Class 4 Gambling in the Thames-Coromandel District: Social ... · Thames-Coromandel District: Social Impact Assessment DRAFT 3.0 Prepared for Thames-Coromandel District Council by

Class 4 Gambling in the Thames-Coromandel District: Social Impact Assessment DRAFT 3.0

Prepared for Thames-Coromandel District Council

by APR Consultants

15 March 2014

Social Impacts of Class 4 Gambling in the Thames-Coromandel District 2014

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Legislative compliance This report contributes toward compliance by Thames-Coromandel District Council with sections 102 and 103 of the Gambling Act 2003 (adoption and review of class 4 gambling venue policy), sections 65D and 65E of the Racing Act 2003 (adoption and review of Racing Board venue policy) and Part 6 of the Local Government Act 2002 (planning, decision-making and accountability).

Acknowledgements This report focuses on issues relating to class 4 gambling venues in the Thames-Coromandel District as at January 2014. Its structure is adapted from a report originally prepared for Rotorua District Council in 2003, subsequently updated for South Waikato District Council in 2006, Auckland City Council in 2007 and Rodney District Council in 2007 and 2010. It draws on elements of a 2003 report on Social Impacts of Gambling in Manukau City prepared by Jenny Rankine and David Haigh; the 2004 Gambling Impact Assessment for Seven Auckland Territorial Authorities prepared by the University of Auckland’s Centre for Gambling Studies (Adams et al, 2004); and a 2008 Assessment of the Social Impacts of Gambling in New Zealand by the Centre for Social and Health Outcomes Research and Evaluation (SHORE). It incorporates more recent statistics and research results from the Ministry of Health and other sources including 2013 Census population data from Statistics New Zealand and pokie machine expenditure statistics at the local authority level collected through electronic monitoring by the Department of Internal Affairs (DIA). It also incorporates feedback on earlier draft reports from Jules Garland (Problem Gambling Foundation of New Zealand), Francis Wevers (Charity Gaming Association/Community Gaming Association) and Martin Cheer (Lion Foundation). Local research information and prior community consultation summaries by Thames-Coromandel District Council are also cited. Finally, this paper benefited from a gambling resource for local government published by the Ministry of Health in 2013. The resource has been used to calculate a community gambling risk profile for the Thames-Coromandel for inclusion in this report.

Author’s comments The author has sought to make this report as factual and balanced as possible. Please provide feedback on any factual errors or perceived biases via [email protected]. References to gambling machines, gaming machines and pokie machines are used interchangeably throughout this report, as are references to gambling proceeds and expenditure.

Disclaimer Care has been taken in the production of this report to ensure its contents are as accurate as possible, however neither APR Consultants Ltd nor Thames-Coromandel District Council takes responsibility for any incorrect information or decisions by any persons based on the information in this report.

Further information Katina Conomos Strategic Planning Team Leader Thames-Coromandel District Council (07) 868 0200 [email protected]

mailto:[email protected]

mailto:[email protected]


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CONTENTS

KEY POINTS .............................................................................................................................................. IV

OVERVIEW ................................................................................................................................................ VI

1.0 INTRODUCTION .............................................................................................................................. 1

1.1 CLASS 4 GAMBLING VENUES ............................................................................................................. 1

1.2 RACING BOARD VENUES .................................................................................................................. 2

1.3 REVIEW OF GAMBLING VENUE POLICY .............................................................................................. 2

1.4 POLICY OPTIONS ............................................................................................................................. 2

2.0 GAMBLING IN NEW ZEALAND ...................................................................................................... 3

2.1 GAMBLING REGULATION ................................................................................................................... 4

2.2 GAMBLING MACHINE NUMBERS ......................................................................................................... 4

2.3 GAMBLING EXPENDITURE ................................................................................................................. 5

3.0 GAMBLING MACHINES IN THE THAMES-COROMANDEL DISTRICT........................................ 7

3.1 GAMBLING VENUES AND MACHINES ................................................................................................... 7

3.2 GAMBLING MACHINE EXPENDITURE ................................................................................................... 8

4.0 BENEFITS AND COSTS OF CLASS 4 GAMBLING IN THAMES-COROMANDEL DISTRICT..... 9

4.1 BENEFITS 1: FUNDRAISING ............................................................................................................... 9

4.2 BENEFITS 2: INCOME AND EMPLOYMENT ......................................................................................... 10

4.3 BENEFITS 3: ENTERTAINMENT VALUE FOR LOCALS ........................................................................... 11

4.4 BENEFITS 4: TOURISM BENEFITS .................................................................................................... 11

4.5 COSTS 1: DIVERSION OF INCOME AND EMPLOYMENT ........................................................................ 11

4.6 COSTS 2: PRIVATE AND SOCIAL COSTS OF PROBLEM GAMBLING ....................................................... 13

4.7 COSTS 3: REGRESSIVE TAX EFFECT ............................................................................................... 17

5.0 OTHER CONSIDERATIONS.......................................................................................................... 18

5.1 COMMUNITY GAMBLING RISK PROFILE ............................................................................................. 18

5.2 LOCATION AND ACCESS .................................................................................................................. 22

5.3 GAMBLING MACHINE DENSITY ......................................................................................................... 22

5.4 GAMBLING IN HIGH DEPRIVATION COMMUNITIES ............................................................................... 23

5.5 RISKS AND OPPORTUNITIES ASSOCIATED WITH FUNDING SPORTS THROUGH GAMBLING MACHINES ...... 24

5.6 STAKEHOLDER CONSULTATION REQUIREMENTS ............................................................................... 24

5.7 RESULTS OF PRIOR CONSULTATION ................................................................................................ 25

5.8 COMMUNITY GAMING ASSOCIATION KEY POINTS .............................................................................. 27

5.9 VENUE COSTS AND VIABILITY .......................................................................................................... 28

5.10 NEARBY DISTRICTS – POLICY COMPARISON ..................................................................................... 29

5.11 NEARBY DISTRICTS – GAMBLING MACHINE TRENDS .......................................................................... 32

5.12 RECENT LEGISLATIVE REFORMS ..................................................................................................... 33

6.0 WEIGHING THE EVIDENCE.......................................................................................................... 34

6.1 POLICY OPTIONS – BENEFITS AND COSTS ........................................................................................ 35

6.2 CONSIDERATION OF COMMUNITY OUTCOMES ................................................................................... 36

6.3 CONCLUSION ................................................................................................................................. 36

REFERENCES .......................................................................................................................................... 37

APPENDIX 1: GAMBLING ACT 2003 – RELEVANT PROVISIONS ....................................................... 41

APPENDIX 2: RACING ACT 2003 – RELEVANT PROVISIONS ............................................................ 45

APPENDIX 3: THAMES-COROMANDEL DISTRICT GAMBLING VENUE POLICY .............................. 47

APPENDIX 4: CLASS 4 GAMBLING TRENDS IN THAMES-COROMANDEL 2003-2013 .................... 54

APPENDIX 5: SUMMARY OF RESULTS FROM 2007/08 NATIONAL ASSESSMENT ......................... 58

APPENDIX 6: SUMMARY OF VERBAL SUBMISSIONS TO TCDC 2008 .............................................. 61


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Community

fundraising

Problem

gambling

KEY POINTS

The Gambling Act 2003 requires Council to review its policy on whether or not additional clubs, hotels and taverns should be allowed to have pokie machines, where these may be located if they are allowed, and whether or not existing class 4 gambling venues may apply to install additional pokie machines (within legal limits).

In reviewing its policy, Council may have regard to the social impact of gambling within the District and any other relevant matters.

Around 70% of the electronic gambling machines in Thames-Coromandel District are owned by gaming trusts and operated by hotels and taverns, with around two-fifths of the proceeds going toward community fundraising. The remainder are owned and operated by clubs for the benefit of their membership.

Annual net gambling expenditure on pokie machines in the Thames-Coromandel District is approximately $8.9 million. This is distributed in three main ways: more than 37% ($3.3 million) is required to be returned to local communities for community purposes, $2.5 million goes to bars and clubs as operating revenue and $3 million to the Government as taxes and duties. Gambling operators also pay a 1.31% problem gambling levy to Government to recover the cost of the national problem gambling strategy.

Benefits accruing to local community and voluntary organisations as a result of funding from gaming machines include being able to focus on the core purpose of their organisation and knowing there is community money available for a range of community projects. Many sports and community organisations in the Thames-Coromandel are reliant on the proceeds from gaming machines. Neither the Council nor Government has funding to replace these grants.

Electronic gambling machines are designed to enable high frequency gambling over potentially long durations. There is evidence that the intermittent gratification from gambling machines is more addictive than other forms of gambling with lower frequency and duration opportunities. There are an estimated 600-plus people at risk of problem gambling in the Thames-Coromandel District. Symptoms of problem gambling include loss of control, preoccupation with gambling, concealing the extent of gambling and having feelings of anxiety, depression and guilt. Based on a Ministry of Health risk profiling tool, the Thames-Coromandel is estimated to have a ‘medium risk’ community gambling risk profile.

The reasons for an increase or decrease in problem gambling are complex. Any decision to increase or limit gambling has an opposite effect on community funding.

Council’s challenge is to acknowledge the benefits of recreation and community funding from pokie machines and respect the rights of the majority to gamble, but also seek to mitigate the social costs of problem gambling.


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Estimated benefits and costs of class 4 gambling in Thames-Coromandel District

Item Benefits Costs

Fundraising At least $3.3 million per annum for sports, education, health and other community activities

Community and voluntary organisations focusing on the core purpose of their organisation rather than expending substantial efforts on fundraising

Community and voluntary organisations knowing there is community money available for a range of community projects

Long-term benefits by people enjoying facilities, events and programmes funded through class 4 gambling

Monitoring and compliance costs

Personal, family and social costs associated with more than 600 people who are at risk of problem gambling within the District population, including stress, depression and crime

Employment and Income Approximately 58 jobs in clubs, hotels and taverns to service class 4 gambling and estimated $2.5 million per annum reimbursement for hourly, weekly and operating costs

Loss of jobs and income from other local industries due to diversion of discretionary spending (ie, opportunity cost)

Entertainment value for locals

Estimated minimum entertainment value of $8 million per annum for locals (based on revealed preference and assuming economic rationality of gamblers)

Note that this value is an adjunct to other benefits (fundraising, employment and taxes)

Approximately $8 million per annum personal expenditure by locals

Tourism benefits Estimated $0.9 million per annum net expenditure on pokies by visitors

Negligible social cost to residents from visiting gamblers

Taxes Approximately $3 million per annum in tax collected, including problem gambling levy

Diversion of up to $3 million per annum in tax from other forms of taxable expenditure

Disproportionate effect on low income households (regressive tax effect)


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OVERVIEW This report was prepared to help inform Thames-Coromandel District Council’s 2014 Gambling Venue Policy review. Its purpose is to advise Council and other stakeholders of relevant considerations on the social and economic impacts of class 4 gambling in the Thames-Coromandel District. It includes information about historical trends in local electronic gambling machine (pokie machine) numbers and venues, and hence an indication of the impact of Council’s current sinking lid policy. It also includes other information that may be considered by Council as part of the review, including a summary of neighbouring districts’ policies. Background The Gambling Act 2003 seeks to balance the positive aspects of recreation and community funding against the negative consequences of problem gambling for a minority of people. The Gambling Act requires all territorial authorities to have a policy on class 4 gambling venues in order to regulate the location and scale of pokie machine venues according to local preferences. The Racing Act 2003 also requires councils to adopt and triennially review a Racing Board (stand-alone TAB) venue policy. In both cases, councils must have regard to the social impact of gambling within the District. Communities benefit substantially and measurably from the proceeds of class 4 gambling. Most electronic gambling machines in New Zealand are operated under a charitable model whereby gaming trusts own and operate them for philanthropic purposes. These proceeds are typically distributed through community grants. Others are in chartered clubs, sports clubs and RSAs that can own and operate pokie machines for the benefit of their membership (eg, toward club operating costs), and casinos which are commercial profit-making operations. On the other hand, pokie machines are designed to enable high frequency gambling over potentially long durations, which can lead to issues for people who are predisposed to pathological gambling. Research, crime reports, media reports and anecdotal evidence suggest that problem gambling contributes significant social harm to local communities. The level of secrecy associated with problem gambling means its effects are largely unseen and unmeasured. The Gambling Act requires all territorial authorities to have a policy on whether or not additional clubs, hotels and taverns should be allowed to install pokie machines and, if so, where they may be located. The policy may specify a maximum number of gambling machines for any additional venues up to the legal limit. Council must also have a policy on whether or not stand-alone TABs (Board Venues) may be established in the District. Once Council has granted consent for a new venue or an increase in machines at an existing venue, this cannot be revoked and Council has no retrospective authority over venues to which it has granted consent. Council currently has a sinking lid policy for class 4 gambling, under which no consent will be granted for any new pokie venues or additional pokie machines within the District. Recent changes through the Gambling (Gambling Harm Reduction) Amendment Act 2013 – formerly known as the Flavell Bill – also impact on this review, particularly the requirement to consider having a policy with regard to existing class 4 venues that may wish to relocate within the District. The new provisions are intended to provide a tool for territorial authorities to help address concentrations of pokie machine venues in high deprivation areas. Council may also wish to clarify through this review its policy position on merger applications. This would apply, for example, in a situation where a local RSA and club both wished to merge into a single larger club with 30 machines as could be permitted under Ministerial discretion, subject to Council consent.


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Review of Gambling Venue Policy The Gambling Act requires Council to review its Gambling Venue Policy every three years. In undertaking the review, Council may have regard to the social impact of gambling within the District and any other relevant matters. Details of the 2014 policy review process are available from Council’s Strategic Planning Team.

A spectrum of options exists for revising Council’s policy, for example: 1. Status quo – Sinking lid. Under this policy no consents would be issued for new class 4

gambling venues or machines. If an existing venue loses its license to operate pokie machines, no new venue could then apply for consent to replace it.

2. Cap – An upper limit on the number of gambling venues and/or machines. Council may

only issue new consents so long as the number is below the cap. Any competing applications would be selected by ballot or otherwise. The cap may be set at, above or below existing numbers. If set below existing numbers then this would retain an interim sinking lid effect. The cap may also be associated with population-based ratios that change over time.

3. No cap – This would allow applications for new venues and/or increased machines at

any eligible venue (up to the legal limit), subject to location criteria being satisfied. Separate additional options exist with regard to a relocation policy, namely: 4. Status quo (implicit) – Do not allow relocation of any existing venue. No existing venue

may apply to operate at a different location. If an existing venue loses its license to operate pokie machines, no new venue could then apply for consent to replace it, whether at that location or any other location within the District.

5. Allow relocations – This would permit any new venue to replace an existing venue if

specified Council conditions are met, and hence enable the Department of Internal Affairs (DIA) to grant a new class 4 venue licence in respect of the new venue.

Electronic gambling machines and venues in the Thames-Coromandel District Since introduction of the Gambling Act 2003, the net number of pokie venues (licensed and consented hotels, taverns and clubs) in the Thames-Coromandel District has dropped from 34 to 23. This figure includes a new bar and a new hotel that commenced operating pokie machines prior to the adoption of Council’s 2008 Gambling Venue Policy, both of which operate up to their maximum permissible nine machines.1 Since 2003, the total number of pokie machines in the District has fallen by 22% from 348 to 270. This figure includes increased numbers of machines at a few existing venues in accordance with Council consents granted during the period 2004-2006. Total machine and venue numbers have been falling overall for a range of reasons including: Costs of establishing electronic monitoring (approximately $50,000 per venue). Increased pressure on venue viability because of requirements for societies to return a

minimum of 37.12% to authorised purposes. Reduced returns to venue operators due to limits on venue expense reimbursements. Costs of investment in new equipment.

1 Gambling venue licences granted after 17 October 2001 can have up to a maximum of nine machines.

Prior to this the maximum was 18 machines.


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Tighter enforcement by the DIA on gambling shops (ie, class 4 gambling must not be the dominant purpose of the venue and the business must not be dependent on class 4 gambling to survive, otherwise it can be penalised).

Attrition associated with Council’s sinking lid policy (no new venues or machines consented since 2008).

Of the 13 local venues that stopped operating pokie machines since 2003, most were clubs or taverns with only a small number of machines. A small number of larger operators within Thames contributed disproportionately to the fall in pokie machine numbers, notably the former Brian Boru Hotel (previously 18 machines), the Salutation Hotel (12), Thames RSA (10) and the former Goldmine gaming lounge (18) which closed following a staff theft of gambling proceeds.2 Another trend evident over the past decade is a rationalisation of gaming machine ownership toward Pub Charity, The Lion Foundation and New Zealand Community Trust. These three societies collectively own 159 (85%) of the 186 pokie machine in the District that are located in hotels and taverns (excluding machines in clubs and RSAs). A further 18 machines are owned in the Junction Hotel by the Grassroots Trust Ltd which was established in August 2012, and the remaining nine are owned by Trillian Trust at the Punters Bar and Grill in Tairua. As at December 2013 there was 12.7 non-casino gambling machines per 1000 adults in the Thames-Coromandel District compared with 5.4 nationally. Benefits and costs of class 4 gambling Benefits 1. Fundraising Gaming machines in the Thames-Coromandel District raises approximately $3.3 million per year for charitable purposes, including grants for sports, education, health and many other community activities.3 The real value of grants is likely to be higher due to multiplier effects relating to the beneficiaries of funding, for example indirect benefits to the families of sports club members benefiting from facilities provided through gambling proceeds. Benefits accruing to community and voluntary organisations as a result of class 4 gambling proceeds include being able to focus on the core purpose of the organisation (rather than expending substantial efforts on fundraising) and knowing there is community money available for a range of community projects. Many clubs, sporting and community organisations are reliant on gambling proceeds for their viability. Results of a 2005 survey of gambling machines operators throughout New Zealand (DIA, 2007) showed that approximately 47% of class 4 gambling proceeds (net of venue expenses and taxes) were being distributed to sports/physical activities recipients, 40% to social/community services, 4% to arts and culture, 4% to heritage/conservation and the remainder to various other types of recipients. The most recent 2011 update (DIA, 2012) found that sporting organisations continue to receive around half of the total allocation from gambling machine societies while charitable purposes such as education, social services, health and the environment share in the remaining proceeds. The funding available from pokie machines in the Thames-Coromandel District during the past year is estimated to be approximately $1 million per annum less than 2003 levels due to declining number of venues and machines and relative diversion of expenditure to other modes of gambling (eg, Lotteries Commission products and online gambling). 2 Further information about Thames-Coromandel pokie venue trends is in Appendix 4.

3 To give an idea of scale, TCDC’s contestable Community Grants scheme in 2013/14 distributed

approximately $130,000. This equates to 4% of the amount distributed from pokie machine proceeds through community grants and contributions to club operating expenses.


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2. Income and employment Thames-Coromandel District’s pokie bars and clubs earn an estimated $2.5 million per annum in venue reimbursements and club expenses and employ approximately 58 people as a result of class 4 gambling. 3. Entertainment value for locals The entertainment value of class 4 gambling for locals in the Thames-Coromandel District is an estimated minimum of $8 million per year, based on the amount that people spend each year on pokie machines in the District. However, this ‘revealed preference’ estimate assumes the economic rationality of all gambling participants (ie, that all participants are pursuing lifetime wealth or utility maximisation) which is unlikely to be a valid assumption. 4. Tourism benefits Analysis of electronically monitored gambling expenditure suggests that seasonal visitor activity contributes less than $900,000 per annum compared to an estimated $8 million base level of net expenditure per annum. That is, around 90% of gambling expenditure in the District is estimated to be due to usual residents rather than visitors. Class 4 gambling is unlikely to be seen as a major tourism attraction for the District, although a minority of visitors might be dissuaded from travelling to the Thames-Coromandel if pokie machines were not accessible. Costs 1. Diversion of income and employment Offsetting the income and employment aspects of class 4 gambling there may be economic opportunity costs associated with diverting expenditure from other industries, particularly if these had higher labour intensity, higher wages and/or greater flow-on effects to local industries. Recent evidence in support of this argument has emerged in New Zealand. For example, a 2009 economic analysis for Christchurch suggested that the economic impacts of class 4 gambling are largely offset through lost output, employment and household income (cited in Christchurch City Council 2012). Similarly, Auckland Council (2012a) estimated that, once opportunity costs are accounted for, the valued added to the economy is only around 2.3% of total gambling machine proceeds and would be negative if the social dividend associated with community fundraising was removed. 2. Private and social costs of problem gambling The majority of people who gamble as a leisure activity feel no ill effects beyond their private losses. However, for some individuals, frequent and prolonged use of pokie machines can lead to compulsive gambling problems. There is evidence that the intermittent gratification from gambling machines is more addictive than other forms of gambling. Problem gambling is characterised by symptoms such as loss of control over one’s gambling, a preoccupation with gambling and lying to people to conceal the extent of gambling. A disproportionate amount of the social cost is borne by ‘at risk’ sub-groups including Māori (eg, Adams et al 2004, p 8). Survey results show that people with higher relative gambling losses have worse physical health, worse mental well-being, poorer relationships with family/friends, poorer feelings about self, poorer overall quality of life, lower overall satisfaction with life, poorer material standard of living, poorer study/training performances, are less likely to be employed (eg, SHORE 2008) and may be more likely to be associated with criminal behaviour (Bellringer et al 2009).


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The number of people at risk of problem gambling in the Thames-Coromandel District is estimated at more than 600 (ie, approximately 3% of the adult population). Any estimates of problem gambling rates are contentious due to difficulties in defining problem gambling and identifying problem gamblers. Research undertaken by the Centre for Social and Health Outcomes Research and Evaluation (SHORE, 2008) found that approximately 3.2% of the adult population were ‘heavy gamblers’ (defined as spending more than 3 hours per week and/or at least 5% of their income on gambling). Of these, approximately 50% of males and 75% of females reported pokie machines as their primary mode of gambling. Other studies have reported higher or lower problem gambling rates. For example the 2012 New Zealand Health Survey estimated a conservative rate at 0.3% for current problem gamblers, whereas Pinge (2008) adopts a broader problem gambling rate of 3.36%. Several alternative prevalence rates estimates are cited in Thorne et al (2012). In summary, prevalence rate estimates for problem gambling appear to be highly contingent on survey methodologies and definitions, and are inherently difficult to measure due to secrecy and non-reporting levels of problem gamblers. Research also indicates that five to seven other people can be affected by the behaviour of a single problem gambler (eg, Adams et al 2004, p 8; Ministry of Health 2012, p 9). Submissions to various local authorities in 2013 by the Community Gaming Association indicate that the gambling industry considers ‘97% of the population … gamble in a responsible manner’, implying that approximately 3% of adults gamble irresponsibly. This is similar to the latest New Zealand Health Survey estimate of people ‘at risk’ of problem gambling. 3. Regressive tax effect There is a disproportionate expenditure effect on low income households from class 4 gambling due to the low socio-economic profile of many problem gamblers. Hence there is likely to be a marginal net disbenefit associated with taxes collected through class 4 gambling compared to taxes on other activities. Gambling industry perspective The Community Gaming Association (CGA) makes submissions to many territorial authorities as they triennially review their gambling venue policies, to ensure a strong voice for its constituency of organisations that operate gaming machines. Key points raised by CGA generally include: That there is a great deal of emotive and ill informed commentary regarding the impact

of electronic gambling machines. That sinking lid policies result directly in a reduction of community funding. That there is no solid evidence that sinking lid policies deliver measurable outcomes for

the community in terms of reducing gambling harm. That there is far more good achieved by fundraising from electronic gambling machines

as opposed to the very small percentage of population that have an issue with their operation.

That survey results confirm there is no direct correlation between gaming machine numbers and addictive gambling rates.

Conclusion Council’s challenge is to acknowledge the benefits of recreation and community funding from pokie machines and respect the rights of the majority to gamble, but also mitigate the social costs of problem gambling. Council’s policy decision should be determined by community values and supported by the latest available information.


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1.0 INTRODUCTION

1.1 Class 4 gambling venues Under the Gambling Act 2003, Council must have a policy on class 4 gambling venues, and under the Racing Act 2003 it must have a Racing Board (stand-alone TAB) venue policy. Relevant sections of legislation are shown in Appendices 1 and 2. Council’s current policy is in Appendix 3. The key purpose of this report is to inform Council and key stakeholders about the social impacts of class 4 gambling and give an overview of the context and implications. Class 4 gambling is defined in the Gambling Act as the use of an electronic gambling machine outside a casino. Such machines are colloquially referred to as a poker machines or pokie machines throughout New Zealand and as gaming machines by the Gambling Act and gambling industry. The term ‘class 4’ refers to the frequency and duration of gambling opportunities and potential for social harm. High gambling frequency and duration has been linked with the onset of pathological gambling. Electronic gambling machines are designed to enable high frequency gambling over potentially long durations, and hence have the potential to be associated with greater harm than other forms of gambling. Class 4 gambling may only be conducted by a club or society and only to raise money for authorised community purposes. Within the Thames-Coromandel District, at least $3.3 million annually is estimated to be returned to local communities for charitable purposes from class 4 gambling expenditure. Under legislation, all previously licensed pokie machine venues (hotels, taverns and clubs) have existing use rights to operate up to 9 or 18 machines depending on when they were licensed. Any new applicants or venues seeking to merge or relocate within a jurisdiction must seek local government consent as well as Ministerial licensing approval. Local government’s role in class 4 gambling regulation is very limited compared to central government’s role. Gambling is primarily regulated by the Department of Internal Affairs (DIA). For example, the Gambling Act empowers the Secretary to suspend for up to six months, or cancel entirely, a class 4 venue licence if they are satisfied that any of a range of grounds are no longer being met. Such grounds include there being more than a minimal possibility of persons under 18 years old gaining access to the venue, dissatisfaction with the suitability of venue management or breaches of conditions specified in class 4 venue licences to prevent pokie machines being used unless the primary activity of the venue is offered and available. In contrast, local government’s role is restricted to specifying whether or not any new class 4 venues may be established within their jurisdiction and, if so, where they may be located. Once Council has granted consent for a new venue or increase in machines at an existing venue, this cannot be revoked. Moreover, Council has no retrospective authority over venues to which it has granted consent. Not all class 4 gambling venues require Council consent. Existing venues licensed prior to 17 October 2001 do not require approval to continue ongoing operations provided they are not seeking to increase their number of machines. Venues that do require consent include: Any new prospective new class 4 gambling venue. Any existing class 4 gambling venue whose licence has lapsed for six months or more

and which is seeking reinstatement. Any existing class 4 gambling venue wishing to increase its gambling machines from its

existing licensed maximum, including clubs seeking to merge their operations into one location.

Any society or club wishing to relocate to a different venue than that to which its current class 4 venue licence applies.


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1.2 Racing Board venues A Board venue is any premises owned or leased by the New Zealand Racing Board whose main business is to provide race-betting and/or sports-betting services. Board venues should not be confused with smaller TAB outlets or betting agencies that are ancillary to the main activities of a hotel or tavern. These are not owned by the Racing Board and as such do not require Council consent. Council’s Board Venue Policy must specify whether or not new stand-alone Board venue may be established in the District and, if so, where they may be located.

1.3 Review of Gambling Venue Policy Council’s Gambling Venue Policy (refer Appendix 3) was adopted on 31 March 2008. It was reviewed in February 2011 but remained unchanged. Its main objectives are:

To ensure Council and the community have influence over the provision of new Class 4 and TAB gambling in the Thames-Coromandel District.

To allow those who wish to participate in gambling machine and TAB gambling to do so within the Thames-Coromandel District.

In summary, the substance of the Policy is that:

A sinking lid policy is in place with regard to electronic gambling machines, such that no new pokie machine venues or increased machine limits will receive Council consent.

Where a gaming society surrenders or otherwise ceases to hold its class 4 venue licence in relation to a particular venue, Council’s implicit relocation policy appears to be that no consent would be granted to that society (or another society) in relation to a different venue.

Subject to Council consent, the New Zealand Racing Board may establish new Board venues within the District where the main business carried on is providing racing betting or sports betting services. No limit is imposed on the number of stand-alone Board venues, subject to meeting District Plan and other relevant policy requirements. (Note: this policy does not relate to venues with an ancillary TAB outlet and, for the purpose of this policy, any TAB venue with class 4 machines is to be considered a class 4 venue).

1.4 Policy options A spectrum of options exists for revising Thames-Coromandel District Council’s policy, for example: 1. Status quo – Sinking lid. 2. Cap – An upper limit on the number of gambling venues and/or machines. 3. No cap – Subject only to meeting Council’s location criteria. Separate additional options exist with regard to a relocation policy, namely: 4. Status quo (implicit) – Do not allow relocation of any existing venue. 5. Allow relocation – Subject to Council conditions. An analysis of each of these options is provided in this report in terms of social, economic, environmental and cultural benefits and costs.


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2.0 GAMBLING IN NEW ZEALAND Since the 1980s there has been a proliferation of new forms of gambling driven by technological progress and policy change (refer below). Gambling is now a relatively normalised activity in which a majority of the adult population participates in some way in any given year (eg, SHORE 2008; Ministry of Health 2012). New Zealanders now have greater opportunity to participate in more frequent and prolonged forms of gambling. Table 1: History of Gambling in New Zealand 1929-2013 Year Description

1929 Golden Kiwi lottery commences

1951 TAB commences

1951-1987

Most gambling opportunities involve a visit to the TAB or track, or buying a Golden Kiwi ticket. Others include community fundraising (eg, housie/raffles) and amusement parlour games

1987-1997

Lotto introduced 1987 Electronic gambling machines introduced 1988 Instant Kiwi introduced September 1989, replacing Golden Kiwi Lotto Strike introduced March 1993 Daily Keno introduced October 1994 Christchurch Casino opens November 1994 Auckland Casino opens January 1996 Telebingo introduced July 1996 Sports betting introduced 1996, managed by the TAB Also over this period: Gambling machines become available in clubs/hotels/bowling alleys National increase in gambling machine licenses approved from approximately 8,000 to 15,000 Maximum number of gambling machines per site increased from 12 to 18 Jackpots from gambling machines raised from $100 to $500 7-day horse and/or dog racing introduced Trackside TV channel introduced Pub TAB’s introduced Telephone gambling games introduced

1997-2003

Gambling machines account for more than half of all gambling expenditure in New Zealand Casino room formats are set up in pubs, incorporating both TAB and gambling machines TAB betting on the internet commences June 1998 TAB phone bets make up more than one-third of the TAB’s total racing and sports turnover Licensing approval is granted for two casinos in Queenstown, one in Dunedin and one in Hamilton Proliferation of new gambling websites on the Internet NZ Lotteries Commission introduces Lotto Powerball Keno extended to Saturdays and Sundays NZ Lotteries Commission introduces a second Bonus Ball to Lotto

2003 Gambling Act 2003 is adopted to: Control the growth of gambling Prevent and minimise the harm caused by gambling, including problem gambling Ensure the integrity and fairness of gambling opportunities Ensure that money from gambling benefits the community Facilitate community involvement in decisions about the provision of gambling

2004 to 2006

Keno extended with a 1pm and 6pm draw every day of the week NZ Lotteries Commission introduces a range of new products (eg, Big Wednesday and Winning Wheel) and announces plans for Internet gambling Lotto First Division is now at least $1 million every week; Second Division Prize has increased from an average of $4,000 to an average $20,000; average prize values in all other Divisions also increase; second Bonus Ball phased out due to customer demand for simplicity Gambling is recognised as one of the largest sources of turnover on the Internet, at an estimated minimum US$10 billion globally per annum, and possibly much higher Number of non-casino pokie machines falls from 25,221 (Sept 2003) to 20,302 (Mar 2007) following the introduction of a new regulatory environment under the Gambling Act 2003

2007 to 2013

From March 2007 all individual bets in non-casino gambling machine are recorded and monitored by a nation-wide electronic monitoring system. Lotto tickets become available online in 2008 From 1 July 2009 all pokie machines must have Player Information Displays which inform the gambler how long they have been playing, how much they have lost and encourage them to take breaks From 15 September 2011, class 4 gaming societies may establish multi-year grant arrangements subject to compliance with the legislation In May 2013 the Government announces it will allow Skycity Auckland casino to install an additional 230 pokie machines and 40 new gambling tables in exchange for a convention centre Faster and more ubiquitous Internet access enables new online gambling experiences

Source: Compiled by APR Consultants from a range of sources including DIA information and Wikipedia (predominantly ‘Gambling in New Zealand’).


4

2.1 Gambling regulation Most pokie machines in New Zealand are operated under a charitable model whereby gaming trusts own and operate machines for philanthropic purposes. The exception is chartered clubs, sports clubs and RSAs which own and operate machines for the benefit of their members, and casinos which are run as commercial operations. Gambling legislation aims to maximise the community benefits from entertainment and the proceeds of gambling while minimising harm from problem gambling. Under the Gambling Act, territorial authorities have the ability to place restrictions on the location and scale of any proposed new class 4 gambling venues and Board Venues. Other agencies responsible for different aspects of the Act are shown below. Table 2: Key agencies responsible for administering the Gambling Act 2003 Agency Responsibilities

Department of Internal Affairs

Administer gambling legislation; license gambling activities (except casino gambling); ensure compliance with legislation; and provide public information and education.

Ministry of Health Fund and co-ordinate problem gambling services: www.health.govt.nz/our-work/mental-health-and-addictions/problem-gambling.

Gambling Commission Determine applications for casino operators’ licenses and renewal of casino venue licenses; deal with any complaints about the way the DIA handles its role in relation to class 4 gambling; and advise Ministers on the setting of the Problem Gambling Levy.

Territorial authorities Regulate the scale and location of any proposed new class 4 gambling venue or racing board venue.

Source: Adapted from information on the DIA website, accessed 10 July 2006. Table reviewed 26 January 2014.

Detailed Game Rules issued by the Department of Internal Affairs define how each venue should operation its machines, handle cash and banking, ensure all key events are recorded and respond to player issues. Harm minimisation regulations specify how venues should manage their statutory obligations to have trained staff on duty to deal with possible problem gamblers. From March 2007 all individual bets in non-casino gambling machine are also recorded and monitored by a nation-wide electronic monitoring system.

2.2 Gambling machine numbers Since the passing of the Gambling Act 2003, the number of class 4 venues and machines has decreased (see below). Additional costs introduced under subsequent licensing requirements, including electronic monitoring since 2007, have resulted in less pubs and clubs having pokie machines. Smaller, less viable venues in particular could be not be sustained under additional regulatory constraints. As at 31 December 2013, there were 17,266 pokie machines in bars and clubs throughout New Zealand based at 1,335 venues including hotels, pubs, RSAs, sports clubs, restaurants and other venues, plus approximately 3,000 machines in the six casinos. Figure 1: Pokie machine numbers in New Zealand – June 1994 to December 2013

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Source: Data from DIA website, accessed 26 January 2014. Note: Pokie machine numbers in New Zealand peaked at 25,221 in September 2003, the month the Gambling Act 2003 was passed into law.

http://www.health.govt.nz/our-work/mental-health-and-addictions/problem-gambling

http://www.health.govt.nz/our-work/mental-health-and-addictions/problem-gambling


5

2.3 Gambling expenditure Gamblers in New Zealand spent a nominal record of $2.068 billion dollars on the four main forms of gambling in the 2011/12 financial year. However, this is only 1.4% higher than the $2.039 billion recorded in 2004. In inflation-adjusted terms, total gambling expenditure in 2012 has declined by almost 19% since 2004. Figure 2: Gambling expenditure statistics for New Zealand – 1982 to 2012

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casinos)

NZ Lotteries Commission

Racing

Source: Data from DIA website, accessed 26 January 2014. Notes: Excludes additional Internet gambling. Figures shown are actual dollars (non-inflation adjusted) for gambling operators’ financial year, or the gross amount wagered minus amount paid out or credited as prizes or dividends. Expenditure lost by gamblers is equivalent to the proceeds from gambling.

Table 3: Reported gambling expenditure by main form of gambling – 2008 to 2012

Source: Data from DIA website, accessed 26 January 2014. Notes: (1) Actual dollars (non-inflation adjusted) for gambling operators' financial year-end; (2) Totals may differ from the sum of column entries due to rounding.


6

A survey by Massey University’s Centre for Social and Health Outcomes Research and Evaluation (SHORE 2008) estimated that approximately 8% of the adult population play the pokies in bars/pubs, along with others who play in clubs and casinos. Based on approximate national population aged 18 and over in 2013 (ie, 3.2 million people) and official gambling expenditure statistics for 2012, there is an average net expenditure in New Zealand of $267 per person on non-casino pokie machines (refer table below). Note that this represents a considerable decline compared to prior estimates (eg, an estimated nominal $282 per person in 2008). An increasing proportion of the gambling spend is through a combination of casino betting, Lotto, Telebingo, Daily Keno, Instant Kiwi, TAB race and sports betting and Internet gambling, whereas in 2004 the amount spent on pokie machine gambling was similar to the combined spend on all other main forms of gambling. An estimated 2.3% of the population’s income is spent on all forms of gambling each year, including an estimated 0.9% of total income spent on pokie machines. This collectively involves wage and salary earners, unemployed people, retirees, other beneficiaries and students. The percentage of income spent on gambling is higher in the Thames-Coromandel District due to higher gambling expenditure and lower average incomes. An estimated $377 on average is spent by Thames-Coromandel District residents on pokie machines per annum, representing 1.6% of median annual income (refer table below). These indicative figures are further supported by DIA electronic monitoring records, which show that more than 1% of national pokie machine expenditure occurs in Thames-Coromandel during the off-peak September quarter, whereas the District is home to only 0.6% of the total usually resident population of New Zealand. Note that the figures reported above are all based on averages whereas the profile of gambling expenditure is not spread evenly across the population. Most of the community share of gambling is borne by a minority of gamblers but precise estimates are not available. According to Canadian research cited by the Problem Gambling Foundation of New Zealand (PGFNZ), up to 96% of the total share of gambling is borne by as few as 25% of all pokie players (eg, Hayward and Colman 2004, p 22). A 2010 Australian Productivity Commission report (cited in True, 2013) estimated that problem gamblers’ share of total expenditure on gambling machines was approximately 40%, while other researchers suggest it could be as low as 10-20%. Information from agencies such as PGFNZ, budget services and the justice system indicate some individual problem gamblers contribute tens and even hundreds of thousands of dollars per year through non-casino gambling machines. Table 3: Gambling expenditure per capita 2013 estimates

Row Item Amount Source

A Total gambling expenditure per annum $2,068,230,227 DIA gambling expenditure statistics (2012)

B Non-casino gambling machine expenditure per annum $853,954,456 DIA gambling expenditure statistics (2012)

C Approximate population aged 18 and over 3,200,000 Estimated from 2013 Census data by age group

D Total gambling expenditure per person per annum $646 A ÷ C

E Non-casino gambling machine expenditure per person per annum $267 B ÷ C

F Median annual income for population aged 15 and over, 2013 Census

$28,500 Statistics NZ 2013 Census

G % of median annual income lost to gambling 2.3% (D ÷ F) × 100

H % of median annual income lost to non-casino electronic gambling machines

0.9% (E ÷ F) × 100

I Approximate adult population, Thames-Coromandel District 21,200 Estimated from 2013 Census data by age group

J Estimated annual loss to electronic gambling machines, Thames-Coromandel District – usual residents only

$8,000,000 Electronic monitoring of expenditures – estimated loss to usual residents only (based on off-peak quarters)

K Annual loss to electronic gambling machines, Thames-Coromandel District – usual residents and visitors

$8,888,865 Electronic monitoring of expenditures – year to September 2012

L Non-casino gambling machine expenditure per person per annum, Thames-Coromandel District - usual residents only

$377 J ÷ I

M Median annual income for population aged 15 and over, Thames-Coromandel District 2013

$23,200 Statistics NZ 2013 Census

N % of median annual income lost to non-casino electronic gambling machines - Thames-Coromandel District

1.6% (L ÷ M) × 100

Note: The Internet enables an increasing range of options for gambling from home using credit cards and gambling accounts, which is not captured in the expenditure estimates above. Source: Various data from Statistics New Zealand and DIA.


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3.0 GAMBLING MACHINES IN THE THAMES-COROMANDEL DISTRICT

Appendix 4 lists all past and current non-casino gambling venues (clubs and pokie bars) in the Thames-Coromandel District, including the number of gambling machines in 2013 compared to 2007 and 2003. Key points are summarised below.

3.1 Gambling venues and machines As at 31 December 2013, Thames-Coromandel District was home to 1.72% of New Zealand’s class 4 gambling venues and 1.56% of all non-casino gambling machines, and the proceeds from gambling were around 1% of total national expenditure. By comparison, Thames-Coromandel District was home to approximately 0.66% of the national adult population as at the 5 March 2013 Census. This means that, despite reductions in recent years, Thames-Coromandel still has a higher ratio of pokie machines per resident and higher level of expenditure per person than many other parts of New Zealand. Taking visitor expenditure into account makes little difference to this comparison. The table below shows that as at December 2013 there were 270 gambling machines in the District, which represents a drop of 19% since Council’s 2008 Gambling Venue Policy was introduced and a total reduction of 22% since the introduction of the Gambling Act 2003. As at 31 December 2013 there was an average of approximately 12.7 non-casino gambling machines per 1000 adults in the Thames-Coromandel District compared with a national average of 5.4 machines per 1000 adults. Table 4: Summary of venues and machines in the Thames-Coromandel District

22 Sept 2003 30 Sept 2007 31 Dec 2013

Total number of venues 34 30 23

Total number of machines 348 334 270 Source: Compiled from information on DIA website.

Of the 23 class 4 gambling venues currently operating in the Thames-Coromandel District, eight are clubs (eg, bowling clubs and RSAs) and the remaining 15 venues operate machines owned by gaming societies for the purpose of community fundraising. Between 2003 and 2007, prior to the adoption of Council’s 2008 Gambling Venue Policy, one new bar and one new hotel commenced operating pokie machines. Both of these have up to their maximum permissible nine machines. In addition, a small number of pre-existing venues have increased their machine numbers since 2003 in accordance with Council consents granted during the period 2004-2006. Of the 13 venues that stopped operating gambling machines since 2003, most were clubs or taverns with only a small number of machines. There were also several larger operators in Thames that contributed disproportionately to the fall in pokie machine numbers, notably the former Brian Boru Hotel (previously 18 machines), the Salutation Hotel (12), Thames RSA (10) and the former Goldmine gaming lounge (18) which closed following a staff theft of gambling proceeds. On average, pokie bars (hotels and taverns) in the Thames-Coromandel District currently have 12.4 machines while clubs have an average of 10.5 machines.


8

3.2 Gambling machine expenditure Since the introduction of electronic monitoring in 2007, considerably more detailed information has become available about class 4 gambling proceeds (ie, net expenditures by gamblers) at the territorial authority level. All individual pokie bets are now recorded and monitored, with quarterly statistics published at the local body level by the DIA. The statistics for Thames-Coromandel District (below) indicate that: Annual net gambling expenditure on pokie machines in the Thames-Coromandel District

is approximately $8.9 million, having trended downward from more than $11 million per year in the period prior to 2007.

There is a seasonal element, with quarterly pokies net expenditure in the Thames-Coromandel peaking at around 1.3% of total national pokies spending in the March quarter and falling to around 1.0% in the September quarter.

Based on the difference between peak and off-peak expenditures, the level of net expenditure on pokies by visitors to the Thames-Coromandel District is estimated at approximately $900,000 per annum.

Figure 3: Quarterly gambling machine proceeds in the Thames-Coromandel District

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Thames-Coromandel District ($) % of national GMP Linear (Thames-Coromandel District ($))

Source: Data from DIA website, accessed 26 January 2014. Note: Figures shown are actual dollars (non-inflation adjusted).


9

4.0 BENEFITS AND COSTS OF CLASS 4 GAMBLING IN THAMES-COROMANDEL DISTRICT

This section summarises the main benefits and costs associated with class 4 gambling in the District.

4.1 Benefits 1: Fundraising Hotel and tavern based gambling machines in the Thames-Coromandel District are owned by a variety of societies including Pub Charity Inc (4 venues), The Lion Foundation (5 venues), New Zealand Community Trust (4 venues), Grassroots Trust Ltd (1 venue) and Trillian Trust (1 venue). In addition there are eight clubs that operate gambling machines for the benefit of their membership including Whangamata Club, Mercury Bay Club, Pauanui Sports & Recreation Club, Thames Workingmen's Club, Whangamata RSA and local bowling clubs. Benefits that accrue to community and voluntary organisations as a result of being able to access class 4 gambling proceeds include: Being able to focus on the core purpose of the organisation rather than expending

substantial efforts on fund raising. Knowing there is money available for community projects. Regulations made under the Gambling Act 2003 require corporate societies that own gambling machines to prove they distribute at least 37.12% of their proceeds for approved charitable purposes, though not necessarily to applicants from within the District limits.4 Authorised purposes include sports, arts, community projects, heritage, conservation and other activities. The most recently available DIA (2012) report on the distribution of non-casino gaming machine proceeds in New Zealand confirmed that sporting organisations continue to receive around half of the total allocation by gambling machine societies. The 2011 distribution profile (below) was similar to 2005. Table 5: Societies’ allocations of gambling machine proceeds by recipient type – New Zealand 2011

Recipient organisations Percent of total funding

Culture, sport and recreation 55%

Education and research 14%

Social services 11%

Health 8%

Development and housing 8%

Environment 1%

Religion 1%

Grant making, fundraising and voluntarism promotion 1%

Other 1%

Total 100% Source: DIA (2012) ‘The distribution of non-casino gaming machine profits in New Zealand’.

4 The terms proceeds and expenditure are interchangeable in relation to gambling machines, depending on whether

you are an operator or gambler. Expenditure is the total gambling machine turnover less the winnings paid out. Approximately one-third of proceeds are paid to the Government as duties and taxes, and at least 37.12% to charitable purposes. A problem gambling levy is also paid.


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Based on estimated current annual gambling machine proceeds of $8.9 million in the Thames-Coromandel District, the community grants that should be paid to local organisations by gambling machine societies are worth at least $3.3 million per year and may be higher. Note this is a rough estimate and exact figures at the territorial authority level are not centrally available. Some territorial authorities have commissioned one-off projects to compile this information for their area, often in collaboration with researchers from the Problem Gambling Foundation of New Zealand. There is broad agreement that sport clubs and other not-for-profit and community-based organisations are increasingly reliant on gambling grants as a source of funding. Auckland Council commissioned a community funding survey in 2012 using contact databases for 580 general funding recipients and 410 arts contacts. Key findings included: One-third of the respondents (33%) considered gambling trusts to be a major source of

funding, with a further 37% indicating that they were a moderate funding source. Most respondents (75%) indicated their organisation is moderately or totally reliant on

this source to fund core business. Most respondents (55%) believed that there would be a high to extreme risk to their

organisation and their core business if they did not receive proceeds from gambling. A further one quarter (26%) said that there would be a moderate risk if they did not receive it.

Two-thirds of respondents (68%) said they thought they would be unlikely to find another source of funding if gambling funding was not available.

Note that not all class 4 gambling proceeds raised within the Thames-Coromandel District necessarily go toward local purposes, as some funding applicants may reside outside the District. Conversely, some local organisations may benefit from gambling that occurs in other jurisdictions. To the best of our knowledge, no information is centrally held or monitored regarding these cross-jurisdictional flows. No robust data is available on the effect of Thames-Coromandel District’s 22% reduction in pokie machine numbers over the past decade on the availability of funding for community purposes. However a rough estimate is that community funding available from class 4 gambling machines in Thames-Coromandel District in 2013 was approximately $1 million less than 2003 levels. Data available through electronic monitoring indicates that annual gambling machine proceeds fell by $2.2 million in the Thames-Coromandel District between 2007/08 and 2012/13, representing a loss in annual community funding of approximately $800,000 during this period (based on distribution of at least 37.12%).

4.2 Benefits 2: Income and employment The Gambling Act 2003 permits societies to reimburse venues for the actual, reasonable and necessary costs (ARN costs) they incur within limits imposed by a 2008 Gazette Notice. It is not the intention of the legislation or regulations that class 4 venues make profits from hosting class 4 gambling operations. The Gambling Commission has emphasised that any venue payments made in excess of actual, reasonable and necessary costs would be an illegal use of net proceeds and therefore a misuse of community money. Exact figures on employment in the class 4 gambling industry in Thames-Coromandel District are not available. A rough estimate is that approximately 2.5 full-time equivalent positions are created by each class 4 gambling venue (not counting staff that would be employed at each venue for hospitality and management), or approximately 58 employees in total for the Thames-Coromandel District. According to the Community Gaming Association, the majority of class 4 gambling venue operations are undertaken by people employed as managers because of the significant risks involved in compliance and operational failures. A 2013 DIA research report found more than 44% of venue staff nationally are paid $35+ per hour.


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According to information published on the Department of Internal Affairs website (accessed 31 January 2014), the Limits and Exclusions on Class 4 Venue Costs Notice of 17 July 2008 places limits on the maximum amount a society can pay a class 4 gambling venue (refer table below). The 16% cap expressed as Limit D in the Gazette Notice applies to the total amount a corporate society can pay all of its venues and acts to ensure minimisation of costs and maximisation of returns. CGA has previously indicated an approximate average profit rate of $180 per machine per week for estimation purposes. Applying this to Thames-Coromandel District’s class 4 gambling venue profile as at 31 December 2013, and assuming clubs have a similar revenue stream as pokie bars, provides an overall annual estimate of $2.5 million for hourly, weekly and venue operating costs in the Thames-Coromandel District, covering venue reimbursements and club expenses. Table 6: Limits on class 4 gambling venue costs Limit Amount and type of costs In force from

A $0.60 per gambling machine per hour of gambling machine operation in Hourly Operating Costs Dec 2004

B $75 per gambling machine per week for Weekly Operating Costs Dec 2004

C $800 per venue per week for Venue Operating Costs Dec 2004

D 16% of a corporate society’s class 4 profits, ie, turnover minus prizes (for all costs paid in respect of the corporate society’s venues)

Dec 2005

Source: DIA – Extract from New Zealand Gazette, 17/7/2008, No. 114, p. 3027.

Note that the income and employment estimates above are at least partially offset by an opportunity cost to district-wide income and employment due to the diversion of expenditure from other industries. This is discussed further in a subsequent section of this report.

4.3 Benefits 3: Entertainment value for locals The fact that people pay money to gamble rather than some other commodity or service may be seen as proof (by revealed preference) that the entertainment from gambling is considered valuable by those who participate. Electronic monitoring results show that the overall personal expenditure on all forms of gambling in the Thames-Coromandel District is around $8 million per year from off-peak activity. Therefore, by revealed preference, the entertainment value of non-casino gambling machines for Thames-Coromandel District residents is worth at least $8 million per year. Note that this assessment assumes that gambling is a rational behaviour in an economic sense, ie, that all gamblers including problem gamblers value the gambling activity more than the money they are spending and hence their net utility is being optimised. This economic rationality assumption is questionable with regard to problem gamblers who contribute a disproportionate amount of the expenditure.

4.4 Benefits 4: Tourism benefits Council could consider that class 4 gambling venues are an added tourism attraction. However, analysis of electronically monitored gambling expenditure suggests that seasonal visitor activity contributes less than $900,000 per annum compared to an estimated $8 million net expenditure per annum by local residents. Class 4 gambling is unlikely to be seen as a major tourism attraction for the District and it is likely that only a minority of visitors might be dissuaded from travelling to the Thames-Coromandel if pokie machines were not accessible.

4.5 Costs 1: Diversion of income and employment An economic impact study by La Trobe University in Victoria, Australia (Pinge 2000) suggested there were large leakages of regional output, income and employment from the electronic gambling machine industry. This was because the regional linkages or multiplier effects for gambling were low relative to other industries and there was a low level of labour intensity compared to other industries (ie, few employees needed). Similar conclusions were reached


12

by the Australian Productivity Commission following an extensive 1999 review of Australia’s gambling industries. Pinge (2008) subsequently estimated that in Bendigo (current population around 83,000) the opportunity cost of gambling in 2008 amounted to $20.5 million in lost output annually and a net loss of 207 jobs. Until recently there was no robust analysis of this type available in New Zealand. Assuming the 2000 Bendigo results could be directly applied to Thames-Coromandel District’s population and characteristics, the offsetting opportunity loss from class 4 gambling could be of a similar scale to the employment and income benefits estimated in this report. Recent evidence in support of Pinge’s argument has begun to emerge in New Zealand. For example, a 2009 economic analysis for Christchurch suggested that the economic impacts of class 4 gambling are largely offset through lost output, employment and household income (cited in Christchurch City Council 2012). Similarly, Auckland Council (2012a) estimated that, once opportunity costs are accounted for, the valued added to the economy is only around 2.3% of total gambling machine proceeds and would be negative if the social dividend associated with community fundraising was removed. Figure 4: Economic impact assessment of class 4 gambling in Auckland

Source: Auckland Council (2012a)

Note that the issue of opportunity costs from the gambling industry is contentious. The Community Gaming Association and other industry stakeholders have previously submitted that any argument comparing the Bendigo research with New Zealand’s gambling environment is misleading. By the same logic, Council should be cautious in any comparison of Auckland and Christchurch research results with the Thames-Coromandel District. Research findings by the DIA described later in this report suggest that more than 80% of class 4 venue staff earn over $25 per hour, including 44% who earn over $35 per hour. Hence, it may be that operating a gambling venue in New Zealand is more lucrative than researchers have previously ascribed to this activity. It is unclear whether or not this was adequately factored into the Christchurch and Auckland studies. Further local research may help provide insight into these issues.


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4.6 Costs 2: Private and social costs of problem gambling Losses from class 4 gambling are not borne evenly across the community. A disproportionate amount of losses are borne by a minority of gamblers. There is evidence that the intermittent gratification from gambling machines, including visual and auditory feedback, is more addictive than other forms of gambling. While the costs of problem gambling are private they also have a social dimension. Problem gambling is characterised by symptoms such as loss of control over one’s gambling, preoccupation with gambling and lying to people to conceal the extent of gambling. Feelings of anxiety, depression, guilt, lack of control and even attempted suicide have been noted by problem gambling agencies when dealing with clients. Possible causal pathways for problem gambling are illustrated below. Figure 5: Causal pathways and problem gambling

Source: Australian Productivity Commission, 1999, p 7.4

Findings from various waves of the New Zealand Health Survey (eg, Ministry of Health 2012) show that: Problem gambling is correlated with both potentially hazardous drinking behaviour and

daily cigarette smoking. Problem gamblers have significantly worse self-rated health status than the rest of the

population, especially for mental health, general health and vitality (measured according to the SF-36 short-form general health questionnaire). In particular, problem gamblers are more likely to be nervous, less happy, less productive, feeling worn out or tired, and in poorer general health. Note that these correlations do not necessarily imply causation.


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There is evidence that prevalence rates of problem gambling between different demographic groups, with research indicating higher levels of gambling expenditure by Māori, people without formal educational qualifications and people with lower status occupations (eg, SHORE 2008). Results of various waves of New Zealand Health Survey gambling screen indicate that 0.3% to 1.5% of population aged 15 years may be problem gamblers. There was no significant change in the prevalence of problem gambling between 2006/07 and 2011/12. The latest survey suggests that 3.1% of the adult population are at risk of problem gambling (including low-risk gambling 1.8%, moderate-risk gambling 1.0% and current problem gambling 0.3%). This would translate conservatively to at least 600 people residing in the Thames-Coromandel District who are at risk of problem gambling. Research undertaken by the Centre for Social and Health Outcomes Research and Evaluation (SHORE 2008) found that approximately 3% of the adult population were ‘heavy gamblers’ (defined as spending more than 3 hours per week and/or at least 5% of their income on gambling). Of these, approximately 50% of males and 75% of females reported pokie machines as their primary mode of gambling. This would indicate that approximately 2% of the adult population use pokie machines for ‘heavy gambling’, although this definition is not necessarily the same as that for problem gambling or pathological gambling. Other studies have reported higher or lower problem gambling rates. Pinge (2008) adopts a rate of 3.36% based on Victorian state-wide surveys. Several alternative prevalence rates estimates are cited in Thorne et al (2012). In summary, prevalence rate estimates for problem gambling appear to be highly contingent on survey methodologies and definitions, and are inherently difficult to measure due to secrecy and non-reporting levels of problem gamblers. Figure 6: Estimated prevalence of gambling risk in the population

No gambling, 47.9%

Recreational

gambling, 49.0%

Low-risk gambling,

1.8%

Moderate risk

gambling, 1.0%

Problem gambling,

0.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

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100%

1

Source: APR Consultants using prevalence rates from the New Zealand Health Survey 2011/12

Research also suggests that five to seven other people can also be affected by the behaviour of a single problem gambler (eg, Adams et al 2004, p 40; Ministry of Health 2012, p 9). Submissions to various local authorities in 2013 by the Community Gaming Association (eg, Auckland City and Matamata-Piako District) state that: ‘97% of the population … gamble in a responsible manner’. This implied estimate of 3% of the population gambling irresponsibly is not inconsistent with estimated rates of people at risk of problem gambling. This would equate to more than 600 Thames-Coromandel District residents being classified as irresponsible gamblers.


15

Findings from the Zealand Health Survey 2011/12 by the Ministry of Health indicated that:

The majority of gamblers were recreational gamblers; only a small proportion of gamblers were at risk from their gambling.

A decline in the proportion of the population who had gambled in the past year was primarily due to a reduction in recreational and low-risk gambling. By contrast there was no change in rates of participation by people with moderate or high risk of gambling problems.

The survey findings could underestimate actual problem gambling rates. Face-to-face data collection, as used in the NZHS, may underestimate the prevalence of problem gambling in the community.

Not all problem gamblers will incur serious costs beyond their personal gambling losses, but a minority may be associated with domestic violence, alcohol abuse, theft, bankruptcy, poor employment performance and/or poor mental health. Potential social costs and causal pathways of problem gambling are illustrated below. Figure 7: Potential private and social costs of problem gambling

Source: Australian Productivity Commission, 1999, p 7.3

A recent study by the Ministry of Health (2013b) identified that the most common issues experienced by gamblers and affected other include family or relationship issues (37%), mental or physical health and emotional issues (37%), financial issues (22%), alcoholism (15%) and work issues or unemployment (15%). Many problem gamblers present with a combination of issues including depression and risky alcohol behaviour.


16

Figure 8: Issues experienced by problem gamblers in New Zealand

Source: Ministry of Health (2013b, p 200)

In November 2006, the Gambling and Addictions Research Centre at Auckland University of Technology, in collaboration with the Centre for Gambling Studies at the University of Auckland, was commissioned by the Ministry of Health to conduct the research project ‘Problem gambling – Formative investigation of the links between gambling (including problem gambling) and crime in New Zealand’. The purpose of this project was to develop a better understanding of the nature of the links between gambling and crime, with particular reference to unreported crime and the nature of the resulting harms experienced by individuals, families/whanau and communities. Key results (Bellringer et al 2009) include the following:

Gamblers and significant others believe that a relationship exists between gambling and crime. The relationship is complex and may be two-way.

Sometimes crimes are committed to gamble/pay gambling-related debts (ie, gambling causes the crime). In other cases, crimes are the cause for gambling, or study participants gambled instead of committing a crime.

There may be two types of crime-committing gamblers: some commence criminal behaviour before becoming problem gamblers in the course of their criminal careers; others are gamblers who engage in crimes, mainly to support their gambling.

There is substantial unreported crime, a large proportion of which is likely to be related to gambling.

There is a large range of crimes committed in relation to gambling, and not just financial crimes. Thus there may be significant economic and social costs associated with gambling due to unreported crime committed by gamblers that has not previously been considered in economic and social impact analyses of gambling.

Gamblers appear to recognise the extent of the harmful impacts that their gambling and offending has on others.

Limitations – the study was a pilot with a small self-selected/convenience sample of participants (33 gamblers, seven significant others) so findings cannot be generalised and should be treated with caution.

Additional research has been undertaken by the Centre for Social and Health Outcomes Research and Evaluation (SHORE) with regard to ‘Assessment of the Social Impacts of Gambling in New Zealand’ (January 2008). The main objective of this national survey of more than 7,000 people was to provide quantitative measures of the impacts of gambling from a representative sample of New Zealanders aged 15 to 80 years. The survey sought to assess


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the negative and positive impacts experienced by the gambler and significant others such as family and friends. The results showed that people with higher relative gambling losses had worse physical health, worse mental well-being, poorer relationships with family/friends, poorer feelings about self, poorer overall quality of life, lower overall satisfaction with life, poorer material standard of living, poorer study/training performances and were less likely to be employed. In terms of modes of gambling, the 2007/08 SHORE survey results showed that different ethnic groups experienced different impacts to some degree, but the time spent playing electronic gambling machines in bars showed up as having an impact with all ethnic groups and in relation to many domains of life. The results also suggested that class 4 gambling activity was associated to some degree with criminal behaviour. In addition it provided evidence that close family members of heavy gamblers were significantly impacted by their family members’ gambling. Regarding the social costs of gambling in New Zealand, overall the study estimated that 2.4% of the population may have had an inferior state of mental wellbeing as a result of gambling and about 10,000 New Zealanders committed illegal activities in the prior year because of gambling. The main social costs came from those who used pokie machines and those who had heavy gamblers in their lives. More specific key results from the SHORE study are listed in Appendix 5.

4.7 Costs 3: Regressive tax effect Whilst approximately $3 million per annum is collected in taxes and duties each year from class 4 gambling in the Thames-Coromandel District (based on 33% of proceeds), this money would otherwise have been spent differently and incurred taxes anyway. However there is a disproportionate effect on low income households from class 4 gambling due to the low socio-economic profile of many problem gamblers. Hence there is likely to be a marginal net disbenefit associated with taxes collected through class 4 gambling compared to taxes on other activities. Gambling operators also pay a 1.31% problem gambling levy to Government to recover the cost of developing, managing and delivering the national integrated problem gambling strategy. This is a targeted tax to cover social harm prevention planning costs that are specific to the class 4 gambling industry.


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5.0 OTHER CONSIDERATIONS The following additional considerations are presented in no particular order.

5.1 Community gambling risk profile The Ministry of Health (MOH, 2013a) commissioned a gambling resource for local government as part of its gambling harm minimisation activities. This includes a community gambling risk profile tool which enables districts to construct a nationally standardised profile by considering five identified categories of gambling risk. Knowing how these risk factors compare with national averages may provide additional context for Council’s decision making. Textbox: Ministry of Health community gambling risk profile tool

Source: Ministry of Health (2013a)

Risk factor 1: District prevalence rate of people ‘at risk’ of being problem gamblers This measure combines local intervention statistics with national gambling statistics to indicate the prevalence of gambling in the district. The number of people who presented as intervention clients to problem gambling services is shown below from MOH data. This illustrates that: The annual number of clients presenting at problem gambling services nationally has

increased from 3,243 in 2004/05 to 11,847 in 2011/12; and In any given year, between 4 and 61 people from the Thames Coromandel District are

problem gambling service clients. Due to the high level of annual variability in the Thames-Coromandel figures, and also taking into account the national increase over the past decade, this report takes a compromise approach by calculating intervention clients as a five-year average of historical data for Thames-Coromandel.


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Figure 9: Problem gambling clients per annum – Thames-Coromandel and national

0

10

20

30

40

50

60

70

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

Th

am

es-C

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man

del clien

ts

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

New

Zeala

nd

clien

ts

Thames-Coromandel New Zealand

Source: Ministry of Health intervention client data.

The national rate of seeking help in New Zealand is 9.3% (based on results of the New Zealand Health Survey. This suggests that more than 90% of problem gamblers in New Zealand do not present as clients of problem gambling services. To develop a prevalence rate, the number of intervention clients is divided by 9.3% and the result is divided by the District adult population. This gives a risk prevalence figure of 1.0% for the Thames-Coromandel. According to the MOH tool, a prevalence risk level of 1.1% or higher indicates a high risk. This risk factor receives a weighting of two in the overall risk profile. Risk factor 2: Gambling density Gambling density is estimated using two components; the number of class 4 machines per person and expenditure per person. According to MOH (2013a), gambling density is a measure of the opportunities to gamble: ‘As a general rule, the more opportunities there are to gamble, when combined with other risk factors, such as deprivation, the more at-risk the community is of experiencing gambling related harm’ (p 36). DIA records show there were 270 gambling machines in the Thames-Coromandel District as at December 2013. Quarterly DIA expenditure records show $8.9 million of gambling machine proceeds in Thames-Coromandel for the year to September 2013, however for the purpose of this report $0.9 million of this is attributed to visitors to the district and therefore excluded from this local community risk profile. For population estimates, we have used latest available 2013 Census data to estimate the number of adults (population aged 18 and over). According to the MOH profile tool, a high community gambling risk profile is associated with 151 or more machines per 10,000 people and/or $601 or more annual expenditure per person. On this basis, Thames-Coromandel is a medium risk area for gambling density. Table 7: Gambling density – Thames-Coromandel and national


Machines per 10,000 people 127 54

Expenditure per person $377 $256 Source: DIA records and Statistics New Zealand Census 2013 statistics

The risk rating for this item is calculated by summing the risk scores for each of the two gambling density components.


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Risk factor 3: District ethnicity According to a range of research studies, Māori and Pacific populations are more likely to experience gambling related harm. Hence, districts with higher than average proportions of Māori and Pacific residents may be at risk of greater social harm. The relevant ethnic profile for Thames-Coromandel is shown below. The District has a similar proportion of Māori residents to the national average and a lesser proportion of Pacific residents. Table 8: District ethnicity profile


Māori % 16.6% 14.9%

Pacific % 1.6% 7.4% Source: Statistics New Zealand Census 2013 Note Denominator is ‘total people stated’ (excludes non-responses)

An overall risk rating for this item is calculated by summing the risk scores for each of the two ethnicity components. Risk factor 4: Community deprivation Community deprivation can be measured using the New Zealand Deprivation 2006 Index (NZDep2006) which is calculated from nine Census items reflecting an absence of social and economic means (eg, unemployment rate, low income households). A score of 1-3 on the NZDep index indicates low deprivation while scores of 8-10 represents the 30% of most deprived communities in New Zealand. Research suggests that communities with higher rates of deprivation are more likely to experience gambling harm. The average NZDep2006 score for the Thames-Coromandel District is six, giving it an overall risk rating of ‘medium’. However, it should be noted that this average hides considerable diversity with the District (refer table below). The level of gambling risk in the District depends partially on the location of gambling machines and venues in relation to higher deprivation communities. Table 9: NZDep2006 deprivation index scores

Census Area Unit NZDep2006

Whitianga 7

Coromandel 7

Te Rerenga 7

Whangamata 7

Tairua 6

Moanataiari 8

Parawai 7

Pauanui Beach 4

Hikuai 6

Te Puru-Thornton Bay 6

Thames-Coromandel average 6 Source: NZDep2006 tables (refer MOH, 2013a)


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Risk factor 5: Service availability This factor relates to the availability of intervention services in the Thames-Coromandel District that specialise in preventing and minimising gambling harm. Information about problem gambling services is sourced from the Ministry of Health. The MOH profile suggests that anything less than three services per 10,000 people is considered high risk. The MOH website does not list any specific problem gambling help services in the Thames-Coromandel District. However, Oasis public health and intervention service centres are located in Hamilton, Tauranga and Auckland, and residents nationwide can seek help at any time using the Gambling Helpline 0800 654 655 or text 8006. Other helplines and services are listed at: www.health.govt.nz/your-health/healthy-living/addictions/harmful-gambling/find-service-near-you. For the purpose of this assessment, Thames-Coromandel’s service availability risk rating has been scored as medium. Community gambling risk profile Based on the MOH risk profiling tool, the Thames-Coromandel is estimated to have a ‘medium risk’ community gambling risk profile. Table 10:

Risk factors Scores

Risk 1: District prevalence risk score 4

Risk 2: District gambling density risk score 4

Risk 3: District ethnicity risk score 3

Risk 4: Community deprivation risk score 2

Risk 5: Availability of help services risk score 2

Total risk score 15 Source: Compiled by APR Consultants using MOH (2013) risk profile tool

Figure 10: MOH interpretation of risk factors and guidance on policy options

Source: Ministry of Health (2013a)

http://www.health.govt.nz/your-health/healthy-living/addictions/harmful-gambling/find-service-near-you

http://www.health.govt.nz/your-health/healthy-living/addictions/harmful-gambling/find-service-near-you


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5.2 Location and access Under the Gambling Act, territorial authorities may restrict where new class 4 gambling venues can be located. Although research is inconclusive, there is overseas evidence of a positive correlation between greater accessibility of gambling machines and greater prevalence of problem gambling. Aspects of accessibility that affect problem gambling risk include opening hours, conditions of entry, ease of use (gambling machines require no skill), marginal outlay and how comfortable people feel attending a particular venue. Convenience is also important, as people who would not travel to a casino may prefer to access machines located at a local shopping centre. Research by the Ministry of Health (2008, p x) identified that people living closer to gambling venues were significantly more likely to have gambled at a class 4 venue in the last year and more likely to be problem gamblers. The figure below summarises accessibility issues associated with gambling machines. Existing legislation and regulations aim to mitigate many of these accessibility issues. Figure 11: Accessibility issues

Source: Australian Productivity Commission, 1999, p 8.4.

5.3 Gambling machine density Due to the cost profile of class 4 gambling venues, smaller venues are less viable. In the Thames-Coromandel District, even with the loss of large venues such as the Brian Boru Hotel and Goldmine gaming lounge, the demise of smaller venues is reflected in an increasing average number of machines per venue from 10.2 in September 2003 to 11.7 in December 2013. Of the 34 venues in September 2003, nine venues had the maximum permissible 18 machines. Of the 23 venues today, eight have 18 machines (including the Palms Tavern in Whangamata which was granted Council consent in 2006 to increase from 16 to 18). There may also be aspects of the demand profile for class 4 gambling which contribute to the greater success of larger venues. An increased level of gambling activity may provide greater entertainment value and atmosphere, resulting in supply-induced demand and hence a virtuous circle of increasing activity. However, this very aspect may also contribute to problem gambling


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behaviour. This hypothesis of a causal link between higher gambling activity and problem gambling would be in accordance with MOH (2013a, p 36): ‘As a general rule, the more opportunities there are to gamble … the more at-risk the community is of experiencing gambling related harm’. Recent evidence from the DIA (2013) showed that the level of gaming machine proceeds per hour (a reliable measure of pokie machine activity) was $10.11 for venues with 18 machines and $6.62 for venues with eight or less machines. This confirms the common observation that larger gambling venues have disproportionately greater levels of gambling activity than smaller venues but does not demonstrate a causal connection to increased levels of problem gambling.

5.4 Gambling in high deprivation communities Research has indicated that people with higher levels of participation in gambling activities are more likely to associated with a lower socio-economic status (eg, SHORE 2008). While this profile does not generalise across the broad characteristics of all gamblers, it does appear to match the characteristics of many problem gamblers. It has been the case in New Zealand that class 4 venues have tended to be geographically clustered adjacent to lower socio-economic suburbs. Recent research by the Ministry of Health (2013b) compared class 4 expenditure data with the NZDep index of deprivation across New Zealand. This revealed (p 18) that: The number of gambling machines were 10,000 adults is slightly over three times higher

in low socio-economic communities compared to high socio-economic communities; The number of class 4 gambling venues per 10,000 adults is slightly under three times

higher in low socio-economic communities compared to high socio-economic communities; and

Expenditure per person is more than three times higher in low socio-economic communities compared to high socio-economic communities.

Table 11: Gambling accessibility in low, medium and high socio-economic communities

Source: Ministry of Health (2013b, p 58)


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5.5 Risks and opportunities associated with funding sports through gambling machines

The topic of fundraising to support sports was the focus of a speech by the Deputy Secretary of Internal Affairs (Manch 2008) to a Sport and Recreation New Zealand (SPARC) Conference in June 2008. Key points from the speech include the following:

Money from gambling is an important source of funding for sport. However, the Gambling Act requires separation between gambling trusts, gambling machine venues and grant recipients. It also requires the application and distribution of grants to be transparent.

Risky actions include:

Inappropriate use of gambling funding for individual sports professionals and professional club expenses.

Arrangements between sports organisations and venue operators (pubs) that are designed to guarantee funding to the sporting organisations from the trusts whose machines are operated at the venue. Some of these can be quite sophisticated arrangements that might, in tax terms, be regarded as avoidance – and therefore against the spirit of the Act.

Sporting groups conferring naming rights or other benefits on gambling machine societies in return for grants.

Another development the DIA has been watching closely in recent years is the creation of gambling machine societies with close associations to particular sporting codes or sporting franchises. These are often referred to as end user trusts. Such trusts tend to narrow the breadth of grant-making in an overall sense.

5.6 Stakeholder consultation requirements With regard to stakeholder consultation, section 102 of the Gambling Act 2003 states that: (1) A policy on class 4 venues under section 101 must be adopted in accordance with the special consultative procedure in section 83 of the Local Government Act 2002 and, for the purpose of subsection (1)(e) of that section, the territorial authority must give notice of the proposed policy, in a manner that the territorial authority considers appropriate, to:

(a) Each society that holds a class 4 venue licence for a venue in the territorial authority district; and

(b) Organisations representing Māori in the territorial authority district. Similarly, section 65E of the Racing Act 2003 requires that: (1) A policy on Board venues under section 65D must be adopted in accordance with the special consultative procedure in section 83 of the Local Government Act 2002 and, for the purpose of subsection (1)(e) of that section, the territorial authority must give notice of the proposed policy, in a manner that the territorial authority considers appropriate to—

(a) the Board; and (b) organisations representing Māori in the territorial authority district.


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There are a range of views and vested interests in relation to class 4 gambling and TAB gambling in the Thames-Coromandel District. Stakeholders in support of existing gambling activities and/or associated community funding are likely to include: Societies that own gambling machines located in the District. Chartered clubs, hotels and taverns with gambling machines. Lobby groups representing the class 4 gambling industry (eg, Community Gaming

Association). Associations representing clubs and hospitality providers. Sports groups that benefit from funding. Not-for-profit and other community based organisations that benefit from funding. Local stakeholders that are generally against gambling and/or in favour of mitigating its harmful effects are likely to include: Iwi/Māori, Pacific Islands and Asian community organisations. Health organisations, including mental health groups. Other social service providers and community groups (eg, budget advisory services). Churches and youth groups. Previous research and consultation summarised below provides some insight into community and stakeholder perceptions of class 4 gambling in the Thames-Coromandel District. Council’s elected members may choose whether or not to take this into consideration when reviewing Thames-Coromandel District’s policy. Under the Local Government Act 2002, Council must receive all submissions on its revised Draft Policy with an open mind and give them due consideration.

5.7 Results of prior consultation An advantage that Council has in this review process is that it has already been through prior consultation processes. The results of this prior consultation are summarised below. 2004 policy adoption A total of 16 submissions were received in relation to Council’s 2004 Statement of Proposal, of which nine indicated they wished to speak in support of their submissions. The Statement of Proposal was based around a draft policy which was brief and concerned itself only with mandatory matters in the legislation. Council’s favoured policy was broadly laissez-faire. Submitters broadly in favour of greater regulation and reduced social harm included:

Concerned individual residents

Child Poverty Action Group

Hauraki Strengthening Families

Problem Gambling Foundation of New Zealand

Te Korowai Hauora O Hauraki

Waikato District Health Board Submitters in favour of a less regulated approach included:

Clubs New Zealand Inc

Hospitality Association of New Zealand (HANZ)

Mercury Bay Club

New Zealand Community Trust

New Zealand Racing Board


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Scottwood Group

Thames Coast Bowling Club Inc

The Punters Sports Café On 25 February 2004, having heard and considered all submissions, Council requested its staff to present a further report for Council’s consideration on 12 March 2004, incorporating amendments to the proposed laissez-faire approach to reflect the following guidelines:

There was insufficient data and information available to justify restrictions on the number of venues or the number of gaming machines already in the district or permitted by law;

There was a need to not allow an unfettered increase in numbers;

A formula based on dwellings would be more realistic for the district than one based on normally resident population;

Applicants should produce Host Responsibility policies and procedures;

A social impact report on the effects of gambling in the district was desirable but cannot be conducted or funded solely by the Council.

The 2004 policy reflected Council’s opinion that combination of the laissez faire and capped policy stance would be appropriate. The main points of the policy were:

Acknowledgement of the need for a cap on the total numbers of gaming machines in the Thames-Coromandel District.

Recognition that resident population is not a meaningful statistic to use for this District given the high number of non-resident home owners who nevertheless spend significant time in the District and recognition also of the very high visitor population during holiday periods. The numbers of gaming machines will therefore be restricted to one machine per sixty residences at any time measured over the District.

No gaming machines will be allowed at any free standing TAB operated by the New Zealand Racing Board in order to encourage other licensees to donate back into the Thames-Coromandel District.

Acknowledgement that a social impact report on problem gambling in the District should be undertaken before the next review, but that all parties need to be involved in such a report and the funding thereof.

2004-2006 venue consents Subsequent to the adoption of Council’s 2004 policy and prior to its 2007-08 review:

Punters Bar and Grill in Tairua was granted consent by Council on 18 August 2004 to increase its number of machines from 6 to 9.

Thames Coast Bowling Club was granted consent on 16 June 2005 to increase from 3 to 6 machines.

The Sand Bar in Whitianga received consent on 26 June 2006 to become a new gambling venue with 9 machines.

The Star & Garter Hotel in Coromandel received consent in 2006 to become a new gambling venue with 9 machines.

The Palms Tavern in Whangamata was granted consent on 21 December 2006 to increase from 16 to 18 machines.


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2008 policy review Submission hearings as part of the 2008 gambling policy review were undertaken in March 2008. A list of verbal submitters and their key points is summarised in Appendix 6. In short, the 2008 verbal hearings were dominated by health and social services advocates in support of a sinking lid or similar policy. Submitters that were in favour of regulation and reduced social harm included:

Concerned individual residents

Coromandel Colville Community Board

Coromandel Residents and Ratepayers

Ebenezer Community Trust

Gambling Watch

Hauraki Family Violence Intervention Network

Hauraki Health Link

Problem Gambling Foundation of New Zealand

Te Korowai Hauora o Hauraki Submitters in favour of less regulation included:

Charity Gaming Association

Mercury Bay Club

New Zealand Racing Board

Pub Charity

Smittys Bar and Grill

The Lion Foundation 2011 policy review Council reviewed its gambling policy in February 2011. The 2011 review determined that Council did not wish to amend or replace the existing policy. A decision was made to continue the sinking lid policy. Council also identified that a study is to be carried out in order to asses the social impact of gambling in the Thames-Coromandel District.

5.8 Community Gaming Association key points The Community Gaming Association (CGA) makes submissions to many territorial authorities when they review their gambling venue policies, to ensure a strong voice for its constituency of community and regionally based organisations that operate gaming machines. Key points raised by CGA generally include: That there is a great deal of emotive and ill informed commentary regarding the impact

of electronic gambling machines. CGA contends there is far more good achieved within communities by fundraising from

electronic gambling machines as opposed to the very small percentage of population that have an issue with their operation.

CGA is opposed to sinking lid policies because these directly result in a reduction of funding for community organisations that rely on the proceeds from class 4 gambling for fundraising.

CGA contends there is no solid evidence that sinking lid policies deliver measurable outcomes for the community or individuals or lower harm minimisation issues.

Expenditure monitoring indicates that players are migrating to other forms of gambling as sinking lid policies are instituted, which means they are moving away from charitable gambling to gambling that provides no community benefit such as Internet gambling.

CGA submits that: ‘When viewed as the whole [sic], survey results confirm that there is no direct correlation between gaming machine numbers and addictive gambling rates.’


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5.9 Venue costs and viability In 2008 the DIA limited venue costs for non-club venues via Gazette Notice in accordance with section 116 of the Gambling Act. This set out four limits on the actual, reasonable and necessary costs that societies can legally incur at class 4 venues:

Limit A covers hourly operating costs, and is determined by: hours of gaming machine operation x number of gaming machines x $0.60

Limit B covers weekly operating costs, and is determined by: number of gaming machines x $75

Limit C covers venue operating costs, and is set at a maximum of $800 for all venues

Limit D is an overarching limit on venue costs paid at a society level, and is determined by: 16% of society gaming machine proceeds (excluding GST).

Recent moves to standardised cost schedules since 2009/10 are leading to a better understanding of what constitutes necessary and reasonable venue costs for the purpose of compliance with the legislation. A 2013 research report by the DIA provides timely information on cost and viability pressures by class 4 venues (refer ‘Venue Costs Resubmission: Final Report’, September 2013). The DIA research found that:

Limit A maxima may be a real constraint for some venues, especially where wage costs are high. This is likely to be particularly noticeable for venues in rural areas with a small number of gaming machines and low gaming machine proceeds (GMP).

Rents and associated insurance and security costs may be a factor contributing to some venues exceeding their Limit B maxima. This is likely to be particularly noticeable with venues in main urban areas.

Limit C is not generally problematic. Only a small proportion of venues in main urban areas with both high GMP (but not the highest GMP) and high labour costs are affected by this limit.

Labour costs and management fees were identified as representing major pressure points for those venues that are in excess of the prescribed limits. Limit D was estimated using two proxy calculations (claimed costs and maximum payable costs), as the data collected did not include any information about Limit D. As both the claimed costs and maximum payable costs exceed 16% of GMP in many venues, ‘societies must now be constrained in the degree to which they can fully reimburse many venues to the level of maximum payable costs’. As part of its 2013 Venue Costs Resubmission report, the DIA noted that a number of societies were slow to provide schedules or produce evidence to support claims when asked for further evidence, or simply did not submit schedules within the suggested timeframes. ‘The most troublesome issue encountered was the frequent and repeated failure on the part of societies to engage with inspectors when asked to explain claims where costs were well outside the provided benchmarks’ (DIA 2013, p 11). Moreover, the DIA noted: ‘There are concerns that venue payments have historically been used as leverage in inter-society competition for venues, and in particular that high-yielding and strategically important venues have used this competition between societies to increase their weekly venue payments. The resubmission exercise has confirmed that both larger and smaller societies still appear to be subject to competitive commercial pressures in order to retain and/or grow their pool of venues, but increased scrutiny from resubmission has dampened these pressures, at least to some extent.’


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Of interest for the purpose of Council’s gambling venue policy review is the DIA analysis of gambling machine proceeds with regard to venue location and scale, which indicate that:

The location of a venue was found to have a large effect on GMP yield and operating costs incurred. For the 60% of ‘main urban’ venues in the dataset, GMP was $10.09 per machine per hour compared to $7.65 for ‘other urban’ and $5.71 for the 18% of rural venues.

For the 50% of venues with the maximum 18 machines, GMP was $10.11 per machine per hour. This reduced to an average of $8.11 for venues with 9-17 machines and $6.62 for venues with eight or less machines.

5.10 Nearby districts – policy comparison The table below shows a comparison of Thames-Coromandel District’s current policy compared with neighbouring territorial authority areas. The purpose of presenting this information is to provide additional context to Thames-Coromandel District Council’s policy. Many territorial authorities throughout New Zealand reviewed their policies during 2012 and 2013. The table indicates that neighbouring areas have caps on the number of machines permitted in their jurisdiction, in most cases below current rates to create an interim sinking lid effect through attrition. Table 12: Class 4 gambling venue policies of neighbouring territorial authorities Territorial authority

Policy on new venues

Policy on location of new venues Policy on machines

Thames-Coromandel District (2011)

No new venues (sinking lid)

No new venues. No increase in machines per venue.

Hauraki District (2011)

Cap on total venues (as per 9 current venues)

Any new venue must not be located in premises that are incompatible with other permitted uses, not be located within sight of educational facilities and not allow any gambling activity to be visible to passing pedestrian traffic.

Sinking lid policy for total number of machines (cap of 79 compared to current 119, to be achieved through natural attrition).

Waikato District (2009)

No cap on venue numbers, but limited by cap on ratio of machines to adult population (below current ratio)

Venue must not be primarily a family restaurant and must meet location and other conditions.

Time-limited cap on new machines (now lapsed). Total number of machines in the District will generally be restricted to a ratio of machines to adult population of 1:200 (currently 1:241).

Matamata-Piako District (2013)

No cap on venue numbers, but limited by cap on ratio of machines to adult population

Applicant must reliably demonstrate they are likely to have minimal negative impact on the surrounding community. Operators relocating to a site not already listed on a class 4 gaming license would need to make an application as an operator seeking a new venue consent.

Cap based on a ratio of machines to adult population.

Western Bay of Plenty District (2013)

No cap on venue numbers, but limited by cap on total machine numbers

Venues are not permitted where Council believes that the amenity of the area will be adversely affected or there is likely to be an adverse effect on any sensitive site. Council permits the relocation of class 4 gambling venues subject to meeting the location requirements above.

Cap of 191 machines (178 currently).

Source: Information predominantly sourced via Council websites, accessed 27 January 2014.

Other features of interest from neighbouring councils’ policies that are relevant to the current review are paraphrased and commented on below. Note that some aspects of these local body policies are moot as they are subordinate to national legislation and regulations; for example, the Secretary’s power to suspend or cancel the licenses of venues whose dominant purpose is class 4 gambling rather than the primary activity stated on their class 4 venue license.


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Hauraki District:

Hauraki District Council has a six page policy including cover page.

Scheduled to be updated in 2014.

Subject to an existing venue losing its license, any new class 4 venue applicant must not be associated primarily with family or children’s activities, or a venue that promotes their premises predominantly for family dining or family activities.

Subject to an existing venue losing its license, any new class 4 venue applicant must not operate as a brothel.

The predominant activity of any class 4 gambling venue shall be hospitality related (food and liquor).

Should two or more clubs with existing class 4 gambling venue licenses merge then Council will give consideration to the maximum number of machines at the merged venue being up to the lesser of: (i) the number of merging venues multiplied by nine; or (ii) the total of the machine numbers in the merging venues prior to the merger; or (iii) 18 machines.

Hauraki District Council’s policy includes the facilitation of a triennial ‘social impact forum’ facilitated by Council to help assess the social impact of gambling in the District. Specific stakeholder groups for this forum are listed in the policy.

Waikato District:

Waikato District Council’s 2009 Gambling Venue Policy is a concise two pages and reflects a good practice approach.

The 2009 policy states that: ‘The total number of electronic gaming machines in the district will generally be restricted to a ratio of machines to adult population of 1:200’. The exact ratio is not disclosed in the policy document: however, our calculations indicate a total adult population of 45,600 compared to 189 pokie machines (ie, current ratio of 1:241).

Applications seeking Ministerial discretion pursuant to Section 95 of the Gambling Act to increase the number of gaming machines at a club venue to greater than nine, as a result of clubs merging, may be approved at Council’s discretion.

Council commenced a policy review in 2013 which is yet to be completed. Council is seeking to develop adopt a single policy to replace two existing policies covering the Waikato and former Franklin districts. In July 2013, residents were canvassed for their views in surveys as part of Council’s development of a Local Alcohol Policy (LAP) and review of the gambling policies.

The former Franklin District’s relatively liberal policy was tested in the latter half of 2013 by an application for venue consent by the New Zealand Community Trust acting for the Scoundrel & Seadogs Bar & Grill in Tuakau. The application was potentially non-compliant due to (a) being located in the immediate vicinity of a sensitive site (23m in a straight line from a childcare centre), and (b) the premises catering for family dining. However, Council’s Regulatory Sub-Committee used its discretion to grant the consent due to ambiguities in the wording of the straight line distance clause, the effects on the childcare facility being minimal, and because the proposed pokie machines would be in a separate room in the bar area not visible from the family dining area. The venue may now operate up to nine pokie machines. This is in addition to the 18 machines operated by the Tuakau Cosmopolitan Club approximately 30 metres on the other side of the childcare centre.


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Matamata-Piako District:

Council’s 2013 policy is twelve pages long including cover page, contents page and appendix (application process flowchart).

Consideration will not be given to proposed venues such as sports clubs, family restaurants or other venues where families and young people under 18 are likely to be present.

Applicants are required to provide evidence to Council that the character and focus of any proposed venue will have activities other than class 4 gambling as their primary focus. This applies to proposed naming, signage and the location of the machines relative to other activities.

The policy states that: ‘Currently 201 machines are permitted to operate in the District. Consent will not be granted to allow more than 201 machines in the District unless the population grows by the ratios shown in the following table’. More recent DIA figures show a reduction through attrition to 173 machines in December 2013. Similarly, ‘the ratio limits between gambling venues in each town and the town’s population have been calculated to maintain the current density of gambling venues’. Localised ratio calculations in the policy refer to outdated venue, machine and population numbers. Hence, further calculations would be required in order to understand the current implications of these caps at a township level. Council’s policy also treats venues that have lost their license as still being in operation for a period of six months when calculating the ratios, in order to avoid inadvertently exceeding the venue ratio.

Where two or more clubs or societies legally and physically combine their premises onto a site already listed on a class 4 gaming license, and have been individually operating gaming machines for a period of more than one year, then Council will agree to consent for the sum of the number of gaming machines specified in all of the merging clubs’ class 4 venue licences at the time of the application. However, the combined number of machines should not exceed 18 in the case of venues that were not on a license on 17 October 2001 or 30 machines for venues that held a license on 17 October 2001. (Note: Clubs that merge may apply for ministerial approval to operate up to 30 machines at the venue on which they merge, but only if that venue would otherwise be an 18 machine venue (which are limited in number)).

Western Bay of Plenty District:

Western Bay of Plenty District Council has a 5 ½ page policy including two pages of definitions. The policy itself is succinct and reflects a good practice approach.

New class 4 gambling venues (within the cap on gambling machine numbers) will not be permitted where Council believes that the amenity of the area will be adversely affected or where there is likely to be an adverse effect on any community facilities.

Council permits the relocation of existing venues subject to meeting the location requirements above.

The primary activity shall not be gambling or an activity associated with family or children’s activities. Gambling venues are not required to hold a liquor on-licence or club licence: however, they are expected to ensure that there is minimal possibility of people under the age of 18 years gaining access to the venue.


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5.11 Nearby districts – gambling machine trends The table below shows changes in the numbers of gambling venues and machines by neighbouring territorial authorities over the period 2003 to 2013. In summary, Thames-Coromandel District saw a substantial decrease in venue and machine numbers relative to neighbouring authorities during this period but still has a higher ratio of machines per adult population than other districts. Table 13: Nearby districts’ gambling venue and machine numbers, 2003-2013 Territorial authority Policy Change in

number of venues Sept 2003 to Dec

2013

Change in number of

machines Sept 2003 to Dec

2013

Estimated machines per 1000 adults

(2013)

Thames-Coromandel District Sinking lid -11 (-32%) -78 (-22%) 12.3 Hauraki District Cap (below current) -4 (-31%) -41 (-26%) 8.7 Waikato District Cap -3 (-17%) -12 (-6%) 4.1 Matamata-Piako District Cap -3 (-18%) -27 (-14%) 7.4 Western Bay of Plenty District Cap 0 (0%) -13 (-7%) 5.3

Source: Venue and machine numbers are cited from DIA records. Adult population figures are estimated from 2013 Census age range statistics.

With regard to previous iterations of the table above for other parts of New Zealand, the Community Gaming Association noted that gambling machine and venue numbers have been falling as a result of: Changes to the licensing requirements. Increased pressure on venue viability because of requirements on societies to return a

minimum of 37.12% to authorised purposes (ie, a non-performing venue drags down the entire portfolio and puts the collective achievement of 37.12% at risk).

Reduced returns to venue operators as a result of a Gazette Notice limiting venue expense reimbursements.

Costs of investment in new equipment (excessive depreciation values on balance sheets).

Costs of upgrading venues to meet the minimum requirements of electronic monitoring (an average of $54,000 per venue).

Impacts of the Smokefree Environments Act on patronage and therefore revenue. Acknowledged over-supply of machines to venues which could not support them. Tighter enforcement by the Department of Internal Affairs on gambling shops (ie, class

4 gambling must not be the dominant purpose of the venue and the business must not be dependent on class 4 gambling to survive, otherwise it can be penalised).

Gambling industry opinion appears to be that, given the commercial and regulatory environment outlined above, council gambling venue policies have little impact on decisions made by societies and operators about the continuation of existing class 4 venues.


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5.12 Recent legislative reforms Te Ururoa Flavell’s Gambling (Gambling Harm Reduction) Amendment Bill was enacted on 14 September 2013. The original purpose of the Flavell Bill was to provide local communities with more power to determine where pokie machines may be located and how the proceeds are distributed. The main resulting change to the Gambling Act is a minor requirement for councils to consider whether to include a relocation policy in their gambling venue policies. In his third reading, Mr Flavell stated that: ‘The Bill will … enable gambling venues to transfer out of low socio-economic areas and into areas where the community wants them to move. Councils, as a result of my bill, will now have more tools to enable the transfer of gaming venues into other areas, and I am confident that this will enable councils to further reduce gaming venues.’ It is unclear how this minor supply-side change will interact with countervailing demand pressures. The viability of a venue may in fact be challenged if it were to relocate into a higher socio-economic suburb compared to its existing, ‘market-driven’ location decision. Mr Flavell was not successful in making proposed legislative changes to ensure a minimum percentage of proceeds being returned to the area where they were raised, however regulations may subsequently be made for this purpose. Other clauses that were deleted from the Bill prior to enactment included a proposal to make territorial authority responsible for distributing the funds from class 4 gambling; and to extend the effect of councils’ gambling venue policies; and to exclude racing from the definition of authorised purposes. Internal Affairs Minister Chris Tremain announced a package of reforms to class 4 gambling on 19 June 2013. The Minister aims to introduce a simpler, more transparent system for class 4 gambling that provides more money to the community, following on from DIA work with the Flavell Bill. The intention is to introduce further legislation and regulations over time to address issues identified in the class 4 gambling sector, with a focus on improving the transparency of grants to community groups, increasing the amount of funding that goes back to the community and reducing unnecessary compliance costs for class 4 operators. The Minister proposed to lift the minimum rate of return to the community over time.


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6.0 WEIGHING THE EVIDENCE The table below summarises the benefits and costs of class 4 gambling in the Thames-Coromandel District. Council’s challenge is how best to acknowledge the benefits of community funding from gambling machine expenditure, respect the rights of the majority to gain enjoyment from gambling, and also mitigate the private and social costs of gambling. Table 14: Estimated benefits and costs of class 4 gambling in Thames-Coromandel

Item Benefits Costs

Fundraising At least $3.3 million per annum for sports, education, health and other community activities

Community and voluntary organisations focusing on the core purpose of their organisation rather than expending substantial efforts on fundraising

Community and voluntary organisations knowing there is community money available for a range of community projects

Long-term benefits by people enjoying facilities, events and programmes funded through class 4 gambling

Monitoring and compliance costs

Personal, family and social costs associated with more than 600 people at risk of problem gambling within the District population, including stress, depression and crime

Employment and Income Approximately 58 jobs in clubs, hotels and taverns to service class 4 gambling and estimated $2.5 million per annum reimbursement for hourly, weekly and operating costs

Loss of jobs and income from other local industries due to diversion of discretionary spending (ie, opportunity cost)

Entertainment value for locals

Estimated minimum entertainment value of $8 million per annum for locals (based on revealed preference and assuming economic rationality of gamblers)

Note that this value is an adjunct to other benefits (fundraising, employment and taxes)

Approximately $8 million per annum personal expenditure by locals

Tourism benefits Estimated $0.9 million per annum net expenditure on pokies by visitors

Negligible social cost to residents from visiting gamblers

Taxes Approximately $3 million per annum in tax collected, including problem gambling levy

Diversion of up to $3 million per annum in tax from other forms of taxable expenditure

Disproportionate effect on low income households (regressive tax effect)

Source: APR Consultants.


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6.1 Policy options – benefits and costs Section 77(1) of the Local Government Act 2002 (as amended) requires Council to assess its policy options by considering ‘the benefits and costs of each option in terms of the present and future interests of the district’. One way to conceptualise such community interests or desired outcomes is in the form of present and future social, economic, environmental and cultural well-being. A summary of benefits and costs of the five broad policy options for the 2014 review process is shown in the table below. This analysis is based on marginal benefits and costs rather than cumulative effects, and relates only to the impact of the local policy rather than the overall national regulatory environment. In reviewing its policy, Council may also have regard to the cumulative effects of additional opportunities for gambling in the District (refer Section 101(4)(d) of the Gambling Act 2003). Note that the analysis below is based on an assumption that increased/decreased gambling opportunities are correlated with increased/decreased problem gambling rates, which is disputed by some gambling industry stakeholders and advocates (eg, True 2013). Table 15: Assessment of main policy options in terms of marginal impact on social, economic, environmental and cultural well-being Impacts 1. Sinking lid (status quo) 2. Cap 3. No cap

Social Same or reduced level of opportunity for class 4 gambling, likely associated with same or reduced level of community funding and same or reduced number of problem gamblers

Level of opportunity for class 4 gambling depends on whether cap is set above, at or below current level of venues and/or machines

Increased level of opportunity for class 4 gambling, potentially resulting in increased level of community funding and increased number of problem gamblers

Economic Ambiguous net outcome due to possible opportunity cost (diversion of income and jobs from other industries)

Same as status quo Same as status quo

Environmental Negligible impact on natural environment (including noise), urban impact controlled by bylaws and national regulations

Same as status quo Same as status quo

Cultural Same or reduced level of impact on Māori and other communities, same or reduced level of impact on cultural well-being as expressed through TCDC Community Outcomes

Level of impact on Māori and other communities depends on whether cap is set above, at or below current level of venues and/or machines

Increased level of impact on Māori and other communities, and increased level of impact on cultural well-being generally


Table 16: Assessment of relocation policy options in terms of marginal impact on social, economic, environmental and cultural well-being Impacts 4. No relocation (status quo, sinking lid) 5. Allow relocation

Social Same or reduced level of opportunity for class 4 gambling, likely associated with same or reduced level of community funding and same or reduced number of problem gamblers

Similar to status quo

Economic Ambiguous net outcome due to possible opportunity cost (diversion of income and jobs from other industries)

Same as status quo

Environmental Negligible impact on natural environment (including noise), urban impact controlled by bylaws and national regulations

Same as status quo

Cultural Same or reduced level of impact on Māori and other communities, same or reduced level of impact on cultural well-being as expressed through Thames-Coromandel District’s Community Outcomes

Similar to status quo



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6.2 Consideration of community outcomes Section 77(1) of the Local Government Act 2002 also requires Council to assess its policy options by considering ‘the extent to which community outcomes would be promoted or achieved in an integrated and efficient manner by each option’. Community outcomes are the outcomes that Council aims to achieve in meeting the current and future needs of its communities for good-quality local infrastructure, local public services and performance of regulatory functions. Community outcomes or aspirations provide a more localised view of community well-being than the generic four well-beings (social, economic, environmental and cultural). Thames-Coromandel District Council has developed a set of outcomes which set outs what it wants to achieve on behalf of the Coromandel Peninsula. Council is constantly refreshing its outcomes to meet the needs of the communities represented. Table 17: Thames-Coromandel District Council community outcomes

Source: TCDC Annual Plan 2013/14

6.3 Conclusion The Gambling Act requires Council to review its Gambling Venue Policy every three years. In undertaking the review, Council may have regard to the social impact of gambling within the District and any other relevant matters. This report presents information about the positive and negative impacts of class 4 gambling within the Thames-Coromandel District. Due to the difficulty in quantifying positive community outcomes from philanthropic funding, the levels of uncertainty around problem gambling rates and the pervasiveness of both the positive and negative impacts of gambling, this report does not offer any definitive conclusions or recommendations. Ultimately the choice of policy for the Thames-Coromandel District should be determined by community values, taking into account prevailing information and opinions.


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http://www.tcdc.govt.nz/Global/1_Your%20Council/Documents%20including%20Bylaws,%20Policies%20and%20Strategies/Gambling%20Policy%202008.pdf



http://www.tcdc.govt.nz/Your-Council/Funding-Sponsorship-and-Grants/Community-Grants/

http://www.tcdc.govt.nz/Your-Council/Funding-Sponsorship-and-Grants/Community-Grants/

http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/councilpolicies/gamblingvenuepolicies/Documents/socialimpactsliteraturereviewreport20120717.pdf

http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/councilpolicies/gamblingvenuepolicies/Documents/socialimpactsliteraturereviewreport20120717.pdf

http://www.beehive.govt.nz/release/package-reforms-planned-class-4-gambling

http://www.gamblinglaw.co.nz/download/Research/TAInfo.pdf

http://www.waikatodc.govt.nz/CMSFiles/ec/ec985124-9da9-4ebd-bb58-f69731c003cd.pdf






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APPENDIX 1: GAMBLING ACT 2003 – RELEVANT PROVISIONS 98. When territorial authority consent is required— A territorial authority consent is required in the following circumstances: (a) if a society proposes to increase the number of machines that may be operated at a

class 4 venue (whether by way of an application for, or amendment to, a class 4 venue licence, and whether or not in association with an application for ministerial discretion under section 95 or section 96):

(b) unless paragraph (c) or paragraph (d) applies, the first time there is an application for a

class 4 venue licence for a venue for which a class 4 venue licence was not held on 17 October 2001:

(c) if a corporate society applies for a class 4 venue licence and a class 4 venue licence

has not been held by any society for the venue within the last 6 months: (d) on the commencement of this section, in accordance with section 93 for a class 4

venue—

(i) to which section 92 does not apply; and (ii) for which there is a class 4 venue licence granted after 17 October 2001 and

before the commencement of this section. (e) a society proposes, in accordance with a relocation policy of the territorial authority, to

change the venue to which a class 4 venue licence currently applies.5 99. Application for territorial authority consent— (1) An application for a territorial authority consent must be made to the territorial authority

for the district in which the class 4 venue is, or will be, located. (2) The application must be accompanied by the information required by the territorial

authority to enable it to consider the application properly. (3) An application for consent in accordance with a relocation policy may be made only with

the agreement of the venue operator of the existing venue.6

5 Section 98(e): inserted, on 14 September 2013, by section 8 of the Gambling (Gambling Harm

Reduction) Amendment Act 2013 (2013 No 71). 6 Section 99(3): inserted, on 14 September 2013, by section 9 of the Gambling (Gambling Harm

Reduction) Amendment Act 2013 (2013 No 71).


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100. Considering and determining application for territorial authority consent— (1) A territorial authority must— (a) consider an application for a territorial authority consent in accordance with its class 4

venue policy; and (b) then either—

(i) grant a consent with or without a condition specifying the maximum number of gaming machines that may be operated at the venue; or

(ii) not grant a consent.

(2) However, if a corporate society applies for a territorial authority consent for an

amendment to a class 4 venue licence to allow an increase in the number of gaming machines that may be operated at a venue, a territorial authority—

(a) must consider and determine the application in accordance with subsection (1); but (b) may not include a condition specifying a maximum number of machines that may be

operated at the venue that is fewer than the number of machines that may be operated currently at the venue.

(3) The territorial authority must notify the applicant of its determination within 30 working

days after the later of— (a) the date of receipt of the application; or (b) the date that it adopts a class 4 venue policy. (4) A territorial authority must not consider an application for a territorial authority consent

before it has a class 4 venue policy.


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101. Territorial authority must adopt class 4 venue policy— (1) A territorial authority must, within 6 months after the commencement of this section,

adopt a policy on class 4 venues. (2) In adopting a policy, the territorial authority must have regard to the social impact of

gambling within the territorial authority district. (3) The policy— (a) must specify whether or not class 4 venues may be established in the territorial

authority district and, if so, where they may be located; and (b) may specify any restrictions on the maximum number of gaming machines that may be

operated at a class 4 venue; and (c) may include a relocation policy.7 (4) In determining its policy on whether class 4 venues may be established in the territorial

authority district, where any venue may be located, and any restrictions on the maximum number of gaming machines that may be operated at venues, the territorial authority may have regard to any relevant matters, including:

(a) the characteristics of the district and parts of the district: (b) the location of kindergartens, early childhood centres, schools, places of worship, and

other community facilities: (c) the number of gaming machines that should be permitted to operate at any venue or

class of venue: (d) the cumulative effects of additional opportunities for gambling in the district: (e) how close any venue should be permitted to be to any other venue: (f) what the primary activity at any venue should be. (5) A relocation policy is a policy setting out if and when the territorial authority will grant

consent in respect of a venue within its district where the venue is intended to replace an existing venue (within the district) to which a class 4 venue licence applies (in which case section 97A applies).8

7 Section 101(3)(c): inserted, on 14 September 2013, by section 10(2) of the Gambling (Gambling Harm

Reduction) Amendment Act 2013 (2013 No 71). 8 Section 101(5): inserted, on 14 September 2013, by section 10(3) of the Gambling (Gambling Harm

Reduction) Amendment Act 2013 (2013 No 71).


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102. Adoption and review of class 4 venue policy— (1) A policy on class 4 venues under section 101 must be adopted in accordance with the

special consultative procedure in section 83 of the Local Government Act 2002 and, for the purpose of subsection (1)(e) of that section, the territorial authority must give notice of the proposed policy, in a manner that the territorial authority considers appropriate, to—

(a) each society that holds a class 4 venue licence for a venue in the territorial authority

district; and (b) organisations representing Māori in the territorial authority district. (2) A policy may be amended or replaced only in accordance with the special consultative

procedure, and this section applies to that amendment or replacement. (3) Subsection (1)(b) does not affect the ability of a territorial authority to take similar action

in respect of any other population group. (4) A territorial authority must, as soon as practicable after adopting, amending, or

replacing a policy, provide a copy of the policy to the Secretary. (5) A territorial authority must complete a review of a policy within 3 years after the policy is

adopted and then within 3 years after that review and each subsequent review is completed.

(5A) The first time that a territorial authority commences a review of a policy after the

Gambling (Gambling Harm Reduction) Amendment Act 2013 comes into force, the territorial authority must (and may at any other time) consider whether to include a relocation policy (as defined in section 101(5)) in its class 4 venue policy.9

(5B) Whenever a territorial authority is considering whether to include a relocation policy in

its class 4 venue policy, it must consider the social impact of gambling in high-deprivation communities within its district.10

(6) A policy does not cease to have effect because it is due for review or being reviewed. 103. Provision of information relating to class 4 venues in territorial authority district— On request from a territorial authority, the Secretary must provide— (a) the name and address of each society that holds a class 4 venue licence for a venue in

the territorial authority district; and (b) the name and address of each class 4 venue in the territorial authority district and the

number of gaming machines permitted to operate there.

9 Section 102(5A): inserted, on 14 September 2013, by section 11 of the Gambling (Gambling Harm

Reduction) Amendment Act 2013 (2013 No 71). 10

Section 102(5B): inserted, on 14 September 2013, by section 11 of the Gambling (Gambling Harm Reduction) Amendment Act 2013 (2013 No 71).


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APPENDIX 2: RACING ACT 2003 – RELEVANT PROVISIONS 65A. When territorial authority consent is required A territorial authority consent is required if the Board proposes to establish a Board venue. 65B. Application for territorial authority consent (1) An application for a territorial authority consent must be made to the territorial authority

for the district in which the Board venue will be located. (2) The application must be accompanied by the information required by the territorial

authority to enable it to consider the application properly. 65C. Considering and determining application for territorial authority consent (1) A territorial authority must—

(a) consider an application for a territorial authority consent in accordance with its Board venue policy; and

(b) either grant or refuse a consent.

(2) The territorial authority must notify the Board and the Secretary of its determination

within 30 working days after the later of—

(a) the date of receipt of the application; or (b) the date that it adopts a Board venue policy.

(3) A territorial authority must not consider an application for territorial authority consent

before it has a Board venue policy.] 65D. Territorial authority must adopt Board venue policy (1) A territorial authority must, within 6 months after the commencement of this section,

adopt a policy on Board venues. (2) In adopting a policy, the territorial authority must have regard to the social impact of

gambling within the territorial authority district. (3) The policy must specify whether or not new Board venues may be established in the

territorial authority district and, if so, where they may be located. (4) In determining its policy on whether Board venues may be established in the territorial

district and where any Board venues may be located, the territorial authority may have regard to any relevant matters, including—

(a) the characteristics of the district and parts of the district: (b) the location of kindergartens, early childhood centres, schools, places of

worship, and other community facilities: (c) the cumulative effects of additional opportunities for gambling in the district.


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65E. Adoption and review of Board venue policy (1) A policy on Board venues under section 65D must be adopted in accordance with the

special consultative procedure in section 83 of the Local Government Act 2002 and, for the purpose of subsection (1)(e) of that section, the territorial authority must give notice of the proposed policy, in a manner that the territorial authority considers appropriate to—

(a) the Board; and (b) organisations representing Māori in the territorial authority district.

(2) A policy may be amended or replaced only in accordance with the special consultative

procedure, and this section applies to that amendment or replacement. (3) Subsection (1)(b) does not affect the ability of a territorial authority to take similar action

in respect of any other population group. (4) A territorial authority must, as soon as practicable after adopting, amending, or

replacing a policy on Board venues, provide a copy of the policy to the Board and the Secretary.

(5) A territorial authority must complete a review of a policy within 3 years after the policy is

adopted and then within 3 years after that review and each subsequent review is completed.

(6) A policy does not cease to have effect because it is due for review or being reviewed.


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APPENDIX 3: THAMES-COROMANDEL DISTRICT GAMBLING VENUE POLICY Adopted 31 March 2008 and reviewed in February 2011 with no changes resulting. Available on-line at www.tcdc.govt.nz (keyword: ‘gambling’).

Background The provisions relating to gambling are contained in the Gambling Act 2003 and in the Racing Act 2003. The purpose of the Gambling Act 2003 (the Act) is to:

Control the growth of gambling.

Prevent and minimise the harm that is caused by gambling.

Authorise some gambling and prohibit the rest.

Facilitate responsible gambling.

Ensure the integrity and fairness of games.

Limit opportunities for crime or dishonesty associated with gambling.

Ensure that money from gambling benefits the community.

Facilitate community involvement in decisions about the provision of gambling. The Act establishes four classes of gambling and amends the Racing Act 2003 to extend provisions of the Gambling Act to racing and sport betting. Class 4 gambling generally means gambling that utilises or involves a gaming machine, and a Class 4 Venue is a place at which class 4 gambling is conducted. The New Zealand Racing Board may establish Board Venues where the main business carried on is providing racing betting or sports betting services. The particular involvement of the Council is:

That it must have both a Class 4 Gambling Venue Policy and a (Totalisator Agency) Board Venue Policy. The policy is restricted to determining where venues may be established and the maximum number of machines that may be operated at any class 4 venue.

Must consider applications for Venue Consents within 30 working days of an application (or the date the venue policies are adopted by Council).

http://www.tcdc.govt.nz/


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Both policies must be reviewed every three years. A venue consent, if it is granted by Council, is one of the requirements that an operator must meet before the Department of Internal Affairs can grant a class 4 operators licence. Any gambling activity that involves a gaming machine outside a casino is classified as Class 4 gambling. Council has been provided with information that indicates that there are 334 gaming machines (pokies) currently authorised in the Thames-Coromandel District Apart from transitional provisions applying to existing venues, clubs desiring to merge and Ministerial discretion, class 4 venues are restricted to 9 gaming machines. The Act does not set a limit as to the number of venues that may be approved.

Factors to Consider Council is required by the Gambling Act to review its gambling policy every 3 years. The Policy must be reviewed using the special consultative procedure as set out in the Local Government Act 2002. Consent is only given if the application meets the requirements of the gambling policy. Social The social impacts that the Act is designed to consider are:

Control the growth of gambling

Prevent and minimise the harm that is caused by gambling

Facilitate responsible gambling

Limit opportunities for crime or dishonesty associated with gambling. The Act requires the Council in its policy to consider:

The characteristics of the district and parts of the district

The location of kindergartens, early childhood centres, schools, places of worship, and other community facilities

The number of gaming machines that should be permitted to operate at any venue or class of venues

The cumulative effects of additional opportunities for gambling in the district

How close any venue should be permitted to be to any other venue

What the primary activity of any venue should be. Economic The economic aims of the Act seem to include:

Ensuring that money from gambling benefits the community. The Council could consider that class 4 gambling venues and TAB’s are an added tourism attraction. Environmental Environmental issues could include the effects that class 4 venues and TAB’s could have on the amenity values of any part of the district. Cultural The cultural aims of the Act seem to be:

Authorise some gambling and prohibit the rest

Ensure the integrity and fairness of games


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The rationale behind the legislation is that gambling can have negative side effects. People can, for example, become addicted to gambling, which can lead to financial and social problems for themselves and their families. This can lead to increased community and public sector costs in dealing with these negative side effects. As a result Parliament has seen it as being desirable that local authorities be able to control the number of Class 4 and TAB venues operating within their districts. There are other mechanisms in place to control other types of gambling. However, the Act also provides for the return of a portion of the proceeds to the community by way of grants for any of the following purposes:

A charitable purpose

A non-commercial purpose that is beneficial to the whole or a section of the community

Promoting, controlling, and conducting race meetings under the Racing Act 2003, including the payment of stakes.

The availability of gaming machines can also be considered a visitor attraction from which the community benefits. The real, perceived or potential harm from gambling has not been quantitatively established for the Thames-Coromandel District. Nationally, there is evidence that gambling is a problem for some people and that these people are often from the lower socio-economic population cohort. In developing this policy Council must have regard to the social impact of gambling within the District and may have regard to any other relevant matters including:

The characteristics of the district

The location of kindergartens, early childhood centres, schools, places of worship and other community facilities

The number of gaming machines that should be operated at any venue or class of venue

The cumulative effects of additional opportunities for gambling in the district

How close any venue should be permitted to be to any other venue

What the primary activity at any venue should be Social Impact of Gambling in the Thames-Coromandel District The Council has little information upon which it can make an assessment of the social impact of gambling and more particularly gambling through Class 4 and TAB venues. A social impact study will be undertaken prior to the next review of the policy. Council will need to work collaboratively with other agencies to develop such a report. The Characteristics of the District The statistics available to Council suggest that there were 334 authorised gaming machines in the district at 30 September 2007 and it is estimate that there is a resident population of resident population of 20,500 adults over the age of 18 years. Around 50% of properties, within the district, are unoccupied. These property owners tend to be in the middle to higher socio-economic groups. The visitor, tourist and non-resident property owner cohorts can add in excess of 100,000 people to the district’s ‘population’ over the summer and other holiday periods. Note that a peak of 142,375 was estimated for 31 December 2003. As a result a calculation of gambling machine ratios based on the resident population base can be unreliable.


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The number of dwellings could provide a more reliable base for comparisons from year to year within the district. There were estimated to be 22,704 separately privately owned dwellings as at 7 March 2006. Adding the approved building consents for the period since census increases that estimate to 23221 as at 31 October 2007. A base figure would therefore be one machine per 60 dwellings. Location of Educational Facilities, Places of Worship, Other Community Facilities There is a generally accepted view that gambling venues should not be located near kindergartens, early childhood centres, schools, places of worship, and other community facilities. Many established venues are located near such facilities. It would be possible for any of the establishments mentioned to set up a new facility alongside or near to a gambling venue. Number of Gaming Machines at any Venue or Class of Venue The existing class 4 venues can be classified into four groups:

Licensed Clubs

Sporting Clubs

Hotels, taverns, restaurants etc which hold on-licences under the Sale of Liquor Act 1989

Stand alone Totalisator Agency Board outlets. At present there are no stand alone TAB outlets in the district 16 of the current 30 sites have in excess of 9 gaming machines. The Cumulative Effects of Additional Gambling Opportunities in the District The effects of gambling in the district have not been clearly established. There will be a need for a Social Impact Study before the Council can adequately address to this issue. How Close any Venue Should be to Any Other Venue There may be an issue with problem gamblers migrating from one venue to another to avoid detection. It may be helpful to place some distance between venues to reduce the opportunity for such migration. It may be undesirable to allow a cluster of venues in any one location. What the Primary Activity at Any Venue Should Be The Act imposes age restrictions on gambling. It would be consistent if the primary activity was one which had similar age restrictions. The Act has minimisation of harm arising from gambling as one of its main purposes. It follows that venue operators should have the capacity to provide management and operating systems that are in accord with that purpose. Options Considered There is a continuum of options from a tightly controlled regime aimed at positive reductions in the number of venues and gaming machines, to a relaxed regime that would allow a proliferation of venues operating the maximum number of machines allowed by the Act.


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The tight control options would require justification through significant evidence of harm from gambling in the district and evidence that tight controls would in fact assist in resolving the problem. A relaxed regime would need to be justified again through significant evidence that there is not a problem in the district and that the proliferation of venues and machines will not cause a problem to arise. The Council is bound to take notice of the purposes of the Act and should be seen to be imposing some control over venues and machines. In doing so, however, Council is also mindful that there are other forms of gambling available within society which it does not control directly. Proposal The policy will be used by Council to assess applications for Class 4 gambling venues. Strategic Alignment Council is required to be involved in this activity by the Gambling Act 2003. Council has en existing gambling policy which is due for review. Legislation Section 102 of the Gambling Act 2003 requires Council to review its gambling policy every 3 years. The policy must be adopted using the special consultative procedure as outlined in the Local Government Act 2002. Implementation This policy is made and will be reviewed only by the Council. The Chief Executive or his delegate will determine applications for class 4 venue consents. Risks There is a risk that minimal control may lead to the worsening of any problem gambling situation that exists in the District. There is a risk that tight controls may reduce the amount of community funding available in the District. Policy Statement A. Objectives of the Policy

To ensure the council and the community has influence over the provision of new Glass 4 and TAB gambling in the Thames-Coromandel District.

To allow those who wish to participate in Gambling Machine and TAB gambling to do so within the Thames-Coromandel District.


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B. Where Class 4 Gambling Venues may be Established

Class 4 gambling venues may be established within the Thames-Coromandel District at any premise holding a current on-licence for the purpose of operating a Hotel or Tavern issued pursuant to the Sale of Liquor Act 1989, subject to meeting application and fee requirements.

New Zealand Racing Board Venues (TAB’s) may operate gaming machines in the Thames-Coromandel District.

C. Numbers of Gambling Machines to be Allowed

A “sinking lid” will be applied in that no new venues or gaming machines will receive consent from Council.

D. Applications Applications for Council consent must be made on the approved form and must provide:

name and contact details for the application;

street address(es) of premises proposed for the Class 4 licence;

Description of the structure of the applicant (Society or Corporate Society) together with incorporation details

the names of management staff;

a 12 month business plan or budget for the establishment, covering both gambling and other activities proposed for the venue;

details of Host Responsibility policies and procedures covering o training for operational staff on dealing with problem gamblers o provision and display of problem gambling material o support for and supervision of those affected by addictive gambling o implementation and monitoring plans

details about the venue operator including: o Operating structure o Ownership of the premises o evidence of police approval for owners and managers of the venue; o Nature of the businesses operated from the premises

a floor plan covering both gambling and other activities proposed for the venue, including: o layout of each floor of the venue; o location of gaming machines o location of clocks o location and description of signage o location of displays of problem gambling material

details of liquor licence(s) applying to the premises.

A location map showing the nature of businesses and other activities conducted in the general neighbourhood.

Council may request comment from health providers or those working with problem gambling. The application will be publicly notified and a notice will be displayed on the proposed premises.


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E. Application Fees These will be set by the Council from time to time, and shall include consideration of:

the cost of processing the application, including any consultation and hearings involved;

the cost of triennially reviewing the Class 4 gambling venue and TAB venue policy;

the cost of inspecting Class 4 gambling venues on a regular basis to ensure compliance with consent or license conditions;

a contribution towards the cost of triennial assessments of the economic and social impact of gambling in the Thames-Coromandel District

F. Administration Applications for Class 4 and Board Venue consents will be determined by the Chief Executive or his delegate subject to a right of objection to the Council or its delegated committee. Any such objection must be lodged within 10 working days of notice of the determination. Representations from the public will be considered by the Council and must be received by the due date advertised in the public notice. A hearing may be conducted into any application. G. The Social Impact of Gambling in the Thames-Coromandel District The Council recognises that there is a need for Social Impact Study to be undertaken prior to the next review of this Policy. Therefore a social impact report covering the issue of gambling will be made available at the next review. Measurement and Review Statistics will be maintained of total numbers of gaming machines, venues and societies. The policy will be reviewed within three years as required by the Act or at any earlier time determined by the Council. Information generated from any social impact report into the effects of gambling in the district will be taken into account in any review of this policy that is undertaken by council.


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APPENDIX 4: CLASS 4 GAMBLING TRENDS IN THAMES-COROMANDEL 2003-2013 The following information was compiled from the Department of Internal Affairs website (www.dia.govt.nz) on 25 January 2014 in relation to:

22 September 2003 Notification (Verified machine numbers) (statistics self-reported by gambling machine societies as at 1/11/2004);

All venues and numbers by territorial authority at 30 September 2007; and

All venues and numbers by territorial authority at 31 December 2013. Notes: 1. Where the description of Society name includes ‘previously XYZ society’ this means that ownership of machines at that venue has changed to a different society or the society has been renamed. 2. Where the description of a Venue name includes ‘previously XYZ venue’ this means that the venue has changed names. This does not necessarily imply anything about change of ownership of the venue. 3. The term ‘lapsed’ means that a venue no longer holds an operators licence for class 4 gambling machines. This does not imply anything about the current status of that venue for other purposes. 4. Due to only a small number of quarterly records being examined, some changes of license ownership and/or venue name may not be captured below.

Clubs (1) or Societies (2)

Society Name Venue Physical Address Town Machines as at 22

Sept 2003

Machines as at 30

Sept 2007

Machines as at 31

Dec 2013

2 The Lion Foundation (previously Perry Foundation)

Star & Garter Hotel 5 Kapanga Road Coromandel not listed 9 9

2 New Zealand Community Trust (previously Pub Charity)

Admirals Arms 146 Wharf Road Coromandel 12 12 12

2 New Zealand Community Trust (previously Scottwood Group)

Coromandel Hotel 611 Kapanga Rd Coromandel 12 9 9

2 New Zealand Community Trust (previously Royal Oak Hotel Community Foundation)

Royal Oak Hotel Main Road R D 5 Coromandel 3 4 4

1 Nil (previously Coromandel Bowling Club Inc)

Coromandel Bowling Club Woollams Avenue Coromandel 1 lapsed lapsed

2 Nil (previously Century Foundation Ltd) The Last Post 12 Thames Street Oamaru Bay 9 lapsed lapsed

1 Pauanui Sports & Recreation Club Inc Pauanui Sports & Recreation Sheppard Avenue Pauanui 10 10 10

2 Nil (previously Pub Charity) Puriri Hotel S H 26 Puriri 1 4 lapsed

2 Nil (previously Trillian Trust) Sir George Grey Hotel 130 Main Rd Tairua 5 lapsed lapsed

2 Trillian Trust (previously Cuesports Foundation Ltd)

Punters Bar and Grill (previously Punters Cafe and Bar)

Shops 3 to 5 The Mall, 7 Main Road (previously just Shop 5)

Tairua 3 6 9

1 Tairua Bowling Club Inc Tairua Bowling Club 44 Hornsea Road Tairua 3 3 2

2 Nil (previously Pacific Sports & Community Trust, previously Water Safety Education Foundation)

Former Brian Boru Hotel 200 Richmond Street Thames 18 18 lapsed

2 Grassroots Trust Ltd (previously Pacific Sports & Community Trust, previously Water Safety Education Foundation)

Junction Hotel 700 Pollen Street Thames 18 18 18

2 New Zealand Community Trust Punters Sports Bar 719 Pollen Street Thames 18 18 18

2 Nil (previously The Lion Foundation, Former Deli on Pollen 545 Pollen Street Thames 18 18 lapsed

http://www.dia.govt.nz/


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Clubs (1) or Societies (2)

Society Name Venue Physical Address Town Machines as at 22

Sept 2003

Machines as at 30

Sept 2007

Machines as at 31

Dec 2013

previously Perry Foundation, previously Pub Charity)

(previously The Goldmine)

2 Pub Charity (previously Order of St John Auckland Regional Trust Board)

Imperial Hotel (previously Chuffin Hellfire Promotions Ltd aka Udder Bar)

476 Pollen Street Thames 14 14 14

1 Thames Workingmen's Club Inc Thames Workingmen's Club 407 Cochrane Street Thames 14 14 14

2 Nil (previously The Lion Foundation, previously Scottwood Group)

Salutation Hotel 400 Mary St Thames 12 10 lapsed

1 Nil (previously Thames RSA Inc) Thames RSA 410 Queen Street Thames 10 lapsed lapsed

2 The Lion Foundation (previously One Helix Trust)

Kopu Station Hotel Cnr State Highways 25 & 26, RD1

Thames 8 8 8

1 Nil (previously Thames Club Inc) Thames Club 601 Mackay Street Thames 5 4 lapsed

1 Thames Bowling Club Inc Thames Bowling Club Court Street Thames 4 4 4

1 Thames Coast Bowling Club Inc Thames Coast Bowling Club Wests Crescent Thames 4 4 6

2 The Lion Foundation (previously The Southern Trust)

Bucks Sports Bar & Grill (previously JT's Sports Bar, previously Bucks $$ TAB)

100 Casement Road Whangamata 18 18 18

1 Whangamata Club Inc Whangamata Club 404 Port Road Whangamata 18 18 18

2 The Lion Foundation (previously South Auckland Charitable Trust)

The Palms Tavern 413-419 Port Road (previously just 415 Port Road)

Whangamata 16 16 18

1 Whangamata RSA (Inc) Whangamata RSA 324 Port Road Whangamata 12 12 12

2 Nil (previously Pub Charity) Pinky's Bar & Grill 703 Port Road Whangamata 9 9 lapsed

1 Nil (previously Whangamata Ocean Sports Club Inc)

Whangamata Ocean Sports Club (previously Whangamata Boat & Game Fishing Club)

Port Road Whangamata 7 7 lapsed

2 Nil (previously The Southern Trust) Whangamata Hotel 524 Tairua Road Whangamata 0 lapsed lapsed

2 The Lion Foundation (previously Perry Foundation)

The Sand Bar 31 Albert Street Whitianga not listed 9 9

1 Mercury Bay Club Inc Mercury Bay Club Inc Corner Cook Drive and Campbell Street

Whitianga 18 18 18

2 Pub Charity Smitty's Sports Bar and Grill 37 Albert Street Whitianga 18 18 18

2 Pub Charity Whitianga Hotel (previously Whitianga Marina Hotel)

1 Blacksmith Lane Whitianga 18 18 18

2 Pub Charity The Coroglen (previously Coroglen Tavern)

S.H. 25, Coroglen, RD 1 Whitianga 7 4 4

1 Nil (previously Mercury Bay Bowling Club Inc)

Mercury Bay Bowling Club 92 Cook Drive Whitianga 5 lapsed lapsed

Venues 34 30 23

Machines 348 334 270


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The following additional information was gleaned from online news reports and DIA records and correspondence:

Punters Bar and Grill Tairua was granted a consent by the Thames-Coromandel District Council on 18 August 2004 to increase the number of machines from 6 to 9. This was granted by DIA on 30 January 2008 so possibly didn’t show up in the stats before 31 March 2008.

Thames Coast Bowling Club application for an increase from 3 to 6 machines was granted by the Council on 16 June 2005 but not exercised until a later date.

The Palms Tavern was granted Council consent to increase numbers from 16 to 18 on 21 December 2006 and licensed by DIA for this increase on 24 January 2006.

The Sand Bar received its initial consent for 9 machines on 26 June 2006.

After operating as a pub 140 years, Thames' historic Brian Boru Hotel was purchased in late 2009 by Te Korowai Hauora O Hauraki to be turned into a Māori arts and crafts centre. This resulted in a reduction of 18 pokie machines form the District total. Reference: http://www.stuff.co.nz/waikato-times/news/3038148/New-community-role-for-old-Thames-hotel.

The Goldmine (545 Pollen Street, Thames) was listed in DIA records as having the maximum permissible 18 machines up until December 2010. In DIA’s March to June 2011 records, the site is listed as ‘Deli on Pollen’ and still with 18 machines. From 30 September 2011, the venue no longer appears in the DIA records. An insolvency record from March 2013 for Deli Enterprises Ltd indicates the venue ceased trading in September 2011: ‘The company fell into arrears in paying gaming funds from the Thames gaming lounge to the Lion Foundation as a result of an alleged staff theft’. The site at 545 Pollen Street is now home to Stirling Sports Thames.

The Salutation Hotel (400 Mary Street, Thames) was listed in DIA records as having ten pokie machines up until September 2011. The Hauraki Herald published an article on 6 March 2012 (see below) indicating that the Salutation Hotel had opted to close the pub’s gambling machine area in October 2011.

The Imperial Hotel (476 Pollen Street, Thames) continues to operate 14 pokie machines despite a March 2012 report that it had closed (see below). No disruption to operations is signalled in the DIA records. There has been a change of ownership.




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Hauraki Herald, Tuesday 6 March 2012 ‘Pokies in Decline’ by Jess Thorne-George A Thames Coromandel District Council policy to reduce the impact of problem gambling appears to be making progress with gaming machine numbers in Thames falling almost 30 per cent in the past six months. As long-time Thames fixture the Imperial Hotel closed its doors to business last week, the town’s pokie machine tally took a permanent dive. Under the council’s sinking-lid policy there is a ban on any new pokie values being opened and existing sites cannot increase the number of machines. This means the 14 gaming machines removed from the Imperial Hotel cannot be replaced anywhere else within the district. In February 2011 a report presented to council showed there were 306 pokie machines across the Thames Coromandel district – one of the largest concentrations of gaming machines in the country, with an even spread between the east and west of the peninsula. That number dropped when the owners of the Salutation Hotel opted to close the pub’s gambling machine area in October last year, permanently removing 10 pokie machines from the district. Thames now has 60 gaming machines across five venues. Thames Bowling Club has four machines, Thames Coast Bowling Club has six, Thames Workingmen’s Club has 14 and Punters Sports Bar and The Junction Hotel each have 18. Te Korowai Hauora O Hauraki offers gambling prevention services in Thames and chief executive Hugh Kininmonth said although it was pleasing to see a reduction in pokie machines, he didn’t believe it was enough to combat the problem. “Unfortunately what it seems to be doing is just concentrating the gambling activity on the remaining gaming venues,” Mr Kininmonth said. “If I had my way we wouldn’t have any.” Mr Kininmonth considered gambling to be one of the biggest threats to a community. “There are two major threats in our community, P the drug and P the pokies … both are destroying us. “We see it every day, people who go and just think they will have a flutter on the machines and suddenly the kids aren’t eating for a week,” he said. Mr Kininmonth said gambling addiction affected all kinds of people. “It’s not just the most destitute in our community, it’s across the board.” The sinking-lid policy was introduced four years ago.


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APPENDIX 5: SUMMARY OF RESULTS FROM 2007/08 NATIONAL ASSESSMENT Source: SHORE (Centre for Social and Health Outcomes Research and Evaluation) & Te Ropu Whariki (2008) ‘Assessment of the Social Impacts of Gambling in New Zealand’, prepared for the Ministry of Health, December 2008.

Research theme Key findings

1. Participation in gambling Participation in gambling (excluding raffles) in the past 12 months in the general population was estimated at 61.8%. More than half the population had engaged with Lottery products, including approximately one-third of the population that bought lottery products only. Participation in other modes of gambling was lower, with fewer than 10% betting at a racetrack or TAB. Newer gambling opportunities (accessed via text messaging and the Internet) were used by less than one percent of the sample.

Electronic gaming machines (EGMs) were used by 4% of the survey respondents in clubs, 8% in bars/pubs and 8% in the casino.

For this analysis, the definition of higher level participation in gambling was set at three hours or more per week spent gambling and/or a loss of at least 5% of income. This categorisation defined 3.2% of the sample as heavier gamblers.

2. Gambling by demographic variables People who had not gambled in the last 12 months were more likely to be females, younger than 17 or over 65 years of age, single, mainly students or unemployed, have an overseas secondary qualification or university degree as their highest educational qualification, and the majority were Chinese, Korean or Pacific peoples.

People who only bought lottery products were more likely to be females; over 36 years of age, married or divorced, sick, have a diploma as their highest educational qualification, and the majority of them were Pakeha or Māori.

People who had lower levels of participation in gambling activities were more likely to be males; aged between 18-35 years; single; in paid employment; had secondary qualification as their highest educational qualification; and the majority of them were Māori or Pacific peoples.

People who had higher levels of participation in gambling activities were more likely to be males, aged between 18-35 years, single, either sick or unemployed, have secondary qualification as their highest educational qualification and the majority of them were Māori or Pacific peoples.

3. Impacts of gambling on domains of life People who had higher levels of participation in gambling activities (based on time spent and losses relative to income) reported experiencing significantly worse physical health, worse mental health, poorer feelings about self, lower satisfaction


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with life and more likelihood of unemployment. The measure of losses relative to income also showed an association with poorer relationships with family/friends, poorer overall quality of life, poorer work performance and study/training performance and poorer material standard of living.

4. Effects of gambling modes and venues Playing on the EGMs in any setting (bar, club or casino) was associated with self reported poorer physical health. Playing EGMs in both bars and casinos affected participants’ perceptions of their mental well being, relationships with family/friends, feelings about self, overall quality of life and overall satisfaction with life. Playing EGMs in bars was associated with poorer child rearing while playing EGMs in casino was associated with a better self-rated housing situation and material standard of living.

5. Self perception of changes on domains of life People who were in the higher participation group expected that they would have been better off in terms of their physical health, mental well being, relationships with family/friends, feelings about self, quality of life, satisfaction with life, financial situation, housing situation, material standard of living, study performance, and care-giving for children if they had not been gambling in the last 12 months. However, they reported that there would have been no difference in terms of their work performance or their ability to take care of the elderly.

Also, 2.1% of people who reported higher participation in gambling said they would have participated in some form of study or employment-related training if they had not been gambling in the last 12 months and 8.3% said they would have been in paid employment if they had not been gambling in the last 12 months.

6. Impact of gambling on illegal activities Approximately 1.3% of respondents admitted they had engaged in illegal activities (mainly stealing and fraud) during the last 12 months. People who were in the higher participation group were significantly more likely to be involved in illegal activities compared to people who never gambled or people who reported lower levels of participation.

People who played EGMs in a bar or played poker/card games at their own or someone else’s house were significantly more likely to be involved in illegal activities compared to people who never gambled.

For those who were involved in illegal activities, 25% of them said they would not have committed such a crime if they had not been gambling in the last 12 months.

7. Impacts of other people’s gambling on domains of life Approximately 12.4% of people had at least one person in their lives whom they considered to have been ‘fairly heavy gamblers’ in the last 12 months.


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The majority of the heavy gamblers were respondents’ friends (33.4%) or wider family members (26.8%). Approximately 25% of them were respondents’ close family members (ie, parents and siblings).

Close family members (ie, partners, children, parents, siblings) of heavy gamblers were most negatively impacted by their family members’ gambling. The life domains affected included physical health, mental well being, housing situation, material standard of living, relationships, care-giving for children, feelings about self, overall quality of life and overall satisfaction with life.

8. Ethnicity and modes of gambling Pakeha were more likely than other ethnic groups to bet at a race track while Māori were more likely to buy Lottery products; bet at the TAB; play EGMs in clubs, bars and casinos; and play poker/card games at their own or someone else’s house.

Compared to other ethnic groups, Pacific people were more likely to buy Daily Keno and play housie (in community centres, clubs or bars) while Chinese and Koreans were more likely than others to gamble at the casino table games.

For the Māori and Pacific samples there were significant associations between gambling participation and poorer quality of life in a number of life domains. As in the case of the general population findings, there were significant negative associations in a number of domains of life with time spent on EGMs. These predominantly negative associations for Māori and Pacific peoples contrasted with the findings for Pakeha, which were more mixed and predominantly positive.

9. Social impact Using a no-gambling counterfactual scenario the analysis has suggested that as much as a net 2.4% of the population (74,000 of New Zealanders) had an inferior state of reported mental well-being as a result of gambling in 2006 and 2007. The main source of these numbers is those who used EGMs and the associates of heavier gamblers.

Extrapolating from the survey, about 10,000 people (just below a third of one percent of the adult population) committed illegal activities in the last year because of gambling.

Of those who had a reduced satisfaction with their lives because of their gambling, the largest contribution was from those who were using EGMs and those who were associates of heavier gamblers.


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APPENDIX 6: SUMMARY OF VERBAL SUBMISSIONS TO TCDC 2008 Source: Thames-Coromandel District Council (2008) ‘Minutes of the Thames-Coromandel District Council Hearing Meeting 26 March 2008 and 31 March 2008’.

Submitter Key points

Coromandel Residents and Ratepayers (Sue Wright)

Support a sinking lid policy.

Have 20 rather than 30 machines in Coromandel town.

Benefits to the community should be increased by increasing the percentage of return.

Cannot see the need to have machines in a place for tourists

Social impact survey should be carried out and paid for by central government.

Council should direct where social grants are awarded, as they are more aware of the needs in the community.

Gambling Watch (Dave Macpherson) Spoke to a PowerPoint presentation provided on hand outs.

The Association supports gambling with stricter controls.

Help for problem gamblers is hard to get in this District.

Pokie machine gambling is on the rise.

The Association believes there is a link between the number of machines and the amount of problem gamblers.

The District has the highest ratio of pokie machines to adults.

The national ratio has improved, but this District has declined.

The proximity of machines is a factor to consider.

Linking the ratio to number of dwellings is not the right thing to do, particularly as there is a large non-resident population.

Older people are showing problems with gambling. This District has an ageing population.

Chartered Clubs do not have to give any income back to the community.

There are no local trusts in the area that provide funding to this District.

Barry Arnold Mark Judd-Sinclair Reformed compulsive gambler who now works with other reformed gamblers and alcoholics

Requests that Council reduce the number of machines in the District.

Requests that controlled areas for gambling are set up with no alcohol. Alcohol and gambling go hand in hand.

Compulsive gamblers do not stop when the money runs out; they find other ways of getting money, eg, theft.

Feels that for every problem gambler there are 10,000 people affected

There are more female problem gamblers than male.

A problem gambler will go to any source of gambling, however, pokies are particularly bad as they are widely available, sometimes 24 hours a day.

Age range for problem gamblers is mid 20’s to mid 40’s, and are often people with large families.

New Zealand Racing Board (Jarrod True)

There is a move towards “fresh” environments for TAB’s rather then the dingy atmosphere there is now.

Only eight people rang the Helpline; however, it was suggested by Councillor Peters there were many more that did not contact the Helpline.

There are no Board venues in this District currently.

A change in the policy around liquor licensing and gaming machines would provide the possibility of the Board to open a stand alone, alcohol free venue in this area, that also housed gaming machines.

Gaming machines contribute a site rental to the TAB, which helps with


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their costs.

The figures provided regarding machine numbers and gambling addiction are from the Ministry of Health.

Malcolm Sandilands Licensing Inspector for the District and a concerned resident.

Requests that only taverns, hotels and clubs have licences.

That the Council educates the public on the dangers of problem gambling.

Restaurants and cafes have an on-licence but should not have gaming machines and they are not given a licence at present.

At present, there is a loophole in the policy that allows restaurants and cafes to have gaming machines and if they forced the issue, the Council would have to allow it.

Not all gaming machines are owned by Trusts.

Mercury Bay Club (David Ross) A letter was distributed to the Councillors from John Stansfield, Problem Gambling Foundation in support of the Club.

The Club would like to be more involved when other venues apply for gaming machine licences.

Would request that the allocation of gaming machines be done on a Ward basis.

Clubs are a safe gambling venue.

Oppose a reducing cap on gaming machines.

The ratio of dwellings to machines is out of kilter.

Showed the Councillors the records of out of area visitors to the Club and at times there are not enough machines to cater for them. Would support a temporary increase of machines in peak times

Many community groups would suffer if there were no funding provided for by gaming machine grants. The Club distributes approximately $10-$14k to community groups per year.

The Club would not survive as a “Community Club” without the income from gaming machines.

Ebenezer Community Trust (Dr Paul Silvester)

Although against gambling, the Trust is reliant on funding from gaming machines.

Gaming machines are particularly addictive.

Problem gamblers are unlikely to seek help.

Problem gambling is bad for rural business as money flows out of the community.

Would request a sinking lid policy and limit the number of machines at any one venue.

That this Council aim for a nationwide minimum activity, rather than the maximum as the District is now.

Believes there are approximately seven times more problem gamblers than those that seek help in any given area.

Paulette Goddard Request no new venues and no new licences (sinking lid).

The knock on effect of a problem gambler has to be considered. It affects far more people than those that present themselves to services for help.

$421 put through the machines with a return of $63.

A social impact assessment would useful before making policy decisions.

Social attitudes towards gambling are important.

It is acknowledged that Council has limited powers in this area.

Pat Duncan-Taylor Young people are more exposed to gambling and alcohol than in the past.

The Council is aware of the harm being done by organisations that are


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making money from gambling.

The Lion Foundation (Joanne Wood and Bronwyn)

90% of money collected in an area is put back in that area.

The Foundation has only had a presence in the District for the last 16 months and therefore has not had an opportunity to approve many grants in the area.

The Foundation has three sites in the District.

Coromandel Colville Community Board (Chris Stark)

A social impact study should be undertaken by Council or central government.

Monitoring is difficult when the machines are spread throughout an area.

Council should not be required to see business plans for gaming venues. Following the Bylaws should be enough.

Support sinking lid to a degree. Do not want them done away with altogether.

Suggest a ceiling of 20 machines.

Pub Charity (Martin Cheer) Machines can be set between 72% and 98% as per legislation. All machines in NZ are set at 92%.

Figures are often used to support the side of the argument that people sit on.

Feels problem gambling is a mental health problem, not a social issue.

Te Korowai Hauora o Hauraki (Hugh Gerard Kininmonth)

Approximately 10% of people play pokie machines, so if the incidence of problem gambling is 10%, that would be one person in every 10.

Sees the outcome of people not feeding their children, paying their bills etc.

It is a negative that money is leaving the community through gambling. It would be better for the community if the money were spent at other local businesses.

The Council has a responsibility to put in some controls to protect the community it represents.

Does not consider that Clubs are an issue, the problem mainly lies in Pubs. Clubs know their members; pubs do not know their clientele.

The problem is a social trigger issue.

Helpline figures are only one indication of the prevalence of problem gamblers.

Sees 1-2 people per day with issues with problem gambling.

Advocates a sinking lid policy.

Charity Gaming Association (Francis Wevers)

Jackpot size is limited to $1000 (there are no limits in Casino’s)

By mid 2009, all machines will have player information displayed at a random time that will show what has happened in the last 30 minutes to give people an opportunity to walk away. This will cost approx $60m to install.

Gamblers are very inventive in getting around protective measures.

$900k of $7.3m is used in administration costs.

Machine and revenue numbers do not directly relate to the amount of problem gamblers.

Those seeking help have declined since 2004.

The Problem Gambling Foundation has exceeded its brief in approaching Councils and that they are outside their level of expertise.

The Gambling Act has only shifted where gambling takes place, rather than reducing the amount of money spent overall on gambling.

Lotto shops that sell a winning ticket get 7% of the winning amount. Gaming machine venues get no such commission payment.

The Association recognises the difficulty of having a problem gambler in a family.

The Association acknowledges that it needs to do more to build the


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fences to protect problem gamblers.

A problem gambler ID card is being considered, however, this is unlikely to safeguard the determined problem gambler.

Problem Gambling Foundation (Max Llewellyn)

The Foundation works with central government to a certain extent with regard to alternate funding streams.

John Stansfield on behalf of Richard Northey

Chief Executive Officer of the Problem Gambling Foundation

The Foundation is the expert in treatment of problem gambling.

Many low-income people have no landlines, so are not contacted by telephone surveys regarding problem gambling.

Actually, there is a lack of problem gambling services available for people to attend.

The figures from the Ministry of Health (MOH) are only from MOH contracted services and there are none in this area to report on, this brings into question the figure of only eight people asking for assistance.

Currently have four people on suicide watch related to problem gambling.

Venue licences are granted forever.

Auckland City has had a sinking lid policy for 4 years and their income from grants has increased.

There is a substitution effect around fund raising.

Not anti-gambling, just anti-harm

There is a pre-commit system where the person has details entered in about their limits, this card must be inserted into the machine to play, and it reminds them of their self-imposed limits.

The Foundation would like player tracking card based playing that can tell in real time if there is a gambling problem and are lobbying central government.

Regular players of gaming machines get hurt.

The Foundation believes that $7m should be made available to Territorial Local Authorities to assist people with problem gambling. This has been opposed.

Currently the District has more licences available than are taken up.

The Department of Internal Affairs has a report broken down by gender, income and race on who is gambling. It is clear; it is low-income people who are gambling. The statistics come from face to face interviews.

Problem Gambling Foundation (Catherine Fitzsimons)

Speaking on behalf of the youth voice.

Has been with the Foundation for nearly three years.

Works with all the people that aren’t turning up to official “help services”.

An emerging problem for youth.

A gambler can lose their whole pay packet within five minutes.

There is real harm happening to the children in local communities.

Asks that Council assist with protecting the youth.

Smittys Bar and Grill (Gary Inglis – also HANZ President)

President of the local branch of HANZ

Involved in the initial installation of gaming machines in the 1980’s

People gamble for a host of reasons.

The community has to receive at least 37% of proceeds as grants.

The satisfaction of receiving the thank you calls from those that have received grants is enough for HANZ to support the status quo.

Tries to get problem gamblers that have self-excluded from the bar to go to other venues in the area

Ten people over 3-4 years have identified themselves as problem gamblers to the bar.

The establishment gets outside agencies to assist with dealing with problem gambling.


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Problem Gambling Foundation (Catherine O’Kelley)

Qualified psychotherapist and has worked for the Foundation for six years.

Challenges that anyone could succumb to problem gambling, went through three scenarios of people she has treated.

Has seen a diverse range of people with gambling problems.

The only people happy with the money put into gaming machines are the organisations that make money out of them.

Hauraki Family Violence Intervention Network (Kaye Smith)

There is very little information available to the Council to assist them with making a decision on the policy.

Women gamblers are using the “family” money for gambling-shopping money etc.

The District has the highest ratio and spending per capita on gambling.

Council has a legislative requirement to undertake a social impact study.

Hauraki District has undertaken a social impact study.

Mercury Bay Community Patrol (Laurie Johnston)

As a representative of the Mercury Bay Club is very concerned about problem gamblers.

In the weekend, the machines are used by non-locals.

The Club has to spend $37k to bring the machines up to standard this year.

As a representative of the Community Patrol, funding was received from Council of $4,000.00 and Pub Charities has provided the rest of the funding.

Without Pub Charities, the patrol would not exist.

Advocates that the amount of machines should be capped.

Hauraki Health Link (Marie Reilly) Problem gamblers suffer from stress and loneliness and are more susceptible to suicide.

The Hauraki Health Link is concerned with the mental health problems associated with problem gambling.

Support venues should not be open early in the morning so that people have an opportunity to pay their bills before gambling.

Concerned about the “money lenders” that offer short-term loans.

Noted there is a van in the District, which offers loans on benefit days.

45 people came to the forum from where the evaluation forms were filled out (part of the submission).

Many people are not willing to seek help.

It is locals who are using gaming machines.

Advocates a social impact study on gambling.