Pub pokie operators may have to give more back to community

NZ regulator may force pub pokie machine operators to give more back to communities

By Tina Morrison

Sept. 24 (BusinessDesk) – The New Zealand regulator may force pub pokie machine operators to give more back to their local communities and provide more detail on grant winners and losers.

The Department of Internal Affairs, which oversees gambling regulations, has released a consultation paper on proposed changes for rules governing slot machines in pubs. Some $260 million of pokie money was returned via grants in the year ended June 30, 2013.

The department suggests increasing the rate of return to the community from pub pokie machines. Currently a minimum of 37.12 percent of gross proceeds must be returned to the community, although the average return is 42 percent. The department suggests increasing the minimum return to between 40 percent and 43 percent over time, in line with a policy of maximising returns to the community.

Internal Affairs said some operators don’t publish clear and transparent information about grants they approve or decline, which limits the ability of communities to scrutinise decisions.

It proposes requiring operators to provide more detailed information on grants, including where the applicant is based, the amount sought and its intended purpose to allow better scrutiny and prompt those awarding grants to be more responsive to the demands of their local communities.

“The public want a fairer and more transparent system and these changes will address that,” Internal Affairs Minister Chris Tremain said in a statement. “The proposals will deliver more funding for the community, allow for fairer distribution and cut red tape.”

Although there are currently no restrictions on where in New Zealand pokie operators can make grants, the department would like to change this to ensure local communities see more of the benefit from money that is spent in their community. Internal Affairs suggest requiring that 60 percent to 80 percent of funds be distributed in the region where it was gathered.

“There is a perception that money returned to particular areas is disproportionately low compared to the amount that was raised in that area through the gaming machines, meaning that the potential harm from gambling in particular communities is not being mitigated through commensurate returns to that community.”

Internal Affairs is also considering changing the way it allows pokie venues to charge for the cost of running machines to ensure more funds from pokies are used to benefit the community through grants instead of being paid to venues. The existing model is also costly to enforce and allows operators to use higher-performing venues to subsidise non-viable venues, the department said.

Options for change include a set fee for each machine at a venue or a commission rate per venue.

Submissions on the proposals are due Oct. 25.

(BusinessDesk)

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