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Further reduction in gambling facilities

1 February 2006

Further reduction in gambling facilities

The latest quarterly gambling licensing statistics for pubs and clubs show a continuing decline in the number of operators, venues and gaming machines, Internal Affairs Department Deputy Secretary, Andrew Secker, said today.

The three categories showed a further decline on the September quarter and, in the year to December 31, 2005, there were 10 per cent fewer operators, almost six per cent fewer venues and a four per cent drop in the number of gaming machines.

“These figures indicate that the Gambling Act 2003 is achieving one of its purposes – controlling the growth of gambling,” Mr Secker said. “The trends started, or accelerated, after the Act was passed in September 2003.”


Licensed gambling operations in pubs and clubs
Date Gambling operators Venues Gaming machines
31 December 2005 526 1747 21,343
30 September 2005
535
1,770
21,684

30 June 2005 553 1,801 21,846
31 December 2004 584 1,850 22,231
31 December 2003 672 2,031 22,734
30 June 20031 699 2,122 25,221
31 December 2002 729 2,137 24,330
31 December 2001 785 2,129 21,012
31 December 2000 860 2,065 17,679
1.Machine numbers peaked in the quarter before the Gambling Act was passed.


Machine numbers peaked in the June 2003 quarter before the Gambling Act was passed. Since then gambling operators have declined 25 per cent from 699 to 526 at December 05, venues are down by 18 per cent from 2122 to 1747 and there were 15 per cent fewer machines, down from 25,221 to 21,343.

“The drop in the number of operators was most significant in the non-club sector. The number of these pub-based operators declined by a third, from 120 at June 2003 to 80 at December 2005,” Mr Secker said.

“Despite this significant decline, information they have provided to the Department indicates that they gave out record amounts of money to community purposes in both 2003-04 and 2004-05, around $300 million in each year.

“We think there is room for more consolidation in the pub-based sector. Fewer operators should mean that overall costs go down, because there are fewer fees and salaries to pay, fewer offices, cars, computers, phones and faxes to pay for, and so on. When the number of operators drops, the remaining operators benefit from economies of scale. The average number of venues for each pub-based operator grew from under 13 to more than 16 between June 2003 and December 2005. Reducing costs in this way could maintain a good return to the community even if the amount players spend on the machines is reduced.”

The Act introduced a much stricter licensing regime and reduced limits on the numbers of machines allowed in venues. In general, venues licensed at 17 October 2001 can have up to 18 machines, while others can have up to nine. The Act also gave communities a say, through their local authorities, which can make policies preventing or limiting new venues and controlling the expansion of existing venues.

Further information, including numbers of venues and machines by territorial authority and the changes in these numbers, is available from the Department’s website: www.dia.govt.nz

Gambling spending drops

The licensing statistics follow recently-released gambling expenditure figures for 2004-05, which showed that total spending on the main forms of gambling – racing and sports betting, Lotteries Commission products, non-casino gaming machines and casinos - fell marginally from the previous year.

“Spending in 2003-04 was at a record high of $2.039 billion,” Andrew Secker said, “and in 2004-05 this dropped to $2.027 billion.

“Non-casino gaming machine spending fell by 0.8 per cent, from $1.035 billion in 2003-04 to $1.027 billion in 2004-05. Our estimates to date suggest that 2005-06 will be the third-highest year on record, about 8 per cent below the record 2003-04 year. However, the degree to which this is reflected in reduced payouts for community purposes, if at all, will depend on how successfully gaming machine operators minimise their costs.”

ENDS

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