Fee increase for pokies could hit club funding

CASH SQUEEZE: Community groups may get less money from pokie profits if fees are increased. A-090813HOSMPRSA6

Wanganui community groups will be hit in the pocket under a proposal to increase pokie machine fees.

The Department of Internal Affairs is consulting with the gambling sector on proposals to increase monitoring and licensing fees on pub gambling machines - with an increase of close to 54 per cent on the cards.

As of December last year, 235 pokie machines were operating at 16 venues in the Wanganui district. The machines collected more than $2 million from October to December last year alone.

New Zealand Community Trust chief executive Mike Knell said the trust would lose half a million a year in funding for community groups and sports clubs if the proposal went ahead.

The trust operated at 158 venues nationwide, including Caroline's Boatshed, Castlecliff Hotel, Stellar Bar, Red Lion Inn, Shotz and Tandoori Spice Bar.

More than 90 per cent of the Wanganui funds go back into local community groups and sports clubs, Mr Knell said.

"It's outrageous to have a 53 per cent increase," he said. "There used to be 81 societies running machines and now there's 41, and there's a reduction in machines so there's far less monitoring to be done.

"Obviously we're concerned about any loss to the community."

Mr Knell said they were pleased Internal Affairs was consulting as there needed to be more transparency about what the costs were.

New Zealanders' gambling spend had not fallen significantly, but the department's revenue from operators had, as it was tied to the number of machines.

Internal Affairs Minister Peter Dunne said the higher fees would cover the costs of the gambling law enforcement by the department, which has been financially stretched by investigations into increased non-compliance by pokie operators.

"Through routine audits, venue inspections and inquiries, the department identifies breaches or non-compliance with the Gambling Act about 50 per cent of the time, with varying degrees of severity," Mr Dunne said.

"[The department] is now facing a deficit of $3.8 million this financial year."

Nationally, the number of pub and club gaming machines dropped from 20,120 in 2007 to 16,717 at the end of last year.

The proposed fee increase aimed to bring in enough money to cover regulation costs, as well as repay the deficit over time - meaning no taxpayer money would be spent.

The Community Gaming Association said the hike would impact community grants generated by gaming machines.

But the Problem Gambling Foundation said it would lead to increased compliance of a sector which, according to chief executive Graeme Ramsey, has been "a story of poor customer care".

Mr Ramsey said a "mystery shop" by Internal Affairs had found the vast majority of pokie operators were in breach of the Gambling Act.

"The department hasn't increased fees since about 2007, but it can't decrease its compliance efforts - not when the sector hasn't stuck to its legal responsibilities."