Gambling Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeGambling Amendment Bill (No 3) — Second Reading[Sitting date: 04 June 2015. Volume:706;Page:4356. Text is incorporated into the Bound Volume.]Gambling Amendment Bill (No 3)Second ReadingDebate resumed from 27 May.Hon RUTH DYSON (Labour—Port Hills): I am really pleased to be able to continue my contribution which was so rudely interrupted when we last debated the Gambling Amendment Bill (No 3). This is quite a significant date for Parliament in terms of gambling legislation. I cannot recall the last time that we did not have a gambling bill of some description either on the Order Paper or with a select committee—it has been a long time. It is great that we have progressed to this stage but it is an indication that gambling legislation in New Zealand will have to keep changing in order to keep up with changing technology and the increasing awareness of the public health issues surrounding problem gambling.I want to commend the Minister of Internal Affairs the Hon Peter Dunne for just about all that this bill contains. Certainly many of the 126 submitters who contributed on this bill during the select committee consideration said that they supported the overall intention of the bill. Many shared one single concern which I will elaborate on in a moment. But my primary purpose with that comment is to say that I think this bill moves a little further in the right direction. This bill could have gone a lot further and I hope the next bill does but it certainly went in the main in the right direction. I am hoping that all of Parliament will agree to its progress perhaps with some changes at the Committee stage. I am certainly going to contribute more on that in this second reading but also at the Committee stage.This is a big change. The fact that Parliament is more or less united over this bill is a big change from how divided the House was—and in fact the whole of New Zealand was—over the last Government intervention in the gambling space which was the outrageously dodgy deal that the National Government did with Skycity. It said to Skycity: “Oh well let’s forget about the law. We’ll change it for you and you can have quite a large number of new pokie machines.”Mr DEPUTY SPEAKER: That is not part of this bill either.Hon RUTH DYSON: Pardon?Mr DEPUTY SPEAKER: All of the Skycity matters that the member is referring to are not part of this bill. It has been kept as a very narrow debate so far and I would like the member to continue in that vein.Hon RUTH DYSON: Mr Deputy Speaker of course I accept absolutely your ruling. I was comparing the response of Parliament to this Gambling Amendment Bill (No 3) with the response of this Parliament to the dodgy deal that the Government did with Skycity and actually I did refer to it in the earlier part of my contribution to this very same reading. That dodgy deal was not supported by Parliament; the Gambling Amendment Bill (No 3) certainly is.I want to refer more specifically though to the provisions that are mentioned in both the Green Party minority report and the Labour Party minority report. I trust that the Minister will give further consideration to the issue that was raised in both those minority reports and that was the primary concern of the overwhelming majority of the 126 submitters—that is we agreed over the issue of payments to pokie-machine operators being currently not good enough. They are quite bureaucratic. They are quite expensive. They are not all that transparent. We thought that we could do better in respect of the payments. Everyone agreed on that. The problem is that in the bill that we are now debating as it has come back from the select committee the new payment regime is not a significant improvement and in fact increases the possibility of there being an incentive for the operators to increase the use of pokie machines. So there is the potential for increased harm due to a provision in this bill. It is that point that I hope will be reconsidered when we go into the Committee stage of this debate and I hope that the Minister will consider the fact that we all agree that the current system is not good enough and that the replacement that is proposed in this bill—it will be an improvement in some areas—will run a huge risk of incentivising increased problem-gambling and increased use of pokie machines. I do not think that anyone in the House wants to go down that track.As I said earlier we had 126 submitters on this bill and a very fine contribution by a large number—particularly from those organisations that work so hard in our community—in response to the harm that pokie machines do to some people. Some people are not able to stop gambling; that is a fact. Some people change their whole life and risk their whole family situation because they are not able to stop gambling. That issue of public health and problem-gambling harm was certainly a consistent message. We heard some very sad stories. We heard from some very courageous people who told of their addiction to gambling and explained to us at a full public hearing the harm that they had caused to their families and what had turned their lives around. They did that in an effort to make us focus on the lost opportunity in this bill—the lost opportunity in this bill—and that is the opportunity to further protect people from the harm that excessive gambling can do.Overall this bill moves in the right direction. That is what all of the submitters said as well as the report from the select committee. We are concerned that the commission-based payment that is now being proposed runs a real risk of incentivising problem gambling and increasing it and we do not want to see that. I will be supporting changes to that and I know that Denise Roche from the Green Party also expressed that view consistently and strongly and was backed up by the overwhelming majority of submitters throughout the select committee process. I hope that our concerns are heard by the Minister. He has shown an interest in listening to the views of members in the past. In fact he and I along with three other members of Parliament were on a panel yesterday with the Business and Parliament Trust and we discussed this very point: the fact that Ministers are generally quire dislocated from the process because the select committee wants to own the legislation.But actually in the end the Minister calls the shots on policy determinations. That we need to get those roles better clarified is my submission to Parliament—not a submission on this bill but you will allow me a little leeway I am sure Mr Deputy Speaker because on Thursday afternoon you are clearly feeling more relaxed than other presiding officers sometimes do on a Thursday afternoon. Some of them are much stricter and I am glad that I am taking my call with you in the Chair rather than my colleague the Hon Trevor Mallard. I look—Mr DEPUTY SPEAKER: Sorry. It is tragic that I have to interrupt the member especially when she was on a roll but unfortunately her time has expired.MARK MITCHELL (National—Rodney): I just want to acknowledge the previous speaker the Hon Ruth Dyson. I think it is probably fortunate that she stopped there. You were starting to blush a bit Mr Deputy Speaker.Hon Annette King: See if you can make him blush.MARK MITCHELL: Ha ha!Mr DEPUTY SPEAKER: Do not bring me into it.MARK MITCHELL: It is a pleasure to take a call on this Gambling Amendment Bill (No 3). I do want to acknowledge Ruth as the chair of our Government Administration Committee which received this bill. She did do a very good job as did the deputy chair Sarah Dowie and the other committee members. One thing that I do actually agree with is the fact that we are probably going to have to continue as a House of Representatives coming back to revisit make changes and tweak this legislation as time goes on just because of the sheer nature of what we are actually dealing with and that is pokie machines which I acknowledge can inflict some harm on people when they develop gambling addictions and issues around the addictive nature of things like pokie machines.I just wanted to address some of the issues that we did deal with in the committee on this bill. The reduction of red tape—this part of it was actually very important to me because I have had some experience overseas with NGOs and organisations that are tasked with delivering aid. If you bear with me just for a moment there is a little bit of relevance that comes back to the bill and that is in terms of the money that is available. We should always be focused on making sure that it is dispersed and it gets to the people the organisations and the charities that actually are going to benefit from it and that it does not actually get tied down in a whole lot of admin expense. Normally the rationale and the excuses that are given around high admin expenses of course always relate and come back to heavy compliance and red tape - type issues. So I think this was actually a really important part of the bill.Getting back to what I saw overseas often there are some very very good and very efficient NGOs that are responsible in the way that they treat donor funds and they make sure that as much of that donor funding actually finds its way on to the mission field or into the area or the project that they are focused on. But there are others unfortunately that can run with anything up to about 70 or 80 percent of that money being absorbed in admin and back-office services which to me is a complete and utter disgrace and a total waste of that money. I think that if people actually understood or knew that they were donating to an organisation like that they would probably review those decisions.So there is a reduction in red tape. A new regulation-making power will specify venue operators’ payments and the prohibition on commission will be lifted for payments to venue operators. That was a very very good clause that we were able to get into and deal with on the committee.There were a couple of other things that we spent a fair bit of time on. I just want to highlight the fact that I was disappointed that I missed the submissions that were heard in Auckland but I was certainly here for the submissions that we heard here in Wellington. One of the things we spoke about was getting a better definition around the term “key person” which I think was really important because we were at risk of actually trapping people who in actual fact were not key persons. We recommended amending clause 4(2) by extending the exception provisions relating to a key person in the new section 4(1). In the bill as introduced licensing trust board members and trustees of community trusts would be captured by the new definition of “key person”. This was unintentional and the amendment we proposed did remedy it. What we proposed was that we also amend paragraph (b)(ivb) of the definition of “key person” in section 4(1) by removing the words “or who may reasonably be perceived to have that ability.” We believe that a reasonable perception provision is unnecessary as only those who could in fact exert undue influence on a key person needed to be captured. I think that was a very important change that we made and recommended through the committee process.One thing that I found really interesting and fascinating comes back to the point that Ruth made earlier which is that we are going to continue to have to review and make changes in terms of the technology that is changing around the use of gambling machines. One of the submitters made what I thought was a pretty compelling submission around the advancement and the development of facial recognition technology which is at a point now where developers are approaching very quickly to a place where they will actually be able to attach—the real issue around it is probably cost—a facial recognition system on to an existing pokie machine. That means that someone who has been identified as being at risk with their gambling can go through a facial recognition process and then be flagged as someone who is actually at risk. I really like that. With the current system—and it works—you are relying on the employees working on the premises to monitor it and a system like this is going to relieve some of the stress and potential tension that can be created between someone with a gambling problem and the staff who are trying to manage and monitor it.So we are going to keep watching that. That is going to keep being developed and I am sure they will come up with some cheaper options and I think that it is probably not too far in the future that we will see this type of facial recognition system being implemented. And that means of course that we will have to come back here and pass legislation in all likelihood to be able to use that technology.The pokies are important. I know that we discuss them a lot in this House. I know there are strong feelings about it. I can tell you now that I am very proud to be the patron of the Ōrewa Surf Lifesaving Club in my electorate of Ōrewa and the funds that we receive through pokies are actually quite important. They get used to buy things like for example new defibrillators and new equipment that can be used by our young surf lifesavers on the beach to save lives. So I do want to highlight the fact that these funds are actually quite important not just for organisations like surf clubs but for lots and lots of organisations and groups such as sporting organisations in our communities.Finally I would just like to say that I personally felt that it was a very good process by which the committee was able to identify and make some good recommendations that will make it an even better bill. Of course I also want to recognise and commend the Minister Peter Dunne for bringing the bill to the House. Thank you.DENISE ROCHE (Green): I rise to take a call for the Greens on the Gambling Amendment Bill (No 3) at its second reading. I am not usually a member of the Government Administration Committee but given that I am the gambling spokesperson I sat in on that committee for this bill in Mojo Mathers’ place. I have to say that it was a well-run committee and I thoroughly enjoyed the robust debates we frequently had there. We received 126 written submissions and heard in person from 33 different submitters. They can be roughly grouped into three different categories. First of all there are the gambling societies and venue operators; second there are those concerned about the impact of gambling on their communities; and third there are the individuals who have been impacted on by gambling as well.I always find it useful when I am looking at a bill particularly an amendment bill to look at the original Act it is amending look at the purpose of the bill and see whether the original Act is going to be impacted on at all by the amendment bill. And that is what I have done in this case as well Mr Assistant Speaker if you will bear with me. The Gambling Amendment Bill (No 3) as introduced to the House was described as having the aims and I think there were four of them of increasing transparency of grant-making from the proceeds of class 4 gambling; reducing potential conflict of interest situations between class 4 gambling operators—societies—venues and grant recipients; improving transparency surrounding management companies that provide societies with services such as for example contract negotiation with venues administrative and financial management or grant application processing; simplifying compliance and reduce costs for societies and venue owners in some areas; and lastly the fifth one was ensuring the efficiency of the appeals process is not undermined. It sounds great—this bill sounds great—and actually most submitters agreed that increasing transparency in the grant-making process reducing conflicts of interest improving transparency with management companies and having a more efficient appeals process were all worthy causes. But many submitters shared the concern that I also have about the aim of the bill that is intended to “simplify compliance and reduce costs for societies and venue owners in some areas;” and I will talk about that more in a minute.If we measure the aims up against the original Act the 2003 Gambling Act the purpose—in part; these are just a few of the purposes that I will outline here—is to: “(a) control the growth of gambling; … (b) prevent and minimise harm from gambling including problem gambling; and … (d) facilitate responsible gambling; and … (g) ensure that money from gambling benefits the community;”. Many submitters were extremely worried that if the select committee were to remove the section in the original Act that prohibits commission-based payments for venue operators under the guise of simplifying compliance and reducing costs for societies and venue owners the bill would undermine the original intent of the Act to prevent and minimise gambling harm facilitate responsible gambling and ensure that the money goes to the community. Basically if venues can be paid for by commission there is an incentive for the venue operator to ensure that people continue to gamble as much as possible. It means that host responsibility programmes could easily be compromised by unscrupulous venue operators wanting to maximise the returns on the machines that they have got on their premises.We already know that in class 4 venues host responsibility offered to gamblers on pokie machines can be sadly lacking. Many submitters pointed to the mystery shopper experiment carried out by the compliance teams in the Department of Internal Affairs at the end of last year. This was the experiment where mystery shoppers went to 102 different gambling venues and pretended to display the kind of behaviour that you would see with someone experiencing problems with their gambling or having little control over their gambling behaviour. Only one out of those 102 venues actually intervened and displayed good host responsibility. I think we have to congratulate the Department of Internal Affairs on taking that proactive response on compliance.Hon Ruth Dyson: Not funded enough to do anything else are they?DENISE ROCHE: Yes. Without a doubt the current system of paying venues which is covered by very strict regulations that can be very complicated relies on venue operatorsbeing paid actual reasonable and necessary costs.I also want to note that the Department of Internal Affairs has been very busy since 2009 working with gambling societies on standardising venue cost schedules during what it called its resubmission project. Its 2013 report included recommendations around the calculation ofvenue payments including calling for a full review into initially adjusting limits to cover wage increases and inflation. The recommendations however did not in any way suggest the radical and really risky move of removing the restriction on payingvenues by commission. I note also that the department’s project resulted in the best data it said that it had ever received but it also said that the work it did on that was set aside when it started to work on this bill.I think we have to remember that the money that goes tovenue operators and gambling societies is money that is not going to the community. It is money that is not going to the lifesaving club. It is money that is not going to sports or education organisations. This bill presumably is about wanting to increase the amount of money that the community uses so it does not really make sense to have a commission-based payments system. The Greens are also very concerned about extending licences to operatorsfor 3 years as an incentive for good behaviour. I guess we would feel a whole lot better about that if there had been more pokie venues displaying good behaviour during the mystery shopper experiment. We know that compliance can be very poor in this sector. I would suggest that those provisions in the bill be set aside and put on hold until the industry shows that it can be responsible.When the bill came to the House my colleague Kevin Hague spoke on it as I was away. He said that commission-based payments would be a deal-breaker for the Greens. Despite the convincing arguments from submitters the select committee has by majority decided to keep those provisions in. We will be putting forward Supplementary Order Papers on this issue as will colleagues from Labour because we are really concerned that the venue commission payments system will without a doubt increase problem gambling. We have got an estimated 40 percent of the money—all the money that is lost on pokies—coming from people with little control over their gambling behaviour. This is how the money for communities and charities is made. When we have got 40 percent of that coming from people with gambling problems then I think we need to do better than we are doing in this bill in not opening those people up to more gambling rather than less.Equally bad is the fact that this bill is a lost opportunity to actually really do something about problem gambling—like introducing a pre-commit card system which would allow people without harmful behaviours to have a flutter without the risk of becoming problemgamblers. It would become a huge handbrake for anybody who was at risk of becoming a problemgambler. This is a better and cheaper solution to problemgambling than facial recognition technology which actually acts as a way of stopping people who have already got problem-gambling behaviours. The pokie machines have already sucked them dry. We have lost that opportunity to introduce some good gambling harm prevention measures and things like real-time player tracking which would also look at how people are behaving while they are at the machines.If this Government was serious about dealing with gambling harm then it would take the opportunity to fix what has become a dangerous product. As it stands we cannot support this bill and we encourage every other party to also vote against it.CLAYTON MITCHELL (NZ First): I rise on behalf of New Zealand First to take a call on the second reading of the Gambling Amendment Bill (No 3). It is a bill that I have been excited to stand up and speak to. In fact the last time I stood up and spoke to this piece of legislation Mr Iain Lees-Galloway got himself into such a state that at one stage I thought he was going to have a coronary. So before coming into the House today Mr Iain Lees-Galloway I checked that we have actually got a defibrillator on standby. In case you raise your temperature we can actually resuscitate you. I would like to also say we would like to be able to support this piece of legislation. New Zealand First would like to be able to support this piece of legislation and with a little bit of mild tweeting—to use Judith Collins’ terminology; just a mild bit of tweaking—I think we could possibly get to a state where New Zealand First could get to a position where we do actually support this.There are a number of clauses in this new piece of amending legislation that do actually benefit the community and the overall need to return as much money as we possibly can to the people within our community who need it the most which is a big topic of recent times. In fact in question time today we spoke about the volunteers in the rural fire brigades who are out there accessing some of the money that is gained by class 4 gambling to buy those defibrillators which Iain Lees-Galloway I hope will not have to use today. There are those surf clubs that Mark Mitchell has spoken about that use it to buy equipment that saves lives. There are also community groups church groups and schools. Just about every sector of our community receives a massive benefit from class 4 gambling.New Zealand First is not standing up here condoning class 4 gambling. We are not out there saying: “Goodness me you should take up gambling. It’s a fantastic pastime.” but certainly gambling has been around for hundreds and hundreds of years and the vast majority—the absolute vast majority—of New Zealanders are gambling responsibly. I will talk about harm minimisation and some of the ideas that Denise Roche and some of the other parties have put forward about harm minimisation which is of course the buzzword. In fact there have been a number of members in the House who struggled with actually pronouncing the words “harm minimisation”. Some of the ideas are just very impractical. They actually do not do anything towards assisting class 4 gambling or the Gambling Amendment Bill (No 3) by reducing harm.In actual fact what you are looking at doing if some of the ideas are implemented is driving people out of their little wee rural spots their urban sanctuaries their homes their little wee local pubs and the RSAs and having them head into the large casinos. None of this legislation captures anything to do with Skycity and the big corporations which are gaining the biggest benefit out of those small closures in those little wee townships the hamlets around the country. If we talk about harm minimisation we should look at how 27000 gaming machines have been reduced over the last 10 years down to under 17000 gaming machines and of course there are 1300-odd licensed premises around the country. That is around 13 machines per venue if you average it out.What we do support in this piece of legislation is openness transparency and of course reducing bureaucracy. But some of the legislation that is being proposed now—although this Government and the select committee have taken steps towards making it more palatable. Like I say New Zealand First is getting close to being able to say: “Yes that is a sensible common-sense approach to gambling in this country.” However we will be putting some Supplementary Order Papers forward in the Committee stage of this bill which we hope if they are sensibly supported—we certainly have been out there speaking to the people.I know there were 126 people who submitted on this bill. It was moderately supported. However there were some serious concerns and I will talk about those serious concerns because one of those concerns is around section 118 and conflicts of interest. The conflict of interest provision which is around the key persons really with the size of New Zealand is going to restrict firstly a lot of people in this country from receiving funding and support for their community organisations and secondly the organisations themselves being able to support the people who are providing this service to the community. So that issue is pertaining specifically—I am just going to have to go to my notes to read this out. The proposed amendments to section 118 of the Gambling Act will make it a criminal offence for gaming societies’ key persons to purchase a meal or drink from any of the 1300 bars and restaurants that host gaming machines offer or accept a ticket to any event stay at a hotel chain if the hotel chain has gaming machines at one of its hotels have a game of tenpin bowling if the tenpin bowling venue has gaming machines purchase an Anzac poppy—for goodness’ sake—from an RSA if the RSA has a gaming machine place any form of bet with a TAB or with the New Zealand Racing Board if it has gaming machines at some of its venues or purchase a bottle of wine in an area that is controlled by a licensing trust.This piece of legislation makes it a criminal offence that encapsulatesnot only those people within that bill but also the people serving. So now it is a criminal offence for an innocent staff member at one of those venues—buying or supplying that person with a poppy or giving them a beer makes the staff member criminally liable. That is a serious piece of legislation. With the size of this country being 4.5 million - odd people six degrees of separation does not actually work in New Zealand. It is more like two degrees of separation in New Zealand because you do not have to go far down the road to find somebody who knows somebody else in the country. It is pretty much going to implicate and involve people in illegal activity inadvertently. That is not the intended part of this bill; we know that. But unless this part is tightened up even more than it has been with the adjustments that have made we cannot support this bill.The other part that we support is the commission-based payments. We have heard from a number of members. In fact Mark Mitchell says that this will actually reduce the red tape. I actually support the idea that paying commission-based payments at 16 percent makes sense but when I hear other members in the House saying—and we did hear it the other day from Adrian Rurawhe—that they want that commissioned payment capped that does not make sense. To me capping something with increased turnover comes with increased costs to run the establishment. If we talked about wear and tear on the facilities for example—Mr Assistant Speaker I see there is a little bit of a perplexed look. I thought maybe you did not understand where those increased costs will come. There will be increased costs. More staff will be required. As the costs go up that 16 percent should stay where it is. It should not be capped because there are more costs involved with it. This piece of legislation is not about creating wealth for those venue operators. It is about making it to a point where it is actually viable enough to maintain it and sustain it.When I look at the gambling around this country which brings $300 million—$300 million—into our communities our schools and our sports clubs I see that we need to make sure that we look after it notwithstanding some of the fears and concerns that the House is having around problem gamblers. We need to be doing more to assist them. At the moment they make up 0.03 of a percent. It is minor but I am not saying we should discount them. I am just saying that there is far more good that is coming out of this piece of legislation. The actual reasonable and necessary cost of conducting gambling is at 16 percent for a commission-based payment and it makes sense to not cap that. If you talk about nine machines which is a reasonable number of machines for a new venue opening up and we talked about $5000 of turnover within that gaming lounge at 16 percent that is going to give you a return of around $800. Under the current standing it works out to be about $100 per machine. So in actual fact the vast majority of licensed venues around this country under this proposed legislation without the 16 percent cap—16 percent as a commission-based payment—will actually take a drop in turnover. This is not about making money; this is about a sensible approach for long-term sustainability of gaming in New Zealand.It was not that long ago—I can go back to the 1990s—that there were discussions in this House with regard to the future of gambling in New Zealand. It was centred on the model that was happening in Australia and the deregulation of gaming machines over there. It is fair to say that taxes went up over there but its system works. In fact huge amounts of money were invested in New Zealand by Australian companies and by some Australian Government organisations because they thought New Zealand was going to go down that track and we have not. I am currently comfortable that what we are setting up in this country for gambling providing we are being sensible about what we are doing is going to look after the vast majority of the people who need the money the most—those people who are in those community groups and organisations. We cannot support this current legislation as it sits on the Table today. I hope that when we get to the Committee stage we will have a good robust discussion about what we can implement and change. Perhaps I might need to get around and socialise some of those ideas with our people across the bench there. If we can get a little bit more sense out of them then we may be able to support this in the future. We cannot support the bill as it stands.JOANNE HAYES (National): I rise to take a call in the second reading of the Gambling Amendment Bill (No 3). I am really pleased to do this. I have a background in a programme called the problem gambling contract and the member across the way there Adrian Rurawhe knows that programme very well. It was a problem gambling contract. Part of that contract was about working with the venues that had pokies and making sure that they upheld the rules and regulations of each of their venues and working with the retail sector as well.While we were doing that some issues that came up around that for staff training were around how you identify a problem gambler and how you work with that problem gambler to make sure that they get the proper counselling opportunities. The second area that we looked at was making sure that the Department of Internal Affairs was keeping up with its audits of these premises. The third area was supporting the Wanganui District Council at the time with its sinking-lid policy that it had put in for gambling venues so that once they had closed their renting out of pokie machines no more pokie machines were introduced into Wanganui.When I looked at this bill even though I was not on the committee when it came to it I could see that there are so many more advantages for the people who have the problem gambling contracts in New Zealand from implementing this bill. The bill like my colleagues have said aims to increase the transparency of grant making from the proceeds of class 4 gambling venues. While I was working for this organisation in Wanganui this was some of the feedback that we were getting from some of the community providers there. It was about their inability to know whether or not their applications would be successful how that was actually going and how they would be advantaged by that.I want to talk about a particular provider that was based out of Taihape. They would apply for funds from the community grants for uniforms for their kuras or their kapa haka groups and most of them were declined. When we started looking at that they did not know why they were declined. So I believe that increasing the transparency around that grant-making process is going to be very good for small providers in rural areas that have hotels with a gambling venue attached to them. It is going to be a very good policy section to this bill because they will understand exactly where all the money is going to and why they actually missed out.In terms of reducing potential conflicts of interest and the “key person” definition I do not want to go any more into that. I think that Mark Mitchell and others in the House have discussed that quite well. But the bill allows small providers and community groups to have an understanding also about conflicts of interest. As I said I am not delving any more into the key persons but the bill gives some clarity around that. Obviously it is up to the Committee during the Committee stage to debate that further.The bill also provides for improving transparency surrounding management companies that provide societies with services. I think this is very good for the societies. I think that having those organisations being able to come in and support them and to provide the services through increased transparency of the types of services that they are receiving is good for the societies and will support them.Another aim of this bill is to simplify compliance and reduce costs. I was pleased to see when I was reading the information around the bill advertising for when the grants process is coming up. At times it would cost the various societies quite a lot of money to advertise that but to be able to actually do that via the internet is a good way of reducing costs. This means that having less money used on advertising and things like that is good for the community because that means that more money can be invested back into the community to do good things for that particular community. Ensuring the efficiency of the appeals process is not undermined is also a really core part of this bill.When I start to look at the allocation of funding—which I understand from listening to the speech just before me through the member Clayton Mitchell around how proceeds of the funds are allocated—about $200 million is allocated out. I got that information out of this guide Pokies in New Zealand from the Department of Internal Affairs. About $200 million is invested into the communities but that is only a portion of it because the gaming duty percentage for the total amount of funds gained through the takings of pokie machines actually goes on gaming duty. Sixteen percent is the maximum venue payment. We have a problem gambling levy which is 1.51 percent and that levy is what these problem-gambling organisations are actually funded from. At the organisation that I worked with that is where it got its funding from to be able to deliver the services to the people in the Wanganui area.The ASSISTANT SPEAKER (Hon Trevor Mallard): I am going to interrupt the member and ask her now to address the bill—not problem gambling or gambling generally. Thank you.JOANNE HAYES: Yes I was just talking about the allocation of class 4 gaming machines because that is about investing back into the community. It is about this bill being able to free up funds through the reduction of the various costs that it takes to advertise the grants process. I will tell you that when I worked in that sector people thought that all the funds the machines made would come back to the community. They had no understanding of where it all came from and where it was all going to and that was really key. Obviously the distribution for authorised purposes is about 40 percent of that.I will carry on with this bill. We want to make sure—again I am going to say this—that local communities benefit from this bill. It is so key because the Government cannot keep funding everything so this is an opportunity for the communities or organisations that are class 4 gaming machine societies or organisations to actually help to do that and help to grow their communities. It does bring about a close community.In terms of the policy framework of the Gambling Act 2003 a purpose of the Act obviously as I said is to raise funds for our community and for the societies that they belong to. A little bit more around transparency of the grant making by societies—I am going to talk a little bit about that because it is to make available more comprehensive information as I said on grants to communities so that communities understand what it is that they can actually apply for and how successful they will be.I have talked about the visions of reducing conflicts of interest and I have talked a little bit about alterations to improve transparency of management companies. But I just want to say a little bit more about that because some societies use these companies in their gambling operations. These companies provide societies with services like contract negotiations and that is a key thing with some of the venues. It may not be a skill that these venue people actually hold. Some administration and financial management skills which are really key to be able to make sure that their business is financially operational—some of the owners may not have the full skills so that is what these management companies actually do especially around grant application processing. It is really important. I have sat on funding and planning organisations where we had to have a robust system for being able to deliver funds out to the community that was equal and fair. But it is not exactly a skill that you can just pick up a book on and read about. It has to be fair and it has to be transparent.Also another key area is that the bill provides the Secretary for Internal Affairs with the ability to be able to audit the companies and also the ability to actually give licences out to class 4 venues which is very good and helps to reduce some of the funding that goes along with it.In wrapping up I think this is a very good bill. I am pleased that I have had a chance to be able to get up and talk a little bit about my experience within the problem-gambling area and about gambling minimisation. I commend the bill to the House and thank Mr Dunne. Thank you.The ASSISTANT SPEAKER (Hon Trevor Mallard): Jenny Salesa—I call Catherine Delahunty.CATHERINE DELAHUNTY (Green): I think it is my call. I would like to take the opportunity to speak briefly about this bill with a great sense of disappointment. My colleague Denise Roche laid out very clearly why it is that we will not be supporting this bill. A number of bills around the issue of gambling have come to this Parliament with the weight of community expectation that we would make the situation better for this scourge on our communities and I am afraid that once again the Government has failed to do that.Problem gambling is a scourge on our communities and basically what this bill does is make a couple of useful administrative changes but it also opens up the gate to some practices that will enhance what we would call the human misery industry. The human misery industry is the industry that creates dependency on pokies dependency by venue owners on getting the pokie money and dependency on community groups having that money. All of that is encapsulated by some of the changes in this bill particularly the one about moving away from a prohibition on commission-based payments. That is a significant shift and is one of the main reasons that we cannot support the bill. We cannot support that shift in the bill that will allow commissioned-based payments to take place because what it will do is incentivise the pokie venue owners to see those machines—because they get a commission per machine—more heavily used. So we are promoting more gambling harm in this bill.I do not suppose we should be surprised. After all this is the Government that brought you Skycity and traded off our moral perspective on gambling in exchange for more machines. It is also the Government that has stopped the ProblemGambling Foundation’s money until September. So this bill is actually in a context of a problem-gambling Government. I would argue that the Prime Minister is a problem gambler but that is another topic. I shall return to the bill.One of the reasons we are concerned about this is that it is not supporting the right of Kiwis to have a safe flutter but morethe opportunity to dive into an abyss. I think that is the reason why we are so concerned about it: because this is a dangerous product. Although we support the clauses in this bill that will increase transparency—any form of transparency around funding is good—we are opposed to its premise particularly around the assumption that we should reward people who stick by the rules when we know particularly from the mystery shopper study that those problem-gambling venues where gamblers gather are not sticking by the rules. If they are going to be able to benefit further from the addictive behaviour of vulnerable individuals no one is going to benefit.I have heard previous speakers talk about the bill in terms of how marvellous it is that our community groups can access this money—the money of addiction the money of loss the money of family tragedy which is what problem gambling is. Any of us who has worked in the field of trying to set caps on pokies—as I have myself in the town of Tūranga in Gisborne—has seen the struggle that families have trying to avoid this addiction. This bill should have been about that—harm minimisation; pre-commitment cards face recognition technology—to ensure that through legislation the venues would be required to set up harm minimisation. But unfortunately this bill does not do that. It is actually stepping closer to incentivising the venues to want to make more money out of people who are addicted. So we are very concerned about that.We believe that it should have been about greater consumer protection and mitigating the addictive design because we know that the pokie machines are designed to assist people to be addicted. It is a bit like asking the brewers to run drug and alcohol counselling. It is counter-intuitive for brewers to run drug and alcohol counselling and it is counter-intuitive to expect the venues to be the ones that actually manage and police this. We know they are not doing a good job so for all the tutu-ing around in this bill all the little administrative updates and all of the little reassurances about the Department of Internal Affairs having audit powers and being able to enforce compliance it is not going to happen if you actually allow this commission-based payment system. It is not going to be safe for everybody and it is not going to have coverage.We are going to oppose the bill and we are going to put up some Supplementary Order Papers to try to address some of the weaknesses in it. We know we speak for a large proportion of submitters. We know that the specialists who came to the select committee—actually most people referred to the mystery shopper project and many of them were very disappointed when they saw where we had got to. So we will not be supporting the bill. Thank you.The ASSISTANT SPEAKER (Hon Trevor Mallard): Thank you. I am just going to try to correct a situation that we have got ourselves into in the absence of Government support partners who would normally take this call. The call would normally fall to the Labour Party. I think in an excess of politeness between Ms Salesa and Ms Delahunty we have ended up with a situation where one might have had Jenny Salesa having had a call but she sat down politely to let Ms Delahunty take the normal slot. So I am going to seek leave of the House for Jenny Salesa to take a call at this point. Is there any objection? There appears to be no objection.JENNY SALESA (Labour—Manukau East): The Gambling Amendment Bill (No 3) is one that is crucial to me. This bill is important to me personally because even though a large proportion of our people Pacific people do not gamble unfortunately the ones who do are at a really high risk of becoming problem gamblers. I would like to acknowledge the speaker just before me from the other side of the House Joanne Hayes as well as the Hon Ruth Dyson for their speeches. I agreed with both of their speeches.Greater harm minimisation measures should have been included in this bill to mitigate the addictive design that gambling machines have. Pacific people are four times more likely than others to become problem gamblers. This is when you compare Pacific people with the general population. Pacific people make up 6.5 percent of our population. However they make up 21.1 percent of problem gamblers in this country. Studies have shown that Pacific gamblers are also spending large amounts of money when compared with Māori when compared with Asians and when compared with Europeans. The annual average that Pacific people spend on gambling is around $13648 a year. However the average spending of a European by comparison is about $1761. There is a huge difference between these two figures.Last year the New Zealand Herald on 14 August 2014 reported that the funds that people put into pokie machines are by far being spent by those who live in the poorer parts of Auckland. However those funds from gaming grants do not usually go back to those poorer parts of Auckland. What the data shows is that it is the wealthiest parts of Auckland—it is the most affluent parts of Auckland which do not gamble as much—that are the ones that take the majority of the grants from these gaming machines. So the saying goes “The poor get poorer andthe rich get richer.” Unfortunately this also happens with the distribution of gaming funds back to the community. The research that was covered by the New Zealand Herald last year was conducted by Auckland Council. The council challenged the Government to consider a fairer way of distribution of these grants back to the community and I actually agree with the council. It would be really really great to have a system that would actually make sure that those who are most deprived—the poorest parts of Auckland actually including the electorate I represent Manukau East—have better access to this funding. This would actually happen if the system was a fair one. My sincere hope is that this bill the Gambling Amendment Bill (No 3) actually addresses this issue.The research that the council conducted also showed that those who gamble the most unfortunately actually live in my electorate of Manukau East. The comparison that the study showed is that those who live in Ōtara or Papatoetoe spend about $274 per person per year on these pokie machines and this is compared with say someone who lives in Ōrākei who spends about $49 per person per year on the pokie machines. So when you look at the distribution of these funds what this study showed is that those who live in Ōrākei get a return from these gaming machines in terms of grants at a rate of about 152 percent and those who live in Albert-Eden yet another wealthy place in Auckland get a return of 176 percent from these gaming machines. Yet places like Ōtāhuhu—and I am the MP for the Ōtāhuhu area—get only 22 percent by way of grants from these gaming machines. This is absolutely not a fair way of distributing these funds. The funds are supposed to go back to the community. I would actually strongly argue that yes they should go back to the community but how about getting these funds back to the community that they actually come out from which are the most deprived places in Auckland including Manukau East Ōtara Papatoetoe and Ōtāhuhu? Thank you so much.The ASSISTANT SPEAKER (Hon Trevor Mallard): Jono Hayes.JONO NAYLOR (National): This is a really important piece of legislation. It is really important that we have this conversation in New Zealand about how our gambling venues are managed because as so many of the speakers on both sides of the House have already indicated today how we deal with this is a really important thing for New Zealand society. There are definitely problem-gambling issues. There are also definitely issues surrounding the distribution of money that has been raised through gambling and it is really important that we try to do the best that we can to get this right.The majority of the amendments in this bill deal with gaming machines and pokies which are generally in bars pubs and clubs. I just do not know how these things work. I kind of know how they work but I do not think I have ever put a single coin in one of those machines in my life and probably never will. That is probably something that is a good thing. I guess I grew up in a family where that was never part of our culture. It might have been my Presbyterian minister father but that is how it was.I think the tenor of what we have heard today has been almost indicating that we want to sort of wipe gaming machines out. I guess even though it is not my thing—I do not think as I say I will ever be into putting money into slot machines—if we were going to go around and start banning everything that I was not into we would probably have a pretty boring society for some of the others. So I am not going to inflict that on people. I believe that we do need to have things in place that allow people to make choices for their own lives. That said we do need to have some pretty good guidelines around how these machines operate in our country.This form of gambling through these class 4 machines generates a significant amount of money. New Zealanders spend about $700 million through these machines in these venues across the country each year. What we want to do in passing this legislation is ensure that as much of the proportion of that $700 million as possible goes back into the local communities from which it came. I think we just heard a very compelling proposition there in terms of the way that those statistics look currently around Auckland from the member opposite Jenny Salesa when she talked about what happens in terms of the amount of the money that is generated from this in Manukau East compared with the money that goes back into that community. I think that is a very compelling argument as to why we need this legislation to ensure that that happens.As we have heard already this afternoon a significant amount of that $700 million is already going to the 40 percent levy that comes back into the Government coffers which we would argue will benefit New Zealanders because it is money that is going to get invested back into New Zealand. Actually ultimately less than half of the money that comes through these machines will go back into local communities. Over time it is something that I have heard a fair amount about from people. There is a bit of cynicism about some of the gaming trusts and a bit of cynicism about where the money goes to. You get accusations at times of: “It just goes to their mates.” or otherwise. Certainly over the years members of the public both in this role and in the role I had previously have I guess talked to me about their concerns in that regard.So it is important that we have these new proposals that are coming through in this legislation to make things more transparent so that the public can have confidence that the money is going where it needs to go. I am very supportive of that and I think it is critical that we do that. I think we have got to make sure that we limit in those processes the opportunities for crime and dishonesty associated with gambling. We need to make sure that we are following through on what the purposes if you like of gambling are. We have had Denise Roche talk about a number of those purposes already in the House this afternoon. I just want to reiterate that again one of those purposes is that money raised from gambling will be invested back into communities so therefore it is supposed to be operated in a not-for-profit way. Sorry I say “gambling” but I mean that which occurs outside casinos. For the public to know that the proceeds are going to go back into the community is vitally important.To tackle this we are going to restore the ability of the Department of Internal Affairs to cancel or suspend class 4 licences as a penalty. I guess that is the stick part of the approach. It is important that we have significant penalties so that when operators of these class 4 machines are in breach of the way they are supposed to be operated when they are not being as transparent as they should with the way they are dispensing the money and when it is not going back into the communities where it should be going back into we have appropriate measures in place so that the Department of Internal Affairs can take significant action and hold these people to account.But with any type of proposal it is clearly important that we do not just have a stick and that there is also a carrot involved. So there are provisions contained within this bill that will ultimately for those operators who operate well give the opportunity to have a 3-year licence rather than the 18 months that it is currently. I have heard from other members this afternoon their concern over the mystery shopper - type arrangement. There does not seem to be a really good record within the industry of their being very good operators. I think what we need to do is incentivise those people to be better. I am certainly not suggesting that everybody is doing this as well as they could. In fact let us face it: if all the operators out there were operating in the way that we really hope that they would we would not be putting this amendment bill through the House. So we are taking those steps. We are ensuring that by putting these things in place we are going to do that.I think there has been some great work done by the Government Administration Committee. I am not a member of the committee but I understand that some good work has been done. It heard the 126 submissions and as has also been alluded to this afternoon these came from a really wide variety of people. I was encouraged to hear that the vast majority of the submitters liked the direction that this was moving in. I understand that not everybody is going to get everything they want from an amendment bill. We have got many submitters who are coming from quite different angles quite different ways of looking at this but I think that having such broad support for the direction of this bill suggests that we are making some good progress.I want to commend the committee too for some of the suggestions that it has made to bring back. I guess it is a great endorsement of the parliamentary process that when bills are brought forward they do not always just follow exactly the same form from the start to the finish. It is really important of course that we have the select committees where we get cross-party involvement everybody gets involved and hopefully we produce even better legislation perhaps than what the Minister brought in in the first place. So the strengthening of the description of the key person role within this is I think a really good initiative that has come from the select committee. Again it helps to improve the accountability helps to improve the transparency and ensures that we are actually achieving exactly what it is that we are wanting to achieve in this space.I guess I just want to wrap up now by saying that what is really important here is that the public have confidence in the system that is in operation that they do not become cynical about the way these funds are being distributed in our community and that in fact they can be confident about this. Let us face it: I personally think it would be really great if so many of our community organisations were not so dependent on money that was derived from this source but the reality is that they are at the moment. While that is occurring we need to ensure that those communities that are contributing to this source of funding are the ones that are benefiting from it. So from that perspective I happily stand here to commend this bill to the House and look forward to the Committee stage when I am sure there will be some more robust debate and perhaps some more fine-tweaking of this document.The ASSISTANT SPEAKER (Hon Trevor Mallard): Just before I call the next member I do want to apologise to the last member. I had a bit of a shocker when I called him.POTO WILLIAMS (Labour—Christchurch East): I rise to take a call on the Gambling Amendment Bill (No 3). I want to start my comments by just saying that those who have had experience in the community sector know that there is a natural tension between community organisations that receive funding through pokie machines and through gambling and those organisations that actually treat people who experience harm from problem gambling. It is an interesting tension because many of the community organisations cannot do the work that they do without the support that comes through pokie machines. Just today I was having conversations with some people who know that the funding environment is such that they walk a fine line between what their values base is as an organisation and the work that they want to do in terms of the social good that they provide in our communities.This bill is supported by Labour but there are a couple of concerns that we have. It does continue the good work of the original Gambling Act but through the course of discussion and through the submissions there have been a couple of key concerns that have arisen. One of those of course that has been traversed quite widely across the House this afternoon is around the commission-based payments. I admit I had to seek some advice from members of the Government Administration Committee—which is ably chaired I might say—and they have had some robust discussions about the removal of the prohibition around commission-based payments.It is interesting because currently the venues that have these machines have a mechanism in place under which they can get paid the costs to run the gambling machines. Going to a commission-based payment—and here I want to pick up on a point that the New Zealand First member made—does not necessarily mean that the payments will be only to cover the costs. I presume that the more machines you have in a venue if you have a commission-based system the more likely you are to be able to attract more in terms of your commission and the more frequently those machines are used and the more money that is put through those machines also increases the commission that you are likely to receive.So I disagree with the New Zealand First point of view—and this is our view in Labour—that putting a cap on those commissions means that you will actually bear the cost if you are the venue holder. I disagree completely. It is really clear from the submitters who are concerned with problem gambling and the harm that is caused by problem gambling that they really feel significantly that the commission-based payments then go on to incentivise those venues to maximise the amount of money that is pushed through those machines. Currently the venues are paid for the costs incurred with gaming but more commission-based payments will likely mean a higher use of the machines.I also want to pick up on a comment that my colleague Jenny Salesa made about the harm that is caused to particular groups of people. There is no doubting that Māori and Pasifika populations tend to experience the harm from problem gambling more than other population groups. I also want to acknowledge the work that has been done in South Auckland and in Manukau in particular around reducing the availability of these machines because of the harm that it causes those populations which are most vulnerable to the harm from problem gambling.The Labour Party has a minority view of course that is consistent with the view of many of the submitters. Further it talks about the compliance examination conducted by the Department of Internal Affairs that showed there is an inconsistency in the practices across gaming venues. Here I want to point to the mystery shopper intervention that occurred where the mystery shopper was to mimic the type of behaviour of a problem gambler in venues. In over 102 venues where this mystery shopper intervention happened there was only one venue that provided the type of support that would be consistent with good host responsibility. I think that is quite significant—only one out 102 of the venues. It goes to show that good host responsibility is not a practice widely used across these venues.The submitters agreed with the Labour committee members that the bill should actually provide for greater harm minimisation measures within the bill itself. I want to speak about the submitters who came from Christchurch in particular from the Christchurch Methodist Mission and also the Canterbury and West Coast branch of the Public Health Association. They said very clearly that the bill would enable a commission-based payment system for venues. The Public Health Association is not supportive of this measure saying that “Allowing for venues to profit directly from the spend in their gambling machines may incentivise problem gambling and this is a public health risk.” The Christchurch Methodist Mission said that its stance would be to advise against a commission-based model and encourage the incorporation of harm prevention measures based on known harm caused by class 4 machines in our communities—especially low-income communities where class 4 machines are concentrated. We do agree with that.Further one of the concerns we have is the introduction of regulation-making powers so that processes controlling the commission-based payments are governed by regulation. Of course if it is done through an Order in Council we would be unaware of what changes would be made to that regulation until that Order in Council appears.So just to conclude and wind up and just to confirm we are supporting the bill. We have concerns around the commission-based payments to venues as opposed to the current method. Commission-based payments would be acceptable if there was a cap involved in that. We are concerned that measures for harm minimisation are not part of the bill and we are also concerned with the process around regulations. On that note thank you very much for the opportunity to speak.BRETT HUDSON (National): I rise in support of the Gambling Amendment Bill (No 3) in its second reading. May I start just by saying that it was an absolute privilege to serve on the Government Administration Committee and to hear submissions on this amendment bill. I would like to take the opportunity right now to acknowledge all of the submitters particularly those who work in the areas of problem gambling and with people affected by issues around gambling. Particularly we heard from a number of individuals who themselves have experienced all of the trauma upset stress and financial misery that does unfortunately afflict some in our community with problems around gambling. They were extraordinarily courageous to share their very private and traumatic stories with the committee. I thank them for showing that courage and I would like to take this opportunity to reiterate—as I think other members have done—that the committee listened very closely to what they had to say and took that into consideration as we worked through the evidence on the bill.As I think has been covered—but I think it is important—we should look at the nature of what class 4 gambling adds to New Zealand. New Zealanders spent around $700 million a year on pokie machines in the year 2013-14 and about $246 million of funds are distributed through non-club societies—to community groups sporting groups and other very very worthy recipients—across our society. This is an entertainment activity that helps to fund many groups and needs. I think it is important within that to look at the statistics of problem gambling because I think that is where the submissions either in opposition to or expressing concern about these changes were raised. So for instance in the data from 2012 supplied by the Department of Internal Affairs 0.7 percent of New Zealanders are listed as having problem-gambling issues with a further 1.8 percent being at moderate risk.So what that is saying to us is that for that number of people there is a very real and deeply affecting issue—one that this Parliament ought to give real consideration to. But as with most things in the legislative process there is a balance and the balance that we also need to bear in mind here is that for 99.3 percent of people gambling in this form of gambling does not represent a clinical or defined problem level of gambling and its associated problems. So we do need to bear that in mind and the committee members did as we worked through the evidence we heard and as we reached the amendments that we recommended which are reflected in the bill as it was recommended back to the House for this reading. I would also note just in finishing on that area that we saw the greatest reductions in problem gambling in the 1990s and the data shows us that that level has remained fairly stable since then. So great work has been done and as I say the vast majority of people gamble responsibly and without issues arising from that.The main purposes of this amendment are to increase transparency of grant making which is very important; to reduce potential conflicts of interest which are of great concern around our communities; to simplify compliance and reduce costs; and particularly there was an issue around the appeals process. I may deal with more than one or two of those but what I really want to spend some time on right now is this area of potential commission-based payment for venue operators. I will acknowledge that certainly most submitters themselves were not either corporate societies or venue operators. Most submitters were submitting in opposition to a move to commission-based payments but although they all expressed concerns about what might happen it is very important that we note that not one submitter—and I will particularly reference Professor Bill Abbott the pro vice-chancellor and dean at the Auckland University of Technology who himself was very open that there is no evidence to suggest that a commission-based payment would result in higher levels of problem gambling or incentivise inappropriate behaviours. I will acknowledge that Professor Abbott was opposed in principle. He did not want to see a commission-based approach but he did acknowledge that there is no evidence in New Zealand or around the world that actually demonstrates that a move to such a system would in fact incentivise improper behaviours or lead to worse outcomes.I would like to have a wee look at what leads the department or this Parliament to even consider the possibility that we might allow through regulatory powers a commission-based system. Quite frankly the venue cost at the moment is a highly complicated set of formulae that is difficult and costly for venues to manage and is difficult and costly for the department as the regulator and overseer to actually also oversee and manage from a compliance perspective. In reality if you are a reasonable or large sized venue it has actually led to a situation where these venue operators are getting what amounts to a capped commission of 16 percent of takings per machine. So we actually have by de facto—or you could argue by design—the nature of the complicated means that we have. There are four different limits that are used in determining what the venue machine costs are today. Three of them are mutually exclusive but the fourth one can operate with any of the other three. What they have found is that option D the final one has actually become that de facto standard—16 percent when you get to a sizable operation.So we are further challenged in determining that by the regulations around the cost inputs. The legislation as it stands demands that the costs are reasonable actual and necessary but how the costs are determined is subject to the decisions of the department as the regulator. The department determines what tasks can be included in the actual real and necessary cost inputs and the amount of time each of those tasks will take and the reasonable value therefore of each of those tasks. In fact a couple of submitters highlighted to us that those talks the durations and more important the employee pay scale for delivering those have not been looked at for years and the pay scale has not been adjusted even to meet inflation. Although inflation might be at 0.1 percent now it has been running in previous years particularly prior to this Government at much higher rates than that. So we have a potential situation that the costs that are being allowed to be claimed at the moment may not actually be truly reflective of the costs to run those machines in the venues.Those submitters also pointed out that they just take into account a tiny tiny portion of an employee which the business still has to fund for the rest of their time of employment. So it can actually create a real challenge for them. The options that were in front of the committee were to retain the status quo which would be bad as it is complicated and unwieldy and to go to a set charge per machine which we also discovered though discussions in committee would mean that some venues would come out winners and some venues would come out losers. We do not I think overall want to see that either.But in the commission there is more than one way to skin the proverbial cat. We could just have an open commission that says that the more that you collect the more you will get ad infinitum. We could have a tiered commission based on whether you have a small number of machines at your venue or a medium or a large number or we could in fact just have a cap that said that you charge a commission but that it goes to a certain level—it could be that 16 percent even—and then stops. As a committee we did determine that perhaps the best way to address this was actually to go through a consultative process through the regulator and therefore that is really what drove the decision the recommendation to do it through regulation rather than through the principal legislation. That is why we have come back proposing that.Just as I close off on this issue of commission-based payment I would just like to make this point because I think it is very important. If it is the venue operator that is getting commission based on the takings it is the behaviour of the operator that is in question not the behaviour of the gambler. It will not affect the gambler at all. Just simply with something like Lotto we see evidence that it does not necessarily—in fact it does not—see a rise in bad behaviour by the operator. This bill has been returned and I think it is very sound and pragmatic and I commend it to the House.The question was put that the amendments recommended by the Government Administration Committee by majority be agreed to.A party vote was called for on the question That the question be agreed to.Ayes 93New Zealand National 59; New Zealand Labour 32; ACT New Zealand 1; United Future 1.Noes 28Green Party 14; New Zealand First 12; Māori Party 2.Question agreed to.A party vote was called for on the question That the Gambling Amendment Bill (No 3) be now read a second time.Ayes 93New Zealand National 59; New Zealand Labour 32; ACT New Zealand 1; United Future 1.Noes 28Green Party 14; New Zealand First 12; Māori Party 2.Bill read a second time.