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Problem gambling: The options

Every year, grants funded by class 4 [gambling machine] gaming means community groups can survive and thrive. It funds rescue helicopters, community defibrillators, sports clubs, cultural groups, and many more. And every year, mistruths get spread around about the best way to tackle problem gambling.

Recently, a Social Impact report was submitted to the Wairarapa local authority about how to tackle class 4 gambling. This report [which is, charitably, “based” on research by Professor Erwin out of AUT but ignores much of it] was covered in a recent Wairarapa Times-Age story I’m writing this opinion piece in an effort to clear up some of the points made and clarify the facts about class 4 gambling in New Zealand..

First, it’s important to lay out the fact that 100 per cent of class 4 gambling spend is returned to the community after prizes are paid out and operating costs covered. Returning 100 per cent of spend is the operating model for Class 4 gambling in New Zealand, and it’s world-leading. About $330 million was given out last year to nearly 10,000 community groups around the country.

Just under $1.9m came back to Wairarapa from the $5.1 million that was spent. After GST is deducted that’s around 43 per cent returned – not the 18 per cent that was reported. Plus, importantly, a lot of the funded community organisations actually operate nationwide, and so money may go to an Auckland office, or a Wellington bank account, but it might still be used in the Wairarapa.

The Social Impact report claims Professor Erwin’s report shows a direct link between local governments’ ‘sinking lid’ policies and a real reduction in problem gambling. However, none of Erwin’s findings supported the point that sinking lids reduce harm. Any conclusion that sinking lids actually reduce harm is contrary to research findings here and in Australia; the idea of closing licensed, controlled, and supervised gambling spaces – when uncontrolled and unsupervised gambling is growing exponentially. Close down a C4 venue and anyone who wants to gamble is going to spend their time and money in the unregulated, unsupervised wild west world of online gambling.

The truth is that while these sinking lid policies have reduced the number of gaming machines by 10,000 since 2007 – a decrease of about 44 percent – Te Whatu Ora reports that problem gambling prevalence rates have not changed since the late 1990s. In fact, Erwin’s research also said that reducing the number of machines reduces the spend on gambling: but the opposite is true in the Wairarapa, where despite machine number reductions, the spend has slightly increased. So if lowering the number of machines isn’t helping problem gambling, then what can?

Last year, the Government introduced a whole suite of new gambling regulations, designed to minimise harm. GMANZ made it clear that while there are some good ideas which we support, the new regulations don’t go far enough. Our people are at the coalface of this industry and would love to see problem gambling reduced to zero in this country. We don’t want anyone addicted to gambling in our venues, just like a bar doesn’t want someone falling down drunk. But our submissions were ignored despite having the clearest perspective.

One thing we pushed hard for was a nationally recognised qualification for people who work in class 4 venues, the same as how bar managers must have a bar managers’ licence. The Government didn’t take up our suggestion, which is disappointing as we’re positive it would’ve benefited our staff, and patrons, and made a material difference to reducing gambling harm.

The rate of problem gambling is comparatively low in New Zealand. The Ministry of Health, using internationally agreed criteria, sizes it at just 0.2 per cent of the adult population and the 2022 Health and Lifestyle Survey reported it at 01 per cent. Community-based gaming machines are estimated to be responsible for just under half of that – so the size of the problem being addressed by a sinking lid is 0.09 per cent of the adult population – roughly 3,500 people across the whole country – still too many, but nothing like the doom merchants would have you believe.

Given the comparatively low rates of problem gambling in New Zealand versus the OECD, it’s important that we make sure our collective response to it is backed up by evidence. Our sector happily pays tens of millions per year to the Gambling Levy which pays agencies to provide harm reduction services. Part of solving problem gambling needs to include a very clear understanding of what outcomes are being achieved by service providers.

The flawed Social Impact report also asserts that “based on limited feedback from venues and gaming trusts, the presence of Class 4 gambling venues in Wairarapa brings limited economic benefit to the Wairarapa region, with minimal impact on employment.” It’s not clear what ‘limited feedback’ means but it certainly ignores the obvious economic, employment, enjoyment and community benefits that this activity generates.

It’s also callous to make the point that it has a “minimal impact on employment”. There are hundreds of hospitality staff who work in the class 4 sector in the Wairarapa. Again, the potential loss of jobs is glibly accepted with no real analysis. That cost of job loss needs to be measured against the size of gambling harm – which the report fails to mention.

Reducing the pool of community grant money, pushing players into riskier alternatives, and job losses are real costs with real human impacts. These must not be ignored.

People living in smaller centres like Masterton can’t necessarily access wraparound support as easily, so if they have mental health or addiction issues, which can create gambling problems, then they have to travel a long way to get support. We need to get better at bringing treatment to where it’s needed, in the form it’s needed.

GMANZ is not opposed to measures which reduce harm from gambling. Far from it. We want to be part of the solution. This starts with our perspectives being heard and isn’t helped when the information being used to form policy decisions is inaccurate and incomplete.

Peter Dengate Thrush is the independent chair of the Gaming Machine Association of New Zealand.

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