SUBMISSION ON THE GAMBLING ACT 2003 CONSULTATION ON POSSIBLE REGULATIONS

1. Introduction
The Hospitality Association represents 1,159 sub site operators who collectively operate 15,621 machines.   While the Association is an advocate generally for the fund-raising sector of the gaming industry, its priority in these submissions is representing the interests of the site operator.

The Association is very concerned by what it considers a precipitous approach to the development of regulations by the Department.   The Gambling Act does provide for a range of regulations which may be made under section 313.   These regulations relate to harm prevention and minimisation.   The Association believes it is too early to consider whether such regulations are necessary or appropriate. 

The Gambling Act 2003 has in itself a number of measures designed to limit the growth of gaming machines and promote harm minimisation.   The Association believes that the Gambling Act and the consequential local authority policies need to be given time to bed in, and that further research and assessment is required to determine whether and what regulations may be appropriate.

The Association is equally concerned that the collective impact of the measures proposed is not being considered.   It is the Association's conjecture that the cumulative impact of the measures proposed in the consultation of possible regulations combined with impact of the Act itself, will significantly reduce the fund-raising capacity of the sector.

There is rightly a concern for the 1-2% who have or are likely to acquire an addiction to gambling.   This has been addressed under the Gambling Act 2003 with provision for a problem gambling levy and for a comprehensive programme to be developed by the Ministry of Health.   This programme must be given time to bear fruit before additional measures are given serious consideration.

Regulations are not mandatory and nor is there any particular time frame under which regulations need to be made.   While the Department has made regulations recommendations on harm minimisation measures, it is not in fact required to do so.

2. Comments on Proposed Regulations

2.1       Prohibitive prizes

The Association questions the need to have such a thing as prohibitive prizes.   The products listed are either controlled by their own legislation or their sale is governed by the Fair Trading Act/Consumer Guarantees Act.   Furthermore, it is legal to sell raffle tickets to those not of a legal age to consume the restricted products.   There is currently many a raffle which illegally includes alcoholic products.  This is an opportunity to remove a restriction which as far as can be seen does nothing to minimise harm from gambling.

2.2       Harm minimisation

2.2.1 - Retain the present pub and club gaming machine stake limits ($2.50) and prize limits ($500 for a single machine and $1,000 for a link machine jackpot).

While HANZ supports at least retaining the current stake limits, it questions whether the opportunity should be taken to increase these limits.   It seems ludicrous that gaming machines on one given site have a jackpot limited to $1,000 when Lotto can have a prize jackpot to $30 million and TAB's "pick six" jackpot is at $1 million.   HANZ supports the Australasian Gaming Machine Manufacturers Association (AGMMA) in their submission on this topic.

2.2.2 - Introduce less predictable casino, pub and club gaming machine jackpots and require notices advising players that jackpots aren't struck at any particular level.

The Association struggles to see that this would make any particular difference to problem gambling while simply reducing its competitiveness with Lotto, TAB and housie.   It must be remembered that only 1-2% of players have a problem with gambling and that measures such as these proposed simply reduce the pleasure for the 98% while having a questionable impact on the 1-2%.   Such measures should not be introduced on a whim but only where there is concrete data which demonstrates that such measures have unmeasurable and significant impact on measuring harm minimisation.

2.2.3 - Forbid casinos, pubs and clubs advertising gaming machine jackpot totals except in the venue (and even then not in a way that is visible from the street).

It is very debatable that this measure is going to have any impact whatsoever on problem gambling addiction.   Its only significance seems to reduce the charitable gaming sector's ability to compete with high profile TAB and Lotto which are not only allowed to have external signage but advertise extensively in the electronic media.

2.2.4 - Require casinos, pub and club gaming machine operators and the New Zealand Racing Board to train staff who supervise gambling in problem gambling awareness.

In a theoretical sense the Association has no objection to this proposal.   It needs to be recognised that identification of a problem gambler and intervention at site is a task for specialists and it is questionable whether the level of training required for this is appropriate to be delivered at a gaming site level.

2.2.5 - Require class 3 gambling operators (eg operators of large raffles and large housie sessions) casinos and pub and club gaming machine operators to provide information on odds (eg for gaming machines by way of a 'second screen').

HANZ supports the proposal to give players more information on their odds.   We also support the AGMMA submission which advocates the adoption of the existing technology which has been developed in Victoria with good results.  

2.2.6 - Require gambling operators to make information that they collect on a player, available to the player.

The Association believes that this requirement is already encompassed by the Privacy Act and will not therefore require a specific regulation.

2.2.7 - Continue to require casinos, pub and club gaming machine operators and the New Zealand Racing Board to provide brochures and notices informing players about the hazards of gambling, encouraging players not to spend more than they can afford, and setting out information on the systems gambling problems.

HANZ has no objection to this proposal.

2.2.8 - Set a minimum gaming machine duration of 3.5 seconds.

HANZ does not support this proposal as there seems to be no evidence that such a proposal will have any beneficial impact on the problem gamblers.   There appears to be no co-relation between problem gambling and wheel spin.   It appears that the most likely outcome however will be a drop in revenue meaning the community receives less and the government receives less.   It is the site operator's anecdotal evidence that the majority of gaming machine players will have an amount they can afford to play on the machines.   If that is $20 then they play for the time it takes to consume the $20.   Slowing the wheel spin will simply mean that they will spend longer on the machine, rather than addressing an issue with problem gambling.   The reduction in enjoyment from a slower wheel spin is also likely to have a consequential impact on the 98% making a sensible entertainment investment in gaming machines and is likely to drive them to other alternatives where the entertainment value is perceived to be higher.  

HANZ supports AGMMA's detailed submission on this issue.

2.2.9 - Specify certain types of venues as unsuitable for non-casino gaming machines.

HANZ questions whether regulation in this area is necessary given the current restrictions included within the Act and the local gaming venue policies currently being developed by the territorial authorities.   While it may be unsuitable for gaming machines to be located in a dairy or supermarket, this issue will be addressed in local authority gaming venue policies.   Furthermore, a number of massage parlours already have gaming machines and it is quite unclear why the Department should consider these as inappropriate venues given the stringent licensing required around both the operation of gaming machines, a liquor licence, and a massage parlour.

2.2.10 - Ban automatic teller machines (but not Eftpos terminals) in casinos, pub and club gaming machine venues and NZ Racing Board venues (ie TABs).

HANZ does not support this measure although it is apparent that very few HANZ members would have an ATM on site.   It is questionable as to whether this measure is going to make any difference given the low level of market penetration for ATMs and whether it is likely to have any significant impact on the 1-2% with a problem as opposed to inconveniencing the 98% who are making valid discretionary choices as to their recreational dollar.

2.2.11 - Create infringement offences for breaching harm minimisation regulations.

HANZ is very concerned at the proposal for infringement notices for harm minimisation offences.   The harm minimisation measures suggested are questionable in their own right and some high technical of nature.

3. Gaming Machine Profit Distribution and Accountability

3.1 - Return at least 37.12% of GST exclusive revenue( defined to include player loses, proceeds from the sale of fittings, chattels and equipment and interest or other investment return on those amounts to authorised purposes.

HANZ strongly objects to this proposal.   When a minimum return to authorised purpose was first introduced it was done to ensure societies could not establish without a genuine intent to be involved in fund-raising.   The controls now in place with respect to distribution, electronic monitoring, licensing conditions and so on, make this provision now redundant.   HANZ is particularly concerned that if such a measure is introduced, that it will have an adverse affect on the many smaller sites, particularly in rural and suburban New Zealand.   The Gambling Act 2003 already introduces a significant array of additional costs such as new licence fees, new problem gambling levies, electronic monitoring, plus the potential costs and reduction in turnover as per the proposals in this consultation document.

The collective impact of all these changes plus the implementation of the ban on smoking in gaming venues from 10 December 2004, will significantly reduce the ability of sites and societies to achieve the current 33% let alone an increase to 37.12%.

HANZ strongly believes that the issue of a requirement of a required return to authorised purpose should be set aside for later consideration once the implementation of the Act itself is complete and any regulatory changes have been implemented and their consequences measured.

3.2 - Other Distribution and Accountability Matters

HANZ does not have a comment to make on the administration of the grants process as site operators play no part in their determination or administration.   It supports the submissions of Pub Charity and GMANZ in this regard.

4. Conclusion
The Government's intent to limit the growth of gaming machines through the gambling Act 2003 have been largely successful and it is expected that the Ministry of Health will be equally successful in implementing programmes for problem gambling and looking at harm minimisation measures.   The Association strongly believes it is precipitous to be moving on further regulations as proposed under the discussion document at this time.   Furthermore, it is vital that the integrated consequences of the changes already made and those proposed, are considered in their entirety before decisions are made to proceed.

The introduction of the measures proposed, alongside all those already in place will significantly reduce the fund-raising sector's ability to meet community needs while having a dubious impact on harm minimisation for those who have a gambling addiction.

The Association would welcome the opportunity to discuss this submission with officials.

Bruce H Robertson
Chief Executive
Hospitality Association of NZ
27 February 2004

Ref: h:hr4r4012.doc