Pokie payment change 'giant leap backwards'

The move will gradually lift payouts to the community. Photo / Christine Cornege

Reintroduction of commissions coup for gambling industry, say critics.

A new commission structure for pubs with pokie machines is being condemned by anti-gambling lobbyists as "a giant leap backwards".

The move to a commission system, announced by Internal Affairs Minister Peter Dunne last week, overturns a clause of the 2003 Gambling Act that prohibited commission payments for pokie operators because they would give publicans an incentive to promote gambling.

Instead, publicans and other venue operators have only been allowed to claim "actual, reasonable and necessary costs" up to a maximum of 16 per cent of their pokie proceeds.

Former Problem Gambling Foundation chief executive John Stansfield, who lobbied for the current law back in 2003, said some venues before then were receiving commissions that were "wildly outside costs".

"I found a pub in South Auckland that was getting $500,000 a year from pokies," he said.

"We battled against commissions and for the Department of Internal Affairs' position that you just paid a rental. So this is a giant leap backwards. It's a huge bonus for the gambling industry."

The new Gambling Amendment Bill (No 3) also makes other changes agreed last year in a deal with Maori Party co-leader Te Ururoa Flavell, who had put up a bill that would have transferred pokie funding decisions from gambling societies to local councils and required 80 per cent of the proceeds to be distributed in the local board or council area where the money was gambled.

Mr Dunne said 80 per cent of proceeds would have to be distributed in the regional council area where the money was gambled, a compromise Mr Flavell said yesterday that he was happy with.

The new policy will lift payouts to the community from at least 37.12 per cent of pokie proceeds at present to 40 per cent in the first year after regulations take effect in September, 41 per cent in the third year and 42 per cent in the fifth year. The current average actual payout is 40.35 per cent.

The bill repeals the prohibition on commissions but does not specify a commission structure. Mr Dunne said details would be negotiated with the industry.

A consultation document last September proposed paying venues on a sliding scale ranging from 40 per cent of the first $1750 of pokie proceeds a week down to 8 per cent on proceeds above $15,550 a week and zero above $30,000 a week.

Community Gaming Association director Brian Corbett said the industry welcomed a commission-based system because the current system of proving actual costs was "clumsy, unwieldy and very difficult to process".

He said the argument that it would increase gambling was "specious". "You can't make people spend money," he said.

Mr Dunne said it was "unlikely that a simplified venue payment system will see any increase in the level of reimbursement to venues".