brown, Sean Sullivan and Peter Adams have surveyed 100 new prison inmates and found 24 per cent with symptoms categorising them as probable pathological gamblers.

Why is the Government reviewing gambling legislation?

The two-year exercise, which the Government announced in June, follows reviews in 1990 and 1995.

A gambling reform bill aimed at streamlining licensing and identifying problem gamblers at play remains before Parliament, and the Government is inviting those who made earlier submissions to remind it so they can be re-used.

But the Government says the current review will be much more sweeping, and promises a thorough legislative overhaul to replace three main laws governing various gambling sectors.

The Internal Affairs Department briefing paper to its incoming minister after the 1999 election said desired outcomes from gaming policy were unclear, and there was no solid framework for "a significant and growing sector of the New Zealand economy."

Industry participants included the Government, business interests and community groups financed by gaming profits. Their mixed objectives created tension.

Parts of the industry were close to asphyxiation by regulation, said the briefing paper, and the emergence of cross-border internet gambling would limit the effectiveness of some regulatory options.

The lack of an industry framework led to perceptions of unfairness, such as racing groups feeling hard done-by at having to pay 20 per cent in gaming duty while casinos pay only 4 per cent. (On the other hand, casinos pay income tax while racing clubs are exempt.)

Neither did the level of regulation always correspond to the risks posed. For example, games of housie are far more tightly controlled than are gambling machines, yet the pokies suck up 20 times the money spent at housie sessions.

Does gambling have a role in society and what should it be?

The discussion paper points out that a unifying theme of the three main statutes governing casinos, games of chance such as Lotto and machine games, and racing and sport betting, is that gaming is usually prohibited unless it generates an offsetting "community benefit."

But it notes that more than 90 per cent of respondents to attitude surveys are "generally in favour" of using gaming as means of fund-raising for worthy causes.

Although casinos are owned by profit-making companies, they must demonstrate potential to promote tourism, employment and economic development.

Communities such as Hamilton and Queenstown, which have battled long and unsuccessfully to keep casinos out of their towns, complain they have insufficient leeway to protect themselves from the social disruption they fear from gambling palaces.

About $130 million for community and sports organisation comes from the lotteries commission and probably another $150 million from non-casino gaming machine profits, although accounting in these sectors is sometimes extremely loose.

Non-casino machine operators are entitled to keep one third of their takings for expenses, but must give at least 33 per cent of their profits for community purposes.

But the Internal Affairs Department is aware of concerns that money may be granted to groups promising to patronise hotels where gaming machines are located, and has asked the public for ideas on streamlining distribution.

The Compulsive Gambling Society's Ralph Gerdelan says the Government has a vested interest in making community groups dependent on gambling, to justify its own beneficial role in the industry.

But the discussion paper does at least ask whether, in view of the risks associated with gambling, it is appropriate for the Government to be heavily involved with the gaming industry through the Lotteries Commission.

The TAB's monopoly on race and sports betting is also expected to come under fire.

What is the remaining timetable for the review?

Submissions close on April 30 and the Government intends to introduce legislation this year or early in 2002.

Where should you send submissions on the Government gaming reform discussion paper?

Gaming Review Team, Policy Group, Department of Internal Affairs, PO Box 805, Wellington. Fax: 04-4957237

E-mail: gamingreview@dia.govt.nz

What is the Gambling Problem Helpline number for people worried they or a relative have a problem?

0800 654 655 or visit their website: http://www.gamblingproblem.co.nz