Speech to a special conference of the Community Gaming Association
Thank you for the opportunity to speak at this Special Conference of the Community Gaming Association.
It's my pleasure to address you as the Minister responsible for the Gambling Act and for gambling policy in New Zealand.
I would have liked to have been here in person today, but due to a Ministerial visit to my Otaki electorate - organised well in advance - I've had to record this message instead.
What I want to talk about today is the Government's expectations of the groups that run gaming machines, especially the groups that run gaming machines in commercial venues like pubs.
To begin with, it's worth noting the size of the sector.
Expenditure on non-casino gaming machines was around $890 million in 2008/09, and has been over a billion dollars in some years.
Importantly, the money raised for community purposes has been about $330 million.
Some people have harmless fun playing these machines.
However, they are also linked to a variety of problems.
It's important, therefore, that there are measures to prevent and minimise harm.
It's also important that there are measures to limit the opportunities for crime and dishonesty.
Achieving a balance among all of these things is what the Gambling Act is all about.
Today, I want to focus on the community purposes part of this equation.
It's very important to remember that societies are licensed to run gaming machines to raise money for community purposes.
As societies, the money you get from your gaming machines is not your money so to speak.
It is money you hold in trust on behalf of the community.
Some societies seem to have lost sight of this very simple point.
It is not a "grey" issue, with any room for debate.
From the Government's point of view, it is "black and white".
As I'm sure you know, the Government has several priorities for gambling.
One priority is to maximise the percentage return to community purposes from gaming machines.
This is an important way to support our communities.
Other priorities are to improve compliance with gambling laws and the integrity of funding practices.
The Gambling Act says that societies must maximise their returns to the community and minimise their costs.
The Government's expectation is that you will comply with the law, and honour your obligations to the community.
I know that most of you are doing this.
I don't want to see an unnecessarily heavy-handed approach from the Department of Internal Affairs.
Staff in the Department would prefer to be spending their time on more constructive activities.
But they will be persistent when they get a sniff of anything dodgy.
The Department will suspend, cancel or refuse to renew licences, and it will consider prosecutions, when it finds breaches of the law.
Some sanctions have already been imposed.
I understand the key topic for discussion today is the Gambling Commission's recent decisions upholding two licence suspensions.
In one of those cases, it even extended the suspension the Department had originally imposed.
The Commission made it very clear that a gaming machine society cannot spend money to try and poach venues from other societies.
A variation on the behaviour in these two cases involves societies making grants to community groups that control the venues in which societies run their machines.
This is just another way to capture profitable venues.
The Gambling Commission has said that the sort of behaviour found in these two cases is widespread in the sector.
I have read with interest the comments of my colleague, the Honourable John Carter, Minister for Racing, on a harness racing website.
Minister Carter emphasised that integrity has to be a cornerstone of the racing industry.
He thinks racing's integrity might be coming unstuck due to its relationship with the gaming machine sector.
Minister Carter knows that the organisation and running of race meetings, including the payment of stakes, is an authorised purpose under the Gambling Act.
This means that most gaming machine societies can therefore make grants to racing clubs.
But he has concerns about how and why some societies decided to make the grants they made.
He is not comfortable with racing officials sitting on the boards of gaming machine societies.
A lot of this goes further than what gaming machine societies can or can't legally do.
It's about perception.
Some of the public perception is that no matter how worthy a community purpose is, it won't get a grant unless the community group knows the right people, controls a gaming machine venue, or controls a gaming machine society.
DIA officials tell me some cases coming up suggest that this perception is accurate.
But whether it's accurate or not, this is a perception you have to sort out.
It's in your hands.
When the Department picks up issues involving non-compliance, societies must accept that there are problems and put them right, quickly.
There are too many cases of societies spending community money trying to defend the indefensible.
If the sector can improve its practices (which I hope it will), then this has to be a win for all the parties involved.
A win for the sector, a win for the Department, and, most importantly, a win for the community because more money will find its way to grass roots New Zealand.
I want you to show how good the sector can possibly be.
The Government needs you to pull your socks up and prove you can all comply with the law.
Now is your opportunity.
From my meetings with the sector and the wider community, there seems to be a strong desire for change.
I am hopeful that the time is right to harness that desire for change.
The Government is prepared to change too.
We are prepared to see some changes people in the sector would like.
Some societies and potential grant recipients consider that the prohibition on multi-year grants means that grant applicants don't have the certainty which is necessary for long-term planning.
There is some merit in this point.
Later in the year, the Government is prepared to propose changes to allow societies to make multi-year grants in certain circumstances.
For example a society would need to hold a current licence, have sufficient funds available, and disclose long term commitments in its annual report.
Allowing multi-year grants would give a "better bang for the bucks" and assist in getting projects started with more long-term certainty.
But first, we want to see a change in societies' behaviour.
If the sector wants concessions and changes to the law, then it needs to demonstrate that it will maximise the community funding generated by gaming machines, and that everyone will comply with the law.
If we work together, I hope we can get the sector back on track.
This your chance.
Thank you once again for the opportunity to talk to you.