Gambling Amendment Bill (No 3) — Third ReadingText is incorporated into the Bound VolumeGambling Amendment Bill (No 3) — Third Reading[Sitting date: 15 October 2015. Volume:709;Page:7309. Text is incorporated into the Bound Volume.]Gambling Amendment Bill (No 3)Third ReadingHon 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.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe Mr Assistant Speaker. It is a pleasure to rise to take a call in the third reading of the Gambling Amendment Bill (No 3). Can I summarise Labour’s position on this bill. In the first reading there were some things that we had great concern about and there were things that we fully supported. I think the passage of this legislation—and we genuinely sat on the Government Administration Committee through that process to try to make this bill the best that it can be. On balance we came to the conclusion that there was more good in this bill than our other concerns and so I stand here to support this bill in its third reading.I want to acknowledge the Minister of Internal Affairs for bringing this all together. I also want to acknowledge him because the key major issue that we had with this bill was about removing the prohibition on commission-based payments for venues. There were a number of submitters on that particular issue and we heard very clearly what their concerns were. I want to thank the Minister because during the Committee stage he made it quite clear that the model that they will end up with under the regulation that this bill sets out to put in place will not incentivise gambling. We will closely monitor that but I want to thank the Minister for making that statement in the House. Also it kind of reinforces that by reviewing class 4 gambling so I do want to acknowledge that as well.The commission-based payments—as I said we did have concerns about that. It could actually incentivise gambling in those venues.For a moment too I want to talk about two particular submitters. I will not give their names but they shared their journey through addiction—addiction to gambling—and it was very humbling to hear them tell their story and also for them to share that information with us. I think it helped us not only to understand their situation but to keep that in our minds while we were making decisions and recommendations for changes to this bill.The transparency issue was another issue that members of the public talked about along with people within the gambling sector. They were very concerned about one particular area around conflict of interest and what that actually meant. From a number of submitters’ views they highlighted the fact that if this particular clause were to stay unchanged then basically all of their workers would not be able to be paid. I think we in the select committee came up with a very good solution to that. It seems to have satisfied everyone so I am very pleased that that particular clause has been able to be included into that and is no longer an issue.I want to go back to the original intent of the principal Act the Gambling Act 2003 at the time it was passed by the Labour Government. The reason why there was a prohibition on commission payment and why it would be on a cost recovery basis was that the true benefit of class 4 gambling was that profits would be distributed to communities. That was the basis of having cost recovery rather than commission payment.As we all know there have been a number of issues along the way around both the distribution of funds. For example as was highlighted by one of my colleagues Jenny Salesa in her electorate in South Auckland Manukau East there are a number of gambling venues but when you see where the funds are distributed they are not distributed totally within her community. So this bill brings greater transparency around the distribution of those funds so that they stay within the community that they are collected from. That is a good thing because that was the original intent of the principal Act.I go back to joining up the issue around the original intent of the bill to make certain that as many funds as possible can be distributed into the communities. This bill—and I have seen the modelling—potentially means that an additional approximately $10 million will be distributed to communities and that is a really good thing. That is another reason why we are supporting this bill.If I can summarise our position notwithstanding that our concerns I think have been greatly addressed since the Committee stage we will still be watching very closely to see what the venue payment model ends up being. I think it is important also to note that a number of submitters were disappointed that more harm minimisation was not included in this particular bill and there were a number of submitters whom I have mentioned in earlier readings who promoted the idea of a pre-commitment system for gambling. We certainly hope that that becomes part of the Minister’s review into class 4 gambling because I think that is a very important issue—that we ensure that we put every possible mechanism in place to ensure that the harm caused by gambling can be minimised. This seems to me to be the most effective way of doing that for class 4 gambling—that gamblers have to pre-commit to a maximum amount of money that they are willing to use or to spend on class 4 gambling which is loaded on to the card and a maximum amount of time. The technology as I understand it already exists for that to happen and so we would be hoping that in future review any legislation that comes from that review would include those sorts of measures.So as I said I am pleased to take this call in the third reading of the Gambling Amendment Bill (No 3) and I commend this bill to the House. Kia ora.MARK MITCHELL (National—Rodney): I am very pleased to take a call on this the third reading of the Gambling Amendment Bill (No 3) and I would like to acknowledge the Minister of Internal Affairs and his officials for the hard work that they have put into this bill. It is actually a really important bill because it is around transparency. It is about reducing compliance and red tape. It is about making sure actually that the money and the funds find their way back to the community through the sports groups the community groups. Actually removing the debate around pokie machines that money and that funding is actually really important to them. I am talking about groups like Surf Life Saving clubs sports clubs and clubs that are delivering services in our communities. So it is actually a really important bill. It is a very good bill.In terms of trying to get transparency around the management fees to me—and I have spoken about it before in the House—this is fundamentally a really important part of this bill. In my own experience—certainly overseas and having seen some NGOs’ work—when you actually do a breakdown and when you actually look at every dollar that is donated sometimes you see as little as 5 or 10 percent of that money actually finding its way back to the community. The rest of it is absorbed in management fees. So the fact that this bill addresses those types of issues is actually really important. We want to see as much money as we can going back to the communities in which those pokies reside.I just want to acknowledge the fact that I think was raised earlier by the previous speaker Adrian Rurawhe around harm minimisation. We did hear a fair bit of evidence on the committee around harm minimisation and I think actually we are moving in the right direction on that. There are some very good technologies that are becoming available like facial recognition technology which removes the necessity for the actual workers inside the licensed premises to have to monitor that and sometimes put themselves in a position of conflict or confrontation. These technologies are becoming available and as they become more cost-effective they are going to reduce a lot of those issues. I would just like to confirm again and acknowledge the Minister for bringing this bill to the House. It is an important bill and I am very happy to support it in its third reading. Thank you very much.IAIN LEES-GALLOWAY (Labour—Palmerston North): As my colleague Adrian Rurawhe has already outlined Labour continues to support this legislation although we do have some reservations about the commission-based payments.We certainly support the increased transparency and the increased focus I suppose on ensuring that as Mark Mitchell said the money gets back to the community organisations that so heavily rely on the money that is raised through gambling. I say this most times I talk about gambling and I do not mind saying it again: I think it is a bit odd that so many of our community organisations do rely on money that is raised through gambling. It is essentially a tax in some cases on some of the poorest and most vulnerable in our society in order to fund organisations that are doing good work in our community. You know it is not the only way we could fund it. There are a variety of other ways that we could fund those NGOs those organisations that are doing such wonderful work. Over time it has become normalised in our society that we fund them through gambling but it does not have to be that way although in saying that I am no prohibitionist. Gambling is like a lot of other things that can be a lot of fun. It can actually provide a lot of entertainment but it does come with harm so we have just got to acknowledge that gambling does cause harm in our society and when we are trying to figure out the legislation and the regulations that go with it there is a bit of a balancing act there.We think on the whole that this Gambling Amendment Bill (No 3) gets the balance about right but we have got some concerns around the use of commission payments to fund venues that have particularly pokie machines and we have rehearsed some of these arguments before. A lot of submitters who went to the Government Administration Committee—quite rightly I think—suggested that if the more that gambling occurs in your venue the more money you get that possibly creates an incentive to encourage a greater level of gambling and to have more machines. We do not disagree that the system of payments to venue owners had to change. There is an incentive in fact under the current system to inflate your costs—to inflate your apparent costs—in order to get the highest payment possible out of the machines.So we certainly applaud the moves away from that type of regime but there are concerns about the commission-based payments. Obviously exactly how the commission-based payments are going to work is actually left to regulations and the Minister of Internal Affairs has indicated that he is going to carry out a review of class 4 gambling in general and of course those regulations will be open for consultation. We will be looking very closely at how those regulations are formed and we are sure that the public and interested parties will be looking closely at this as well.One option that is available to the Minister when he is considering what those regulations look like is to have some sort of cap on the commission-based payments. You could have a percentage commission but that may then have a dollar-value cap. So you can take a commission up to a certain dollar value and then if you have a greater volume of gambling that would take you past that dollar value on the commission basis there is nothing to be gained from doing that. That could be one way of disincentivising an aggressive approach of increasing the volume of gambling that happens in the venue.So there is still plenty of opportunity for consideration of these matters there is still plenty of opportunity for consultation and we will be looking closely. We look forward to the opportunity in fact to work closely with the Minister on getting those regulations right so that we can get a win-win situation where we move away from the negatives of the current system but we do not venture into some negatives and some unintended consequences of the potential new system.There is something missing from this legislation and many submitters pointed this out. We certainly continued to promote the idea that we should introduce a pre-commitment system which means that gamblers can set their own limits on duration on frequency and on the amount that they are prepared to lose from their gambling. We understand that the technology is well and truly available for this to happen already. Again gambling can be something that is quite a lot of fun. It can be something that people go into with the best of intentions of not getting carried away and of not getting out of control. They may start off with a certain amount of money in their back pocket and they think “I can lose that.” but then when they get into the roll of things—there are the lights there is the sound there is the whole thing that is actually designed to make you keep coming back—it is off to the EFTPOS machine to get a little bit more. Just one more hit one more hit one more hit and people end up spending a lot more than they had anticipated. That can often be the grocery bill it can be the rent it can be the power bill—it can have quite a significant impact on their family on their loved ones.The pre-commitment system seems to be a good strategy which a lot of submitters came to the committee and suggested that we should have. So we think it is a disappointment that it is not in this legislation. It is a missed opportunity and it would have fitted well in this legislation to introduce a pre-commitment system but again we are interested in working with the Minister to see if there might be a future opportunity to bring such a pre-commitment system into place.Many submitters articulated their concern about the lack of measures in general to address the harm caused by class 4 gambling in particular and gambling in general. And we do think that we need a greater focus on harm minimisation than what has been achieved in this legislation. We certainly applaud the greater transparency we applaud the fact that there is a focus on ensuring that that money does get back to those NGOs but the truth is that gambling does cause a large amount of harm in our society and it causes financial harm often to those families who can least afford to be put under any more financial pressure than what they already are.We think there is plenty of work that still needs to be done and we applaud the steps that the Minister has taken thus far but as I say we do think there is more that could be done so we support this legislation with some reservations but a certain amount of hope that there is more action that we will see in the future.BRETT HUDSON (National): It is a pleasure to rise in support of this Gambling Amendment Bill (No 3). It was a challenging bill to work on—I sit on the Government Administration Committee. It is actually a three-way balance because we have the reality that many Kiwis enjoy gambling and do not suffer any harm from it. There is about $700 million a year expended on class 4 machines but then again there is a small group of people who have gambling problems and who clearly do experience harm as a result of their problems with gambling. But the third arm if you will in this balance is in actual fact the good that is returned to the community through class 4 gambling. The amount in 2013 was $246 million returned to local communities for sports and community groups—so for public good within those communities.As a committee we had to balance the idea that there is the entertainment aspect there is the community good and there is the potential for real harm. The data shows us which again is a challenge in itself that the percentage of people with genuine problem gambling is about 0.7 of 1 percent. So as a percentage it is not a large group of people but the reality for that group of people is that the problem is extraordinarily serious and quite wide ranging in its impact not only on them but on their families. The committee worked together to work out how we could bring a bill back to the House that would deliver the things we want it to deliver particularly around increasing transparency of grant making—sunlight is the best disinfectant—so that we can avoid rorting and distortions. But actually within that another great part of that is that there are elements in the bill that will ensure that the maximum amount of funds possible will be returned to the local community where the gambling took place. I think that is a fantastic change.Along with that we are making sure that we are reducing potential conflict of interest situations with the societies the venues and the grant recipients improving transparency around management companies—that was an area where it was felt that not to put too fine a point on it some cost rorting could have been undertaken—and also simplifying compliance and reducing costs.Here is what I wish to just talk about—this commission payment thing. The Minister has pointed out that this is an area that we want the Department of Internal Affairs to give advice on. But the evidence is that the rates of problem gambling are similar in Australia to what they are here and yet Australia does permit large amounts of profit actually to be made from this sort of gambling. And there are similar rates in places like Britain Canada and Sweden. Similarly Lotto is a commission payment - based system and there were no reports through our process that that commission-based system was creating any perverse incentives or bad incentives for Lotto operators to seek to extract more money out of gamblers.Also because I encouraged them to take an evidence-based approach to their thinking Professor Bill Abbott pro vice-chancellor and dean at the Auckland University of Technology who in his submission said he did not favour a commission-based system did acknowledge that there is no evidence that provides any causal sort of proof or evidence that a commission system will result in negative incentives. So I do encourage the department to take that into its thinking. But in the end what I would say is that I think we have returned a very good bill a very sensible set of changes to the House and I commend this bill to the House.DENISE ROCHE (Green): I rise to take a call for the Greens on the third reading of the Gambling Amendment Bill (No 3). Unfortunately we will not be supporting this bill. In the first reading of this bill when it came to the House we did support this bill to the Government Administration Committee. We supported it to the select committee because without a doubt there are some good things within the bill itself. However since then there has been no movement from the Government to try to reduce some of the issues or mitigate some of the issues that we raised and that submitters raised as well during the select committee process around how this bill and the provisions in it could actually contribute to problem gambling and problem gambling incidences. So for that reason it is impossible for the Greens to support this bill in its final reading.At the Government Administration Committee we had compelling evidence and compelling submissions from people who were talking about the potential for some of the changes in this bill to create more gambling harm than there currently is. Despite that evidence and despite arguing for changes to the bill during the deliberations in the select committee and despite me putting up Supplementary Order Papers that would remove that particular provision in the bill—despite all that we come to the House for the third reading and it is a bill that we cannot support.We agree with many of the parts of this bill that others have already spoken about. For example we agree with the aim to increase transparency around grant-making. That is great. We agree with reducing potential conflicts of interest. We think that is also reasonable. We also agree with improving transparency surrounding management companies that provide societies with services—things like grant-making and grant applications. We agree with that. We agree that we should be ensuring that there are efficiencies around the appeal process and that it is not undermined. These are all parts of the aims of this bill and we agree with all that. We even agree to some extent with the aim that was stipulated in this bill of simplifying compliance and reducing costs for societies and venue operators in some areas.But this is where the deal-breaker is. Previous speakers—and I refer to my previous speeches—have referred to the fact that this bill amends the Gambling Act of 2003. If we look at what that principal Act is designed to do and I have spoken about this before its intentions its aims include preventing and minimising harm from gambling including problem gambling and also facilitating responsible gambling. But we believe that with this bill with the removal of the prohibition of commission payments to be paid to venue operators that cuts right across the aims of the original and principal 2003 Act.What we have had in the Act since 2003 for all this time actually has been that the compensation for venue operators should be based on actual and reasonable costs. That is fair enough. My understanding is that the reason for this is that class 4 gambling in pubs should not be the sole reason for pubs to be open. They are a venue in themselves. They are an entertainment in themselves. The costs that are associated with hosting gambling machines on their premises should be reasonably minimal. I agree that it is fairly complicated—the whole situation of how you assess what is “actual and reasonable costs”. However the Department of Internal Affairs and the gambling compliance unit have been working for years with the industry with venue operators and with gambling societies themselves to attempt to try to simplify and educate the venue operators on ensuring that they are getting paid the right amount for actual and reasonable costs.If we remove the prohibition on commission-based payments for venue operators we are changing the focus to potentially a position where it could change the focus for venue operators so that they are more profit-driven around the money that is lost on gambling machines on their premises. There would be an incentive and I think others have talked about this for venue operators to not intervene to not undertake their host responsibility for gamblers who may be experiencing limited control over their gambling at those machines. It makes sense I guess. If there is an incentive for the venue operators because they are going to get more money as a result of the profits from the machines then they will want people to keep gambling regardless of the state they are in. That cuts right across the Gambling Act of 2003 and the requirements in there for venue operators to be really good hosts—to be able to identify problem gamblers on their site and to intervene and do something about it.We already know that many venue operators have got a very poor record around their host responsibility. We know this and it was talked about a lot during the select committee process. We know this because a year or so ago—a year ago—the Department of Internal Affairs gambling compliance unit undertook a mystery shopper experiment. They visited 102 venues and tested the host responsibility programmes at each of these venues. Essentially what they did was they had a person play the machines in these venues and that person would start to exhibit the classic symptoms the classic traits of a person who is experiencing problems with their gambling. That was things like the person saying “I really should go home but I need to win some money back.” or that person would bang the machine in frustration. So there were 102 venues tested which is a decent sample. Only one venue passed the test of host responsibility.There are other provisions in this bill that say we should be rewarding good behaviour by extending licences for venue operators and societies as well. But actually the evidence that we have seen is that the behaviour has not been terribly good so far. Why? I have never got an answer to this. Why would you relax the rules when you have not seen the good behaviour so far? Surely we should be regulating so that people lift their standard of behaviour to where we want it to be before we offer rewards.This is a lost opportunity and we are deeply regretful about this. This is a lost opportunity for this Government to have actually put in place some mechanisms in the legislation that would deal to the harmful products that gambling machines are. We have heard previous speakers say that is actually only 0.7 percent of 1 percent of the population who have problems with their gambling. Well that is actually true of the general population but the percentage is much much higher if those people are regular gamblers. We have lost an opportunity to put in some decent legislation to prevent problem-gambling harm. We could have introduced pre-commitment cards and player tracking. We have not done that. What we have done is ensure that more gamblers are harmed.CLAYTON MITCHELL (NZ First): Thank you Mr Assistant Speaker. Sorry Mr Williamson I think you might have jumped the queue here a little. I stand on behalf of New Zealand First to speak in the third reading of the Gambling Amendment Bill (No 3). We are in a position where we want to make it very clear to the people listening and help them understand what our position is. We do not condone any form of liberalisation of gambling. We need to make sure that we have done everything that we can possibly do to tighten up and regulate this sector this industry particularly. We cannot actually support this bill as it sits on the Table at the moment although there are some very amiable qualities within this bill that New Zealand First supports. Listening to some of the speakers and what they have got to say there have been some very good contributions today and certainly some well-planned discussions on it. We have gone through many of these before.This bill particularly though has come a long way from the first chance that I had to speak on it in the second reading to where it is now. So coming out of the select committee in the second reading and then going through the Committee of the whole House to as it sits on the Table it is a completely different bill from what we first looked at. Although we still are not supporting this bill I would like to talk about the main reason why we cannot support it and also to talk about some of the positive things that this bill has in it.Before I get to that I think we need to address some of the things that have been brought up in the House about harm minimisation. It is very important to note the trajectory the way in which we are travelling and tracking downwards in this country in respect of the number of gamblers who are suffering from gambling issues and that harm that we are starting to move into a much more reduced space on. The statistics of the actual gambling community—if that is the right term—show that 0.03 percent of gamblers have a problem with gambling. There is nothing that breaks down what that constitutes—how much of it is actually involved with class 4 gambling how much of it is involved with the casino how much is involved with TAB. The elephant in the roomnow of course is online gambling and then of course you have got Lotto and very many other forms of gambling. So to throw stones at an industry that I think is strongly tracking in the right direction is the wrong thing to do.Nothing—not a single thing—in this piece of legislation the Gambling Amendment Bill (No 3) does anything to help problem gamblers not only with class 4 gambling but least of all to put conditions around the Skycity Casino which is basically a law unto itself. It has been given an opportunity to print copious amounts of money. There is no openness and no transparency—The ASSISTANT SPEAKER (Lindsay Tisch): We’re not on casinos.CLAYTON MITCHELL: Thank you Mr Assistant Speaker. To me that is very hypocritical when we are coming down so hard on class 4 gambling. Every cloud has a silver lining. The silver lining to class 4 gambling in this particular instance is the fact of what it does for our communities in so far as the help that it actually commits—$250 million - odd. That number is coming down—the amount of money that is being given to communities sporting clubs cultural clubs schools arts clubs and the plethora of other community groups and organisations and events that use that money to help get those events under way. I do not believe that that is a tax—as was said by Mr Iain Lees-Galloway—on the poor people. The vast majority of people—as we have already outlined and agreed on on both sides of the floor—actually gamble willingly and have it under control. The position that we hold is that we as a society need to be doing absolutely everything possible as a Government to ensure that we capture and help those people who need the help—which again this bill does not particularly address and I think that is a larger issue—the helplines etc. where somebody can go to actually help themselves get through it.We have heard of facial recognition technology and pre-commit cards. They have tried player information display systems and PODs in certain outlets to see whether having breaks in between gambling is going to help. The reality is that this will actually help drive the people who like to gamble into those large casinos. This is not going to do anything but shut down some of these small operations. We have heard from the Greens saying that these bars operate with the basis of their business being gambling. Well that has been long outlawed. That stopped in the early 2000s. If your primary business in a licensed premises was to have gaming machines and secondary was food and alcohol then of course those licences were revoked. Your primary business in licensed premises whether it be an on-licence or a club is entertainment social engagement—having a beer watching the rugby catching up with your friends having a meal or whatever. Subsequent to that obviously some of those facilities allow themselves to have a gaming machine room. Of course that is putting as much money back into our communities for those community groups that need that money the most.The reason why we cannot support this bill—we put in an amendment at the Committee of the whole House stage adding section 30A to the bill through Supplementary Order Paper 95. We would like to say that it was close but we were the only party that actually voted for it. But it was close in so far as there have been some changes already around allowing commission-based payments to licensed premises as being a way of funding it. “Reasonable actual and necessary” is an absolutely antiquated clunky and ambiguous way of trying to determine how much we are going to pay as a site rental for those premises that choose to have them. The reality is that payments do need to be made. There are costs involved in hosting those machines. There is good that comes out of parts of this sector of the market of class 4 gambling. So we cannot support it because of course the ability to charge 1.5 percent of the gross turnover which is in line with other areas in the gambling sector—TAB and Lotto for example; it is in line with that—was shot down in the House. So we will not be putting our support into this.I would like to now just get to a couple of things that New Zealand First does commend within the bill which I think are very commendable aspects of it and one of them is openness and transparency. Nobody wants to see behind-door deals with societies and with bar owners or operators or licensed premises and those community groups that are seeking funding. Over the decades because there has been about 20 years of this going on there has been a small group of people who have taken advantage of this silver lining in the cloud if you like and taken it for their own personal gain as opposed to what it was designed for. And they have given the industry in my view at times a bad name. It has come up a few times and I can certainly give you some specifics. But I am not here to go into those specifics. Most largely this industry is acting well and truly within the confines of the law and the intent that it was designed to do.But having it open and transparent understanding how those grants are allocated and making sure that there is no degree of separation or any—what is the term that they use—conflicts of interest when those grants have been made I think is a very commendable thing and certainly well supported by New Zealand First. The simplification in compliance I think is very important and over the years what I have seen with some of those Department of Internal Affairs inspectors is that the laws have been open to interpretation. And those Department of Internal Affairs officers and inspectors who have come into licensed premises to inspect them have had completely conflicting and differences of opinion from one operator to another and from one Department of Internal Affairs officer to another. So tightening that up certainly and simplifying that aspect is going to be a great help to the people who could certainly be affected.Finally I will finish by saying that having the improvement in the efficiency for appeals more open and transparent is certainly going to help things as well and will make this industry more streamlined moving forward into the future. We are very sad to say that we cannot support it. We made our position very very clear at the start with regards to the 1.5 percent commission payments for site operators. That was certainly not an over-the-top figure but one that we thought was balanced and certainly was easy to figure out. But in saying that our support does not go with this bill. We support a majority of what is in it. Thank you.Hon MAURICE WILLIAMSON (National—Pakuranga): Can I start by first of all thanking our whips for giving me another slot in the drive time audience show because people will be listening quite intently. I can tell them that all is flowing well on the south-eastern arterial and the Pakuranga Highway and you will be home within another half an hour to an hour. I feel a little bit like Selena off Breakfaston TV. I have got the iPad in my hand and I am giving them traffic updates—but back to the bill.I am not going to take a long time on the bill because it seems like it is a pretty sensible bill. It seems like it is something that was overdue to be sorted out to improve transparency. I will just explain to the drive time audience what this is about. It is about class 4 gambling. If you check on 10 people at random down on Lambton Quay they will not know what that means. It is just to do with the pokie machines in pubs and clubs. We give them that fancy name of “class 4”. It is about the fact that there is money earned from those machines and then how it gets back to be distributed to community groups and organisations. I guess that every one of us could imagine just how murky and even how corrupt that process could get if there were not some really good sets of rules around it.So the Government has got a really important primary focus in any of the gambling legislation which is to make sure that the Gambling Act is working properly for both operators and for the benefit of the community and that we are minimising any harm to people in terms of the problem-gambling side of it. So what this bill does is it increases the transparency that is in the regime that will be there. So as money is collected from these machines and then redistributed back through to the community it will be a very very transparent process and anyone who wants to—including enforcement agencies—can go and check on those numbers and see what is happening. It should reduce the potential of conflicts of interest situations between class 4 gambling operators—which are the societies as we call them—and the venues and the grant recipients. Again you want to make sure that there is not someone who has got that conflict of interest and who benefits substantially by also being the provider of the gambling outlets. It improves transparency surrounding management companies that provide societies with services. It simplifies compliance and reduces costs for those societies and the venue operators—and that could only be good if we make it as simple as we can make it—and it ensures that the efficiency of the appeals process is not undermined. I think that is all I want to say about the bill. I think it is a damned good bill and I commend it to the House.KEVIN HAGUE (Green): In 1996 I think it was—it could have been 1997—I was working as an independent consultant and I was commissioned by the Northern Regional Health Authority on behalf of the national Committee on Problem Gambling Management to undertake some qualitative research as to what health services would be required for the health sector to be able to deal with problem gambling. Responsibility at that time was shifting to the health sector. So the health sector reasonably wanted to know what it was going to cost and what it needed to do. I spoke to the providers of gaming services as they call themselves—“gambling services” I would say. I spoke to regulators and the Department of Internal Affairs. I vividly recall opening the lift door on to an open-plan office where the Department of Internal Affairs inspectors were all housed. On every single computer screen that I could see someone was playing solitaire—literally 20 or 30 of them.I spoke to the people who provided treatment services for people with problem gambling addiction and I spoke to those people themselves and to their families and I recorded what was pretty much a miserable tale of devastation in people’s lives. The Committee on Problem Gambling Management interestingly was not very happy with my report because I suggested that the cost of providing those services—the services those people needed—would be very considerable.The problem of problem gambling is now better quantified than it was then. So we know for example that category 4 was not really a problem back in 1996 but in the year to September last year people lost in excess of $800 million on pokie machines. I used to run a district health board. The budget for my district health board was $120 million. So the budgets of five or six district health boards were lost on pokie machines. That is extraordinary. We also know from the estimates made by treatment providers and public health experts that something like 40 percent of those losses are from people with very little control over their gambling behaviour—so the budgets as I say of a couple of district health boards.The pokie machines—category 4 gambling—are designed to exploit that weakness. They are designed to exploit the weakness of people with little or no control over their gambling behaviour. Pokie machines are designed to provide that intermittent reinforcement and to give the sense of something mechanical actually happening when of course it is not. The operators of those machines have designed a science in fact of encouraging problem gambling behaviour and maximising the losses that those people will sustain. We know what to do about it. We know that pre-commitment cards for example would make a difference. We know that real-time player tracking would make a difference. We know that adequately funding effective short-term intervention treatment services would make a difference. And yet time and again when the opportunity has arisen in this House to make a difference to improve the lives of those people afflicted by problem gambling and to actually do something that would make a difference this House has chosen not to do it. It seems extraordinary to me that that is the decision that we have made but we have.In the first reading debate we said that we would not support this bill at subsequent stages if it continued to revoke the prohibition on paying venue operators by commission. That provision is still in the bill and despite the Government’s bluster the fact is that commission will provide incentives to increase problem-gambling behaviour. This bill makes problem gambling worse not better. We will not support it.PEENI HENARE (Labour—Tāmaki Makaurau): Fakauelahi. Fakalofa atu ki a mutolu oti. Kia ora tātau katoa ka noho ahau ki roto i Te Reo Māori ko te take o tēnā ko te hiahia ki roto i a au nei ki te whakahihiko i tēnā i tēnā o koutou e whakarongo mai ana. Nō reira ka noho ahau ki roto i Te Reo Māori me te hiahia kia kōrero ki tēnei pire e pā ana ki te mahi petipeti. Anā ko te mahi petipeti kua kōrero nei te Whare mō ngā tino mate kai roto i tēnei mahi. Kua kōrero mai te mema mō te Rōpū Kākāriki i tēnei take. He nui ngā painga kei roto he nui ngā hara kei roto.I āianei nā ka tiro atu ahau ki te pire ka mihi atu ahau ki te Minita me tōna hiahia ki te whakatika i tēnei tū āhuatanga. Ka tautoko ahau i ngā kōrero o tōku hoa nei ā me te mahi i oti i a ia ki runga i te rōpū whiriwhiri i tēnei take. Ko tēnei take he take ka pāngia ki roto i tōku rohe nei o Tāmaki Makaurau ā ki roto i ngā kōrero o tōku kāinga anā ka tau ki roto i Te Tonga o Tāmaki. Nō reira he take tino nui tēnei.Anā ka whakaaro ake ahau mō ētahi o ngā kōrero. Ka tautoko ahau i te kōrero e mea atu ana: “Ka kōataata ngā mahi o tēnei pire.” Ko te tikanga o tērā kōrero ko te hiahia kua kōrero nei te Whare mō te rahi o te pūtea ka whakapaua ki runga i tēnei momo mahi arā te mahi petipeti. Ko te hiahia kia kōataata te titiro atu o te hunga o Aotearoa nei ki ngā mahi pūtea ka uru atu ki roto i ngā mahi petipeti ka mutu ka tohaina atu ki ngā rohe ka tohaina atu ki ngā hapori me ngā kaupapa pai kei roto i te hapori. Nō reira e tika ana ka mihi atu ki tēnei wāhanga ki roto i te pire kia kōataata nei te tirotiro ki ngā take.Anā ka huri te whakaaro ki ngā mahi tohaina e mea nei te pire ko ngā mahi tohaina i te pūtea ki ngā hapori ki ngā kaupapa o te hapori. Kua kōrero mai te Whare mō ētahi o ngā take e pā ana ki tērā wētahi i roto i ngā tau kua pahure ake nei. Ka mea mai wētahi anā ko te nuinga o te kōnae pūtea ka tomohia ki roto i Te Tonga o Tāmaki ēngari ko ōna pūtea kei roto ka toahina atu ki wāhi kē. He tino raruraru tērā! Nō reira i āianei nā ka tiro atu ahau ki roto i te pire ka whakatikatika i tērā atu āhuatanga. He mea pai tēnā ā kia hoki atu te pūtea ki ngā hapori. Koinā te mea pai o tēnei pire. Nō reira ka mihi atu ahau ki tērā tū āhuatanga.Anā ka whakaaro ake ahau ki wētahi o ngā āwangawanga kei roto i a mātau o te Rōpū Reipa ahakoa tō mātau tautoko i tēnei pire.Ka whakaaro ake ahau ki wētahi o ngā āwangawanga kei a mātau. Ko tētahi nā kua kōrero mai te Whare nei mō te rāhui mō ngā tāngata kei a rātau wēnei mīhini petipeti nei. He tino take tērā ki a mātau! Ēngari ka tautoko ahau i te whakatau o te Minita e mea atu ana āianei ka tino aro haehae i ngā mahi petipeti whānui nē kia tiro atu ki te pikitia whānui nei. Ā nō reira ka mihi atu ahau ki tērā āhuatanga ēngari kei roto tonu te āwangawanga i a mātau. Nō reira i roto i te roanga ake o tēnei kaupapa ka āta tirotiro ka aro haehae mātou i taua take. Me tā matau tono atu ki te Minita anei hoki te Rōpū Reipa me te hiahia kia āwhina atu i a ia i tōna mahi aro haehae i tēnei take.Hai whakakapi ake ka mihi atu ahau ki te rōpū whiriwhiri nā rātau te kiko o tēnei pire i whakarite ā ka whakaaro ake ahau mō te pūtake o tēnei pire nā mātau nā te Rōpū Reipa i whakarite i te tau 2003 nō reira i āianei ka whakatikatika i wētahi o ngā tū āhuatanga. Ka whakaae mātau tēnā koe.[Greetings to us all. I will remain speaking in the Māori language the reason being that I really want to energise each and every one of you listening in. And so I will remain speaking in Māori as I want to address this bill relating to gambling. Now as far as gambling is concerned the House has commented on the real problems in this practice. The member for the Green Party has spoken to us about this matter. There are many benefits and faults in it.And now I look at the bill and commend the Minister of Internal Affairs for his desire to amend this type of situation. I endorse the sentiments by my colleague here and what he accomplished on the Government Administration Committee which considered this matter. This issue impacts upon this Tāmaki Makaurau electorate of mine and the conversations in my home and the discourse in South Auckland. Therefore this is a serious issue.So I reflect on some of the contributions. I endorse the discourse that states: “Practices of this bill will be transparent.” The meaning of that reflects the desire thatthis House commented on about the size of the funding spent on this kind of activity—gambling. There is a desire that those here in New Zealand be transparent when examining funding practices that are entered into in terms of gambling activities and furthermore when distributed to regions communities and worthy projects in the community. Therefore it is apt that I commend this part in the bill in that the examination of issues is transparent.The thinking turns now to distribution practices advocated by the bill—to those related to distributing funds to communities and to community projects. The House has spoken about issues related to that in years gone by. Some told us of other issues concerning the funding package loaned out in South Auckland but where the funding in it was distributed elsewhere. That is a very contentious issue! So I examine the bill right nowto amend that kind of situation. That is a good thing; it enables funding to go back to communities. That is one of the advantages of this bill. And so I commend that sort of situation.I reflect now on some of the concerns within us the Labour Party despite our support of this bill. I give due thought to some concerns of ours. One such is a restriction that this House related to us that will affect individuals who own betting machines. That is an issue of most concern to us. But I support the ruling of the Minister which states that general betting practices will be critically discerned forthwith when looking at this bigger picture—right? And so I commend that kind of situation but the concern still remains within us. Therefore as this policy extends further we will carefully examine and critically discern that matter. And we will request and say to the Minister that here is the Labour Party with its desire to assist him in his critical discernment of this matter.In conclusion I pay a tribute to the select committee that considered the content of this bill. I spare a thought for the origins of this bill which we the Labour Party considered in the year 2003 so in the meantime some aspects will be amended. We are in favour. Thank you.]JONO NAYLOR (National): If I can pick up very briefly on where my colleague Maurice Williamson left off giving the traffic update only to say that in Palmerston North rush hour is always seen as a positive thing because you actually get to hear the end of the song that you were listening to on the radio before you get home. That is not something that you usually manage to do when commuting in Palmerston North. But I will just come back to the bill of course because I am sure that if I do not do so quickly you will bring me back on track very quickly Mr Assistant Speaker.Over the years in terms of my dealings—whether it be through local government or in this realm—where there has been talk about class 4 gambling or pokies or otherwise there have been three things in particular that people have brought to my attention. The first one has been issues around problem gambling and that has been talked about a little bit this afternoon as well. The two other things that people really talk to me about are their concerns about whether or not the funds that are being spent locally on pokie machinesare going back locally in terms of the returns back to the community and community organisations and whether or not operators are in fact skimming if you like more off the profits or profiteering in some way from these machines when in fact they are only ever supposed to get a cost recovery regime through the process of operating these machines in their venues.I think this bill does some good work in ensuring this and giving some confidence and transparency to communities that where money has been spent on gaming machines in their locality the returns from that will go back to those communities. I think that is a really critical factor. One of the big criticisms of this source of funding in the past is that it has been brought together in one lump and then sent into different communities. As other speakers have said often the money has been taken from communities that cannot necessarily afford it or otherwise so it is appropriate that the money and the proceeds from these gaming machines do go back into those communities. So I commend the Minister of Internal Affairs Peter Dunne and the Government Administration Committee for ensuring that that happens through this process.Of course the other concern is about having a greater level of transparency and accountability for the operators to ensure that they are not using this as a form of income for themselves. I do recognise that for some people it is an entertainment that they engage in while they are in a licensed premise but the purpose of these machines is not for operators to make significant profits. The increased accountability and transparency in this bill around class 4 gambling is I think going to be a positive thing going forward. I am happy to support this bill at its third reading. Thank you.LOUISA WALL (Labour—Manurewa): Kia ora Mr Assistant Speaker. Tēnā koutou katoa. It is my pleasure to speak on the Gambling Amendment Bill (No 3) in this its third reading. I would firstly like to acknowledge my colleagues who sat on the Government Administration Committee Adrian Rurawhe and the Hon Ruth Dyson and other members on that committee who seem to have progressed through the passage of this legislation in a really constructive manner. So I want to acknowledge the select committee. I also want to acknowledge members of the public who took the opportunity to make submissions on this piece of legislation. It is a piece of legislation that actually is incredibly emotional because some of the consequences to families and communities from gambling are not very nice.With my colleague Su’a William Sio in the House I also want to acknowledge that for Manukau we have led the way in terms of responding to the consequences of gambling through sinking-lid policies that our council implemented in 2004. We know and have known that in South Auckland since pokie machines arrived here in 1991 actually the consequences on some of our communities specifically were felt disproportionately.What I would like to share actually is an average spend in terms of some of our ethnic communities. This is quite startling. On average per annum a Pasifika person spends $13468 on gambling a Pākehā New Zealander spends $1761 and a Māori New Zealander spends $2829. So as a representative of Manurewa as a representative of South Auckland I just want to acknowledge the detrimental impact of gambling on our Pasifika community. I also want to acknowledge the work that our Pasifika communities are undertaking to combat some of those consequences. It has been quite interesting for me to read through some of the information related to the impact of gambling because our Pasifika refuges have actually highlighted that it is one of the main reasons that women are entering refuges—because they are coming from homes where the stress associated with gambling is forcing them to have to flee those homes and seek help.Our position on this legislation is that we support it and we support it because at the end of the day gambling has been around since 2300 BC. It actually originated—from what I have been able to read—from China. In fact it involved dice and cards but fundamentally people have engaged in gambling pursuits because they find it fun—it is entertaining. I guess as a society what we are always having to balance is the entertainment of gambling versus the disease and addiction that gambling actually is. Whether we like it or not there are some people who gamble who actually end up having a disease that is incredibly hard to control.In New Zealand gambling is a $2 billion - plus industry. There are four types of gambling that we have in New Zealand: racing lotteries gambling machines—which are these class 4 gambling or pokie machines that this bill is trying to address—and casinos. What I want to say about the context of our class 4 sector is that it is not-for-profit. A lot of money that is reinvested back into the community from trusts like the Trillian Trust—I will use an example from my community—actually comes through pokie revenue.So I also want to acknowledge that what this bill is hoping to do is to ensure that the gambling moneys that come out of specific communities are reinvested back into those specific communities. I guess the basic principle is that people are going to gamble—we cannot stop them—and if they are going to gamble we want to make sure that money that is taken out of that community is reinvested back into those specific communities. We think there is an opportunity through this piece of legislation for that to occur and that is one of the reasons that we are supporting it.I would like to highlight however and in consultation with my colleague Adrian Rurawhe that there was a proposition that there should be a pre-commitment system whereby players can set their own limits on duration frequency and losses from gambling so that people can take some responsibility for trying to moderate how they engage in this issue. I think that the reasons people gamble actually can be quite complicated because they are to do with how people get behaviourally conditioned. There is an emotional response to gambling and so some people gamble to escape their lives. They gamble because it is an opportunity for them to make themselves feel better about their circumstances. So gambling is associated with I guess depression with mental health and with a whole lot of other issues. I think my colleague Kevin Hague really highlighted that in his contribution—that that is the biggest challenge.So what we know in New Zealand is that of the problem gamblers 80 percent of them are actually problem gamblers because they use pokie machines. So it is incredibly relevant that we do focus also on harm minimisation and the options and opportunities that this piece of legislation also balances—balancing the right of individuals and communities to have access to this entertainment but also acknowledging that through access there actually are consequences and it is society’s responsibility to provide those individuals with the help that they need if they are addicts. Because it is a disease—gambling is a disease; it is a medical condition. I think that people fail to recognise that. They just think that people choose to be gamblers but if it is a disease actually you do not choose it.So some of the information that I have managed to find out is that in terms of the addiction research—and any research into gambling is framed around addition—that 50 percent of gambling addiction is predisposed and the other 50 percent is people who have poor coping skills. If you have got poor coping skills—if you do not feel good about yourself—and then you gamble to make yourself feel better what it really means underlying all of this is that we as a society have to help people who have that disposition because they have a disease.So I do not think that this bill has adequately addressed the issue of gambling as a disease. But in saying that I think our balance in terms of deciding to support this legislation was that the changes that this legislation is going to enable do contribute to ensuring that communities are not adversely affected as much as they have been in the past through the lack of specific reinvestment back into those communities from the moneys that have been taken out. I think that there is more to do in this area and I know that my colleague Adrian Rurawhe is particularly interested in it.I think that we can do more as a society to help gamblers who have a disease and who are addicted to gambling. I think that we have got some particular challenges in this space. Essentially there is advertising—the Government is also a contributor to gambling because we have a Lotteries Commission that promotes gambling through the purchasing of Lotto tickets. So we do have an environment that encourages gambling as a norm. So because we do that as I said earlier I think it is also incumbent on us to make sure that anybody who needs help has access to that help. Kia ora.Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the Gambling Amendment Bill (No 3). I am not on the select committee that considered this bill the Government Administration Committee so it is a great opportunity for me to be able to speak on its third reading. For some gambling is fine—it is a leisure activityas we heard—but for others it becomes a problem that leads to numerous negative consequences. The services for problem gambling are funded through a levy collected from various gambling operators. This levy is collected from the profit of the four main gambling operators which are machines and pokie machines in bars and pubs casinos the New Zealand Racing Board and the New Zealand Lotteries Commission. This bill is to mainly bring changes around machines and pokie machines in bars and pubs.We know that gambling leads to devastating effects and this National Government is really keen on reducing the harm that is caused by gambling. Harm minimisation is one of the priorities of this National Government. This bill has additional harm minimisation regulation-making powers that may offer the opportunity to introduce additional well-targeted interventions in the future. This National Government is also very keen to see that the Gambling Act is properly enforced—that is for the money that is raised through gambling to be put back into the community because the policy framework of the Gambling Act is that the money raised through gambling should be put back into the community.This bill is to bring changes around class 4 gambling and this bill is also to simplify the way societies pay pubs and bars for hosting gambling machines and also to ensure that as far as possible the maximum amount of money raised is put back into the local community where gaming occurs. It is a great bill I support this bill and I commend this bill to the House.A party vote was called for on the question That the Gambling Amendment Bill (No 3) be now read a third time.Ayes 91New Zealand National 59; New Zealand Labour 30; ACT New Zealand 1; United Future 1.Noes 28Green Party 14; New Zealand First 12; Māori Party 2.Bill read a third time.The result corrected after originally being announced as Ayes 93 Noes 28.