Dunne Peter: Gambling Amendment Bill (No 3) — Third ReadingText is incorporated into the Bound VolumeDunne Peter: Gambling Amendment Bill (No 3) — Third Reading[Sitting date: 15 October 2015. Volume:709;Page:7309. Text is incorporated into the Bound Volume.]Hon PETER DUNNE (Minister of Internal Affairs): I move That the Gambling Amendment Bill (No 3) be now read a third time. This is a small bill but it makes a number of important policy amendments to the Gambling Act 2003. These changes are predominantly for gaming machines outside of casinos. This sector which we call the class 4 sector is heavily regulated under the Gaming Duties Act. It involves high risks because there is a considerable amount of cash involved.The background to this bill is actually the member’s bill that was sponsored by the Hon Te Ururoa Flavell which became the Gambling (Gambling Harm Reduction) Amendment Bill 2013. The “Flavell Bill” as it was colloquially known attracted a very large number of submitters who raised a wide range of issues with the current framework for gambling operations in pubs and clubs. Views were expressed that parts of the framework for controlling this type of gambling were not perceived to be working particularly well. So this bill responds to some of those concerns and also simplifies some aspects of regulating the sector.I want to expand briefly on the concerns and how the bill addresses these. One of the concerns was a lack of transparency. A sector like this one where there is a considerable amount of cash being spent can raise suspicions. People are worried about whether the money is being used effectively. I have been pleased to see that there has been overwhelming support for the changes to improve transparency in the sector. The bill will create an environment where much more light is cast on the use of gaming machine funds. That is in terms of both the societies’ operating costs and also grant distribution.The bill also responds to the current lack of oversight over management companies that are paid by societies to carry out specific gambling-related functions. This bill will ensure that these companies are covered by the Gambling Act and that they can be audited and monitored the same way that societies are. Another change seeks to further minimise the potential for any conflicts of interest to arise between those involved in providing the gambling. People who are actually key decision makers in managing a trust or a venue will be captured by the conflicts of interest provisions in this new legislation. The changes also result in these individuals being considered during the licence period application and renewal process.I am aware that some submitters objected to the changes that will allow the Secretary for Internal Affairs the discretion to issue longer licences for societies and venue operators. The question that has been raised is why we would consider giving longer licences when recent performances by venues in the department’s mystery shopper exercise were not up to the mark. That is a fair question. But in response I would emphasise that the underlying intention of this change is to give the department the ability to offer an incentive for operators who show that they do consistently fulfil their obligations. That is simply expanding the options that the department currently has in its regulatory tool box alongside its ability to take enforcement action—so it is a little bit of carrot to go alongside the stick. The department will look very carefully at the circumstances under which a longer licence could be provided.The other aspect that I want to emphasise is that the obligations on societies and venue operators will not be diluted by the length of the licence. For example the obligation on societies to ensure that the risk of problem gambling is minimised at their venues will be ongoing. If serious breaches of any of the obligations at any point in time are found the action of licence suspension or even cancellation remains available to the department in the usual way.The bill contains amendments to change the way that class 4 venues are paid for their operating costs. These amendments will change the venue payment system from the complicated cost recovery process that we have at present to a payments model that will be prescribed in regulations. Final decisions on that model have yet to be made but discussions with the sector are under way. It is potentially possible that this new payment system could be commission-based. I know that this was the most contentious aspect of the bill. Pub owners are operating a business but they also have a responsibility to ensure that they provide a safe gambling environment and submissions on the bill have made it clear that people do not want to see a new system that could provide venue operators with an incentive to override their primary responsibilities. I agree with that and I have got no desire at all to see that type of outcome. The department is very aware of the concern and it has been a priority when planning the development of the new regulations. The Government will be interested in getting all views on how we get that balance right. The system at the moment is far too complex but I have no desire either to create a new system with negative incentives that cause harm.Can I acknowledge all those who took the time to make submissions and the members of the Government Administration Committee once more for their efforts in thoroughly considering the bill. They did a very good job in working their way through the range of views and presenting us with a workable piece of legislation. And I think as a consequence we have a bill that responds to a number of the concerns that were being expressed—we do have a more transparent environment we certainly have some greater controls and we also have a piece of legislation that is consistent with the primary objectives of the Gambling Act.This is one more in a series of reforms. We had the infamous long-drawn-out Gambling Amendment Bill (No 2) and now this bill—which has had a much more rapid passage—to make the original Gambling Act more fit for purpose. Although I was not the Minister at the time that both these bills were conceived I certainly endorse the intent behind them. After all class 4 gambling generates millions of dollars every year and we need to make sure and have as our overriding priority that the money intended for the community goes back to the community—that is the principle on which all of this operates. But at the same time we need to be looking at wider gambling behaviour and what it is going to mean in terms of ensuring there are sustainable levels of grant funding to communities in the future. That is why I have recently announced work on a wider review of the class 4 sector within the broader context of the overall gambling sector. The first stage of this review will be to seek to understand current trends in the sector and in the wider gambling environment and what they mean for the current class 4 regime and for future levels of community funding.The Gambling Act has been in place for over 10 years now and it is time to assess what it has achieved and what changes are needed to ensure that New Zealand’s gambling regulatory system remains sustainable relevant to the needs of the time and fit for purpose. The work around the review is at an early stage but once some preliminary advice has been received the Government will decide early next year what further steps are required. My interest in conducting this work reflects my concern about the long-term impact on community funding from the ongoing costs of the current regulatory model for class 4 gambling. It is complex and it is costly and what I want to know is: are there ways of stripping out some of those costs of regulation for operators for venues and for the Government as the regulator of the sector? And that in turn should free up more money to be invested in the community. I want to see a sustainable funding system for good causes that is delivered by trusted and reputable operators and I also want an Act that is fit for the future and that is flexible enough to meet the challenges that will lie ahead.We need to be looking closely at the uptake of online offshore gambling in New Zealand. We know that the availability of more and more gambling products online is challenging—it is challenging the way that gambling is consumed and regulated around the world. So questions come to my mind about what changes are needed to ensure the continued vitality and integrity of our system in the years ahead. The answers to those questions will no doubt prompt a whole range of strong views because gambling issues tend to do that. But this is a conversation I think we need to have about the best way of ensuring the sustainability of what is currently a unique national community gaming model. In the meantime the changes in this bill go some way towards ensuring that the Gambling Act remains fit for purpose as well as ensuring that the money we raise from gambling benefits the community. On that basis I am delighted therefore to commend this Gambling Amendment Bill (No 3) to the House.