Pokie Funds

September 28th, 2012 at 1:00 pm by David Farrar

Dom Post reports:

A Wellington city councillor has told a select committee that local authorities should not be trusted with pokie funds – contradicting his own council.

Andy Foster told Parliament’s commerce select committee yesterday that proposed gambling reforms would leave local councils “horribly conflicted”.

The committee is hearing submissions on the Gambling (Gambling Harm Reduction) Amendment Bill, which would strip private trusts’ powers to distribute pokie funds in favour of local government.

Mr Foster, who was submitting as chairman of the Karori Brooklyn Community Charitable Trust – not as a councillor – said the bill would make councils the regulators, benefactors and distributors of pokie funds.

“There is a temptation for the council to say, ‘We are going to start favouring organisations we support’.”

Minutes later, councillor Stephanie Cook appeared before the committee to present Wellington City Council’s official view, praising the reforms and pushing for even more council powers.

MPs questioned Ms Cook over conflict of interest concerns but she replied that any conflict could be “managed”.

The status quo with the trusts is not sustainable, and I support change.

But handing tens of millions of dollars out to local body politicians to dish out to their constituents would be encouraging corruption. It is a hideous idea. Local Councillors would be able buy support. I’m with Andy Foster on this one.

I’ve not gone into this issue in depth, but one possible solution might be to have the share of profits from set aside for community groups, to be allocated through the Lottery Grants Board? One could specify that the funds must be spent in the areas they come from, and the LGB could have regional committees to consider applications.

13 Responses to “Pokie Funds”

  1. Harriet (7,553 comments) says:

    Just look at NSW, QLD, Vic, SA, WA, Tas, NT and you’ll see how ADDICTED those governments became when they got the powers that are proposed for Wellington.

    NSW has a billion a year to ‘hand out’ which is a lot of vote buying – mostly from unions.

    It also means that they CAN’T reduce gambling for the social good without reducing their OWN revenues.

    btw: I don’t agree with government reducing gambling, as those with gambling problems are the ones who need to recognise first that it is THEMSELVES who have a problem – not society.

    Gambling is NOT a WIDESPREAD problem in society.

    There is also a differance between a problem gambler and those EFFECTED by that problem gambler. Lefties always say for eg. ‘200,000 people are effected from problem gambling – we need to restrict gambling now’ but the reality is that only about 4000 people need to get help for THEIR gambling addiction.

    Most of what I’ve said has been taken from the federal enquiry into pokies held earlier this year.

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  2. Rosa19 (27 comments) says:

    its a tax …and if its going to continue the key question to ask is who has the best incentives, information and capacity at the lowest cost to distribute the tax to achieve the greatest good … National Govt? Local Govt? Trusts? Any Bets?

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  3. Elaycee (4,538 comments) says:


    but one possible solution might be to have the share of profits from pokie machines set aside for community groups, to be allocated through the Lottery Grants Board?

    This is the only real alternative (to status quo) but the monies could not go into a ‘general pool’ for distribution.

    Under current Legislation (and the current gambling framework), Gaming Trusts have a designated purpose and proceeds must be spent in that area. If a Trust existed solely for the purposes of supporting (for example) the St John Ambulance, then the proceeds from machines operated by that Trust cannot be spent on (for example) sport. Therefore, unless there is a Law change relating to ‘authorised purpose’, the LGB would need to be in sync with the operations of every single Trust – to ensure that the proceeds are correctly allocated.

    But the thought of a Local Council having access to such funding, is ludicrous. Whoever made that suggestion in the first place, should be ashamed of themselves. Locally, I wouldn’t trust the Auckland Council to fix the squeak on my wheelbarrow – even if I gave them a can of CRC and I showed them how to use it. The thought of them making decisions re proceeds from Gaming machines, is in the realm of nightmares.

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  4. Elaycee (4,538 comments) says:


    its a tax…

    No – not at all. All proceeds from gaming machines are split (roughly) three ways:

    A third is paid by the machine owners (the Trusts) to the IRD in the form of tax.

    Another third (roughly), is spent by the Trusts to pay rental to the sites where the machines are located / maintain the machines / update them as required / pay Trust staff etc. All costs are monitored by the DIA.

    The remainder (roughly a third) is paid back to the community in the form of grants (the authorised purpose).

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  5. Mark (1,614 comments) says:

    DPF agree with you totally on this. The thought of local councillors having a hand in the distribution process is very disturbing.

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  6. labrator (2,469 comments) says:

    Local councils should the least amount of money possible to get their job done. Unfortunately their job keeps getting rewritten by vested interests.

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  7. rg (215 comments) says:

    This Bill is typical of politicians. “the gambling harm reduction bill.” Pokies and liquor outlets are more common in poor areas because the reason these people are poor is because they drink and gamble. Taking money from the poor and giving it to the hockey clubs is a great way for the rich to get back some of their money which is taken off them in taxes and given to the poor.

    By requiring the money to stay in the poor areas will do nothing to reduce the harm pokies do, but it will allow poiliticains to feel they have done something when in fact they haven’t.

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  8. Tauhei Notts (2,367 comments) says:

    Thuis is a big worry to me. I do not believe that local body politicians could ably handle the dishing out of funds. Cue a myriad of Lesbian support groups getting their grubby fingers on dough that had previously gone to sporting clubs, the likes of which I have been an honorary treasurer for.
    In the past when I have lodged application forms for pokie grants, the biggest expense is photocopying when numerous documents must be sent in with the application form. I have noticed that various bodies that act for groups representing a minority race have been successful in their applications. I have observed, as an accountant, the muddled thinking of some of those groups and cannot comprehend how they can possibly present a coherent application with all the intricate detail required.
    The last four applications I prepared all required a copy of the club’s constitution together with a copy of the latest audited annual financial statements. If the club could afford an auditor it wouldn’t need to apply for a grant. Instead the club has its accounts reviewed by a chartered accountant in public practice. That is ultra vires the club’s constitution which requires the club’s accounts to be audited. The constitution should be changed, but that’s why the club needs grants. The club cannot afford the expensive legal fees required for a change in the constitution. No, it is not simple to change one clause. There other complex consequential changes required that need the expense of a lawyer. But no Pokie trust has ever pointed out that blimp in the club’s constitution.

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  9. slijmbal (1,270 comments) says:

    I actually submitted to this bill on behalf of a charity I work with.

    Sadly the Gambling Harm Reduction Bill does not focus enough on the actual harm reduction element and is more about a money grab. It does have an improved ability for councils to control pokie numbers but that seems to be it and considering pokie numbers are reducing it is arguable this is superfluous. It is significantly worse in that the current 60 or so trusts will be replaced by between 120 and 200+ committees (hard to estimate the true number) appointed by the councils to distribute the funds. Expect a major disaster in terms of handover, adbuction of the committees for specialist groups etc.

    Despite the current thrust in the media the pokie trusts are a major source of funds but if they do disappear it will be a significant blow but not a killer one for the majority of charities.

    There are still a number of the current trusts who frankly should have their trusts revoked. Personally, and on behalf of the charity I work with, we would rather the current trusts were sorted out – they are getting there and are substantially better than they were 5 years ago but still some way to go. The larger trusts are rather professional in our dealings with them but there are still several dubious ones. The DIA has the power to control but insufficient resources. A levy of even .5% of funds raised to fund proper policing would do a world of good.

    There are some onimous reference to Whanau and the like in the bill, which imply that there could be special preference to all things Maori once it got to implementation time. No real commentary about that I notice.

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  10. trout (1,132 comments) says:

    Too many Councillors (especially in small communities) get voted in by a single interest group who want Council funds spent on pet projects. Partly due to the apathy of voters in local Body elections it is relatively easy for promoters to drum up support for a selected candidate and have him/her promise to push their barrow. Just imagine the pressure if gambling funds were up for grabs. Give it all to the lottery board to dole out.

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  11. Nick K (2,067 comments) says:

    Slijmbal nails it just above. When this issue went before the local board I’m on I asked that same question of officers – how does changing the distribution arm of the cash minimize harm to the problem gamblers? The exact answer was “it doesn’t”.

    The bill is a crock of shit and does very little for problem gamblers. If parliament lets local body politicians dish out the money then charities and sports clubs will be the losers.

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  12. SPC (8,704 comments) says:

    The major impetus to an objection to the reform comes from those who either have a vested interest in the continuance of the current system or who simply fear that any change might undermine access to funds (no actual basis in fact – and more a case of those who line their own well liquored pockets having the compliant – gullible and stupid – ear of those they allocate money to – such as the NZRFU).

    The reform has three strengths

    1. more of the money raised will go to community groups
    2. a reduction of problem gambling
    3. money being retained in areas where the money is raised – the subsidy of middle class area sports clubs by those in poorer areas will end.

    The objection to council involvement is unfair, but a sensible alternative is an existing body such as the LGB.

    The money would not be going to council to subsidise rates but kept at arms length and allocated to community groups as at present. A council could nominate a group of people to serve in local area allocations (including some of those serving on existing trusts) and their involement keeps the whole process a matter that can be subject to council public meeting feedback.

    Objection to this, is no more pertinent than objecting to the coalition with a majority in parliament also running the executive and appointing people to sit on various boards/quangos.

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  13. Kevin (988 comments) says:

    “Local Councillors would be able buy support”

    But that’s exactly what they do now with ratepayers money. Council and community boards hand out millions of dollars to any weird whacky bs groups that care to front up. Like the scams in,Auckland,we’re Somali immigrants,were given money to phone home during their elections. Or they become patrons of,the arts courtesy of the ratepayer like the ludicrous cigarette packet sized copper model of a house they funded in potters park,at over $10,000.

    It is a hideous idea
    Exactly, but unfortunately even now the usual subjects from councils and community boards often occupy places on the trusts handing out the money. Not only that, often they are on the charities receiving the funds.

    y whole charitable system is a mess with most charities receiving most of their money from lobbying central and local government for handouts.gone are the days most of them make their money from collecting direct from the public.

    Bottom line…Don’t trust nut bars on councils to handout money -we should roll back the scam where they can buy votes by handing our rates as it is.

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