Gambling Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeGambling Amendment Bill (No 3) — Second Reading[Sitting date: 27 May 2015. Volume:705;Page:4097. Text is incorporated into the Bound Volume.]Gambling Amendment Bill (No 3)Second ReadingHon PETER DUNNE (Minister of Internal Affairs): I move That the Gambling Amendment Bill (No 3) be now read a second time. At the outset I would like to thank the members of the Government Administration Committee for their efforts in thoroughly considering this bill. It was referred to the committee in November of last year and was reported back to the House on 11 May this year a considerably faster track than its predecessor. The select committee received 126 written submissions on the bill as well as hearing oral submissions in Wellington and Auckland.This bill makes a limited number of amendments to the Gambling Act 2003 but does so in several key areas. The majority of these changes relate to gaming machines or pokies in bars and pubs. This form of gambling generates a significant amount of money. For example in the 2013-14 financial year New Zealanders spent around $700 million on over 13000 pokie machines in commercial venues across the country. The select committee’s report recommends a range of key amendments to the bill which I support. Many are quite specific and traverse a wide variety of aspects of the Act. For example the committee’s report tidies up the important definition of “key person” in the bill to prevent unintended consequences. The regulation-making powers under the Act involving the way societies distribute funds to the community are also improved and this will resolve some gaps and fix some drafting issues.One purpose of the Act is to limit opportunities for crime and dishonesty associated with conducting gambling. People can be involved with conducting gambling either through a society that is licensed to conduct the gambling or as venue personnel where the gaming machines are located. Obviously there are those who receive grant funding as well. The Act looks to prevent conflicts of interest by prohibiting personal benefits being given or taken between those groups. The objective here is to ensure that personal gain is not a prime motivator for people’s actions over and above community benefit. This is a very difficult area because it is hard to define exactly what the unwelcome behaviour is. It is also a problem getting sufficient proof to successfully prosecute offenders. So the committee has recommended a change of approach considering that the bill originally went too far in trying to clamp down on transactions between these groups. Instead it has recommended an amendment to the bill so that the behaviour at issue is more effectively targeted.That will prevent everyday transactions between say the society and venue staff from triggering a potential conflict situation. For example someone from a society buying a meal at a bar where pokie machines happen to be located could well have been caught by the provision in the bill as drafted. I think the committee has arrived at a reasonable outcome. It has also introduced a longer limitation period for bringing prosecution actions for conflict of interest offences and that will more accurately reflect the length of time it takes to uncover the behaviour and gather enough evidence to mount a prosecution.Let me touch on some other improvements to the bill that the committee has made. It has recommended changes to give greater certainty in a few areas. One such change concerns the ability of the secretary in screening licence applicants in terms of their suitability to be involved in providing gambling. It is important that all relevant information can be considered to give a complete picture of a person’s past behaviour. Another change protects the ability of affected parties to seek a judicial review. The Gambling Commission has been given the power to delay the effective date of its decision so that a review can be sought. Another change of note concerns licence periods. The intention is to allow longer licences for highly compliant operators and the committee’s recommendations make it very clear that that will be a decision for the Secretary for Internal Affairs to make which will mean that there will no longer be appeals and arguments about why everyone is not getting a longer licence.I note that the committee’s report includes minority views on the most notable area of change that the bill introduces. This is in the area of payments to venues that actually host the machines. The committee has a couple of minority reports in that regard. New regulations would need to be developed to replace the current system which is agreed by all parties to be very cumbersome and time-consuming. The minority reports from Labour and the Greens describe particular concerns about the favoured option which is a commission-based system. Their concerns essentially are that a commission-based system could incentivise operators to maximise gambling in their venues. It was their perception that venue operators could take advantage therefore of vulnerable patrons rather than carrying out their duty to be responsible hosts. In response to those concerns I note that the design of the system for the regulations is still being developed. The aim here is for a payment scheme to cover the cost of venues. It is not intended to provide profits.Of course no system will be absolutely perfect but I do believe a change is needed. The current system requires a considerable amount of time and effort by the department and the societies. If payments were simplified the department could focus on other areas like harm prevention to ensure greater compliance by the sector. In short I want to give the House an assurance that the potential concerns about a new payment system are being taken seriously. Under the Gambling Act when new regulations are being proposed I am required to be satisfied that consultation has occurred with the people likely to be substantially affected. There is an onus on the department to ensure that all groups are consulted before final proposals are put forward and that their views are considered. Once the new system is in place class 4 operators will be expected to meet their harm prevention responsibilities.One of the purposes of the principal Act is to ensure that money from gambling benefits the community. I believe that this sits at the very heart of what we try to achieve in this country when it comes to the regulation of gambling. We are unique in the world in the way we channel money from gambling back into community purposes. It is a feature that I think we need to keep to the fore when we look at changes to our gambling laws. Gambling is an established legitimate form of entertainment. For the most part it is harmless fun but for a small few it is not fun but extremely destructive. We need to do all we can to make gambling a safe pastime and that is where the Act balances the provision of gambling with the need for harm minimisation measures to be put in place.I am aware that some have advocated the introduction of pre-commitment technology into our gaming machines. Although the Act already includes an ability to do this through regulations the evidence on pre-commitment is still unclear. The overseas experience has been mixed. Much depends on the specific design and features of such a system. In short there are many unknowns. Although I accept that the use of technology in this area has a lot of potential and could be a powerful way of encouraging people to gamble in a way that is appropriate to their circumstances and there are advantages in such a system I do not think we need to be rushing to impose that new technology. It would create a significant cost at the expense of community purposes. A reasonably strong compelling case is needed for features that will work best in the New Zealand context. I expect the Department of Internal Affairs to remain active in monitoring research and developments in this space including having discussions with the Ministry of Health and the Associate Minister of Healthwho has an interest in this issue as well.Finally can I conclude by acknowledging all of those who took time to make submissions to the select committee. It is a well-known fact that gambling issues always prompt a range of strong views from across the community. I think the committee has done a good job in working its way through those and presenting us with a workable piece of legislation. As a consequence of the committee’s work I think that the bill that has now come back to the House responds to the specific concerns raised about pokie operators. It does provide for better transparency in the sector and also some greater controls. That in turn will help ensure that the very important objectives of the Gambling Act are fulfilled. So I have great pleasure in commending the Gambling Amendment Bill (No 3) to the House.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Talofa lava. Malo Samoa. Malo le soifua. It is a pleasure to speak on the Gambling Amendment Bill (No 3) in this second reading. I want to acknowledge the 126 submitters who sent their submissions from problem gambling organisations to venues and societies to individuals. I want to thank them all because I think they contributed greatly to the amendments that have been made to this bill which I think have made this bill a lot better than it was at its first reading.The Labour Party will be supporting this bill but we do have some concerns. I want to thank the Minister of Internal Affairs for addressing those very concerns that we have in his speech first up. There is the issue around commission payment. A number of problem gambling organisations made submissions about their concerns about putting in place a commission-based payment system. Their concerns as the Minister said were around incentivising gambling so that venues would be better off with the more money that went through those machines and in so doing it would put their host responsibilities at risk. We want to highlight that.I have heard what the Minister has said and maybe there is room for a Supplementary Order Paper to make sure that that happens. One of the models that could be used in developing a commission payment system could be to place a cap on the percentage or the total amount that any venue can gain from one particular machine. I think that could address that issue so I guess the challenge for this House in taking up what the Minister has said is to make this bill even better than it is now. If we were to put something in this bill as a Supplementary Order Paper—and I am sure that I am bound to want to do that—it would be to make certain that the commission-based system does not incentivise more gambling.I have to point out that at the end of last year in the Department of Internal Affairs mystery shopperstudy only one of the 102 venues was compliant. So that does not give me a lot of encouragement about some of the venues actually being in a position at this time to not take the incentive of a commission-based system. That is why it is really important I believe that we think carefully about that and make sure that the commission-based payment system does not incentivise gambling.The other area that I want to pay particular attention to is harm minimisation measures. I think that we have missed an opportunity here. I believe that at every single opportunity when we are talking about gambling and the Gambling Amendment Bill (No 3) before us we should have and could have taken stronger measures around minimising the harm caused by gambling. The Minister mentioned—and it was also raised in the minority reports—implementing a pre-commitment system. Other countries have implemented this very system and I believe it is incumbent upon this Parliament to actually make sure that we have every opportunity to implement systems that do address the harm caused by gambling. Two of the submitters—I will not mention them by name—on two separate occasions spoke to the Government Administration Committee about their experiences of the harm that they have suffered through gambling. That was very passionate it was very powerful and what was very clear to me was that a system that actually worked around pre-commitment could have prevented the experience that they had had to go through. So I want to thank those two particular submitters who told us in very raw detail about the effect that gambling had had on their lives.There are some good things in this bill and that is why our party is supporting it. We have already heard from the Minister about the suitability of key persons and the key persons’ issues that are addressed in this bill. I want to focus on the benefits with conditions attached. The inclusion of just one word altered the whole of clause 16 to the satisfaction of the many many submitters who submitted against this particular clause and that was the inclusion of the word “improper”. Just one word and it changed the whole nature of the clause. Feedback from those submitters indicated that the inclusion of that word has addressed their issues because their issues were about things like being able to pay their staff because the clause had some unintended consequences that meant that as key persons they would not be able to walk into the pub of another society’s venue and order their dinner and a drink without breaking this law. So that is a proper thing for them to be able to do. The intention of the clause was to eliminate improper actions. So that was something that collectively as a select committee we were able to address.There were a number of submissions around the definition of a “relative” and that issue also was addressed. It was narrowed down to parents son daughter spouse or partner rather than the wider whānau. Some of us have got really big whānau which would have meant that we and the rest of our family would all be unable to carry out a normal transaction if we were a key person. Also we extended the limitations from 2 years to 5 years because there were indications that cases had been advised through the proper authorities but they were out of time. Two years seemed to be too short and so that has now been extended to 5 years. Also there are some specific clauses that the New Zealand Racing Board needed to be addressed and those amendments address those issues to an extent that I understand that it is satisfied. I am not sure whether all its members are happy but they are certainly satisfied with the amendments that have been made.So finally I just want to again thank the submitters and also acknowledge the members of the Government Administration Committee for the work that has been done. I also acknowledge the Minister again for acknowledging those key issues and concerns we have with this bill. Nō reira tēnā tātou.SARAH DOWIE (National—Invercargill): Talofa lava. Greetings Mr Deputy Speaker and thank you for allowing me to take this call on the Gambling Amendment Bill (No 3). The fact that it is No. 3 suggests something. It is a series of technical bills off the back of a parent Act the Gambling Act 2003 which was reform legislation to minimise harm in the industry of gambling.This bill I believe is an example of the MMP environment at work. It is the Government working with its coalition partners—in particular the Hon Peter Dunne who has shepherded this bill through the House and the Māori Party. But I also want to take this time to thank the Government Administration Committee. We often hear that it is a high-powered select committee that hears some very important bills. I want to thank the committee members for their collegial spirit in panel beating this bill into shape.I think it is worth noting that even though this is an amendment bill and it is technical in nature gambling—and this is certainly something I have learnt from other submitters whom we heard in Wellington and Auckland—affects all New Zealanders whether directly or indirectly at some point in their lives. That is why I think these bills should not be taken for granted. They do affect us and they are important when we are finessing this industry to minimise harm. This bill is in particular in respect of class 4 pokie machines and they are pokies that are held off site from casinos. We are trying to make the industry more transparent and of course at the end of the day a better industry.We heard from 126 submitters and as I said before we heard them in Wellington and Auckland. Most of those submitters were in support of had conditional support for or had a mixed view on the mooted draft bill. There were some submitters not in support of the bill because as we heard from our counterparts they believed that the bill did not go far enough in respect of some of the harm minimisation measures. I think that their intent is admirable and I certainly listened carefully to what they were saying but at the end of the day I believe that that went beyond the ambit of what this bill was considering. But it was certainly educational for me to hear those submissions and I take their wisdom on board.In respect of what this bill is trying to achieve in the first instanceit is trying to achieve transparency around grant decision-making. This bill introduces new requirements for publicising societies’ grants: the details as to what has been applied for what is received the purpose and what has been granted. It also provides that this information is detailed and sent through to the Department of Internal Affairs so as to achieve a balance and check on that society and so that the public can scrutinise that society and what it is providing—the funds that it is sending back to the community from where essentially they had been lost.The bill also requires any real conflicts of interest between societies that collect the money from gambling class 4 pokies and those grant recipients to be published again adding to the transparency and the accountability in the community as to how those funds have been applied. Regulations are to be developed later and they will set out the detail as to how all of this will be achieved so it may well be that general information is published in a local newspaper but then more detailed information is published online. Regardless of the mix of that the information will be readily available and hence that adds to the accountability.The second theme of this bill is to increase transparency around the operations of societies themselves. Under regulations the publishing of financial statements and the form in which they are published by societies will be mandated highlighting the efficiency of the operation itself. So again we are running with the theme of transparency and are trying to tidy up the industry and filter funds back into the community in which they were lost.The third theme I want to touch on is simplifying compliance costs in venue payments. We have heard from members opposite that they believe that a commission-based system will incentivise gambling societies to increase the number of machines or to be irresponsible hosts. They also oppose rewarding societies that perform well with longer licences at the discretion of the Department of Internal Affairs. On this side of the House we do not believe that that view has foundation. There is no evidence to suggest that moving to a commission-based system will incentivise gambling and the design of any new payment system will be detailed in regulations. As we are advised the department will run a full consultative process in respect of that and I think that that consultative process is extremely important for the purpose of giving more thought to what exactly the best cost recovery basis is to keep compliance costs down and again to keep things simple. Furthermore the grant of longer licences to societies that perform well does not equate with an abuse because those licences will be at the discretion of the regulator which will take into account the suitability of the applicant and past performance.It would not be appropriate for me to end this speech without some examples of some responsible class 4 operators that are performing well and that of course leads me back to my own electorate Invercargill and the Invercargill Licensing Trust. It is responsible for sponsoring our community in a fantastic way. It has allocated total grants of $49.57 million—Paul Foster-Bell: How much?SARAH DOWIE: —total grants of $49.57 million—during the 2008 to 2013 period which is an average of $9.92 million per year. It has delivered some really big-ticket items like our stadium ILT Stadium Southland and the velodrome which is responsible for some really fantastic projects. The stadium is integral obviously to our community. The weather is not always great. Of course I keep waxing on that our people are so positive we do not need weather to keep us positive but we can go indoors and use our stadium and enjoy that. But the trust has also delivered electronic whiteboards in schools. It has built learners’ pools for swimming and even contributed to tertiary scholarships. In saying that it has granted more than 170 scholarships to individual Invercargill students locally and abroad. Each student receives $2000 for 3 years and the total paid in 2012 and 2013 was $374000-odd. This is an example of a society working hard for the community. It can be done well and I believe that these measures in this bill will uplift the industry make it more transparent and minimise harm as the 2003 Act set out to do. So with that I commend this bill to the House.Hon RUTH DYSON (Labour—Port Hills): I would like to begin by requesting an extension of time for the member who has just resumed her seat Sarah Dowie—maybe for another 3 minutes. Seriously can I begin my contribution by saying talofa lava malo le soifua as part of my contribution to the celebration of the wonderful Samoan language this week. The week to celebrate Samoan language immediately follows New Zealand Sign Language Week which we had last week. I am calling on the member Ron Mark to give as much highlighting to the Samoan language as he did to New Zealand Sign Language Week last week but perhaps in a more gentle way. But the publicity we got for that language was great.This is a pretty momentous occasion tonight. I think that there have been few times since 2008 that we have not had on the Order Paper a gambling bill of some description so I am delighted to be speaking to the Gambling Amendment Bill (No 3). The other significance of this legislation as other members have indicated—the Minister who spoke the member from Invercargill and my colleague who is responsible for gambling issues for Labour Adrian Rurawhe—is that with a couple of policy points as exceptions this bill has been supported by the Government Administration Committee and most of the submitters. The submitters came to our committee and said: “We support this bill except for one area and it does not go far enough in another.” That was the basis of the contribution of some really substantial submissions and I have to say also that there were some submissions that were very moving.It is a huge difference to be debating a bill that has got agreement as opposed to that shonky Skycity deal that Minister Joyce brought to this House where we saw Skycity getting more pokies in return for a convention centre. In 2011 when Skycity booted out all the competition we were told would get a convention centre that could accommodate up to 5000 people. We will have a convention centre that can take fewer than 3000. Is that an international convention centre? I do not think so.Debate interrupted.