Hipkins Chris: Gambling Amendment Bill (No 2) — Second ReadingText is incorporated into the Bound VolumeHipkins Chris: Gambling Amendment Bill (No 2) — Second Reading[Sitting date: 05 May 2009. Volume:654;Page:2897. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka):The anticipation was building up and we felt that the Minister of Internal Affairs was cut down in his prime. I have to confess that I am still slightly in shock about being lectured on conflicts of interest by the Hon Dr Richard Worth although it would appear that he certainly has superior knowledge of the issue of conflict of interest in the House.I am happy to take a call on the Gambling Amendment Bill (No 2). The Gambling Act 2003 is a large complex and very prescriptive piece of legislation which was passed by the previous Labour Government in 2003. As with any Act that is as prescriptive and complex as this a number of issues that were going to be identified as it was implemented would need to be addressed through a fairly technical amendment bill. That is what this bill is.I would like to acknowledge the work of the former Minister of Internal Affairs the Hon Rick Barker who I know put in a lot of work to get this bill before the House. I would also like to acknowledge the members of the Government Administration Committee in the last Parliament who put in a lot of work to get the bill through the select committee process and back into the House. I acknowledge the work of my colleague Darien Fenton who was the deputy chair of the Government Administration Committee in the last Parliament.The bill contains several small policy amendments and technical amendments. The purpose is to allow the Act to operate as it was originally intended. The Gambling Act brought about the biggest changes to the gambling sector in over 20 years when it became fully operational on 1 July 2004. Among the things it aimed to do was to control the growth of gambling. There has certainly been significant growth in the gambling industry. Turnover in the gambling industry increased from $6.1 billion in 1998 to $14 billion in 2007. I think we would all agree that that is very significant growth in gambling. Another aim of the Gambling Act was to prevent and minimise gambling harm. I will talk a little bit about that in a moment.I will talk largely about pokie machines rather than casinos. It is worth noting at this point that one in five regular pokie players has been identified as having a gambling problem. The Gambling Act also authorises some forms of gambling and prohibits the rest. It ensures the integrity and the fairness of the games involved. It restricts the opportunities for crime or dishonesty it ensures that money from gambling benefits the community and it facilitates community involvement in decisions on the provision of gambling.It is useful to inject some more facts into the debate at this particular point. The gambling industry’s turnover as I noted was a little over $14 billion in 2007 and money lost was just over $2 billion of which about $950 million was lost on non-casino pokie machines. That is a very significant amount of money. I am told that the money collected from non-casino pokie machines is roughly the equivalent of the entire operating cost of the New Zealand Police. Up to 42 percent of the revenue from pokie machines is from problem gamblers—people who have been identified as having a problem. They make up around 3 percent of gamblers so a small number of people are gambling a very large sum of money through these pokie machines. Six major societies distribute around 60 percent of all non-casino expenditure funding to community organisations and each pokie-machine grant is approximately $2438. There were 1537 gambling venues and nearly 20000 pokie machines in New Zealand as at December last year. Every day $2.7 million is lost on non-casino pokie machines.I think we would agree that there are some significant issues around gambling that we need to look at. This bill which is largely a technical bill does not necessarily address those issues. It tidies up the Gambling Act to ensure that it operates as intended but I think we would agree that some significant issues still need to be addressed and may warrant further investigation. It is a tragic reality that hundreds of sports clubs and community groups throughout the country rely on the proceeds of gambling in order to survive. The Gambling Act was an attempt to ensure that the proceeds of gambling are invested back into the community in a way that is transparent and fair. It is fair to say that before the Gambling Act was passed there was a lot of rorting of the system.I was given pause when reading through this material to recall that back in the late 1990s - early 2000s when I was involved in the students association movement one of my jobs was to secure funding for our sports teams. We used to send a sports team to the New Zealand Uni Games the winter games and so forth each year. One of the major sources of sponsorship was the pubs and the money they gave us had been obtained from pokie machines. But it came with a lot of conditions. Although there were some potentially quite significant sums of money involved the conditions usually involved most of the money going back to the establishment that it was obtained from. So we would be told “Yep you can have $20000 for uniforms for your sports teams.” The uniforms themselves might have cost a couple of thousand dollars and they had to have the name of the sponsoring pub on them. The remainder of the money was expected to flow back across the bar of the pub involved. That was very commonplace. Of course there were some significant issues with that because the pubs involved would select groups for sponsorship that were more likely to put most of their money back across the bar. If a sport typically did not involve people who were likely to be heavy drinkers it was less likely to get pub sponsorship. The organisations that typically had an after-match function would get the money because the establishment owners knew that they were likely to get most of that money back across the bar. That situation needed to be cleaned up and that was one of the things that the Act was designed to achieve.It is fair to say that the gambling sector has cleaned up its act significantly since 2003 but there are still some significant issues to be dealt with. One of the issues that has come up is the use of pokie money by the racing industry and effectively the transfer of the proceeds of one form of gambling to another form of gambling. It would be fair to say that even though I agreed with much of what the Minister of Internal Affairs said I am still a little confused as to what the Government’s position on the racing industry is. I particularly refer to the Otago Daily Times on 27 April. The headline is “Shake-up possible for pokies” and the Minister said: “My priorities in this area are to maximise the community funding generated by non-casino gaming machines and to resolve questionable funding practices in the sector.” A further article appeared on 1 May which stated under “Racing bodies fear for future” that the Minister of Internal Affairs had indicated he may scratch charitable gaming trust grants to the racing sector a move that could result in the collapse of the industry according to some. Another article on 2 May stated that the Minister of Internal Affairs did not intend to look at the issue of pokie money being used for racing. I think everybody is a little bit confused and we would welcome at some point in the proceedings a clarification of the Government’s position on the use of pokie money in the racing industry.I will turn very briefly in the remaining minutes that I have to congratulate the Government Administration Committee on its work. It received 168 submissions on this bill which is obviously a very significant number. Of those 168 submissions 32 expressed general support for the bill. Many of the submitters proposed additional amendments or commented on specific matters that were outside the intent of what this particular bill was designed to achieve—the effective running of the Act as it was passed in 2003. But many of the issues that were raised were genuine and worthy of further consideration. The committee decided not to consider those issues according to its report because they were outside the intent of the bill. But that is something the new Government and the Department of Internal Affairs will want to consider.A number of the issues raised also related to regulation and to issues that could be better dealt with through regulation rather than through changes to the Act. They included things such as reducing maximum gaming-machine prizes regulating a gaming-machine’s spin speed pre-commitment and player tracking systems advertising standards and the accumulation of gaming-machine profits. I encourage the Minister and the Department of Internal Affairs to look closely at those issues and consider whether any further action may need to be taken on those particular concerns.One area that the committee could not agree on and that we in the Labour Party have a strong view on is the location of gaming machines in outside areas. Our view is that gaming machines should be located indoors and that any attempt to move them outside is clearly designed to circumvent the Smoke-free Environments Act 1990.