The Gaming Industry in NZ awaits the Government’s roll of the dice

Karen Walker
September 2000

    The challenge for Helen Clark’s Labor Government with the soon to be announced Gaming Law Reform Bill is the curly one of aligning regulatory and policy framework with their social and economic objectives.  Namely, addressing the social costs associated with gaming, also economically a growth industry for New Zealand.

    Gaming is a major employer in New Zealand and contributes significantly to taxation, and community organizations and purposes. In 1998 the industry contributed NZ$140m in taxation, and approximately NZ$120m in GST and income tax on its’ products. In the same year around NZ$200 - NZ$300m was contributed to community purposes, and a further NZ$70m to racing clubs, a significant and precious export industry for New Zealand.

    As the Gaming Law Reform Bill is currently being considered by the Government Administration Select committee and is due to be reported back to Parliament by mid-October 2000, the Gaming Industry in New Zealand is looking over its’ shoulder at recent policy initiatives on gambling in Australia. The Hospitality Association of New Zealand (HANZ) at its’ convention and trade fair in Christchurch next month has included a gaming forum on the Australian experience as part of the agenda. Although in New Zealand profits from non-casino gaming machine activities legislated under The Gaming and Lotteries Act differ from Australian jurisdictions in that they cannot be used for personal or commercial gain, but must benefit the wider community, key issues remain the same. So too then, must the Minister of Internal Affairs, Mark Burton and his department, be keeping a keen eye on Australian gaming legislative initiatives and policy development.

    So, how does the gaming industry in New Zealand currently compare to our Australian counterparts? From a legislative viewpoint, the gaming regulatory framework in New Zealand has largely been left untouched by market reforms over the past 15 years, and is fragmented over several different Acts. This makes the legislation difficult to administer, inflexible to technological changes, and inconsistent across different areas of the industry. The Racing Industry for example, has often voiced their concerns about the unfairness of the 20% duty that they pay on expenditure, while casinos pay only 4%. The Racing Act with its’ emphasis on ‘facilities and amenities’ through levies paid to an ‘Amenities Account’ lends itself to distortion in investment decisions, such as racecourse facilities. Likewise, the far more stringent regulations applied to housie in comparison to non-casino gaming machines, does not reflect the risk of twenty times more spent by gaming machine players than housie players.

    A review of principle gaming legislation in Australia, although with current and ongoing reform, paints a similar picture of disjointed regulatory framework, where NSW alone has 23 different Acts covering gaming and racing. Recent policy initiatives in NSW, Queensland and Victoria reflect their governments’ desire to gain more power to introduce regulations on responsible gaming. The Gambling Legislation Amendment (Responsible Gambling) Act 1999 was passed by the NSW parliament late last year. To date, only regulations relating to gaming machines in hotels and clubs have commenced, such as a freeze announced on 28 March on numbers of gaming machines in clubs, and the introduction of a requirement for a social impact assessment to be prepared where clubs or hotels apply to increase the number of gaming machines or relocate premises. The regulations also include detailed provisions on gambling advertisement, gambling promotions, training of staff and the provision of player information, including information about the chances of winning prizes.

    The Gambling Legislation (Responsible Gambling) Act 2000 was passed by the Victorian Parliament in May and includes a restriction on the number of gaming machines at the Crown Casino, imposition of regional limits on gaming machines, restrictions on 24 hour gaming venues, and gives the Government the power to make regulations on the provision of relevant information about gaming to the players of gaming machines. In April 2000 the Queensland Government released a paper entitled "Policy Direction for Gambling in Queensland". This also addressed maximum numbers of machines in club and hotel venues, community impact statement requirements for new site applications, signage, and location of gaming machines being some distance from ATMs and EFTPOS facilities.  In Queensland by April 2001, banknote acceptors in clubs, hotels and casinos will be limited to accepting a maximum A$20 note and an industry Responsible Gambling Code of Practice and an Advertising Code of Practice developed and implemented.

    The Labor Government in Victoria in addition to passing The Gambling Legislation (Responsible Gambling) Bill sought public comment in April on a range of initiatives to develop policy to meet community expectations. Victoria has 30,000 gaming machines (approximately double those available in New Zealand), state of the art information technology systems for monitoring gaming machines, and tax earnings of approximately A$1 billion per year from gaming machines alone. It will be very interesting to monitor how Bracks’ Labor Government continues to respond to their election commitment to create a stronger regulatory environment and a more balanced approach to gambling, with legislation emerging from the results of the consultation paper.

    However, conflict between Australian State and Commonwealth governments on gaming policy and regulation has been highlighted by the recent and ongoing debate on interactive/internet gaming in Australia. In June the Australian Commonwealth government announced it would introduce legislation to impose a twelve-month moratorium on the introduction of new interactive gaming services and that ‘it remains disposed to a permanent ban on interactive gambling’. With all but two of Australian states formally announcing their opposition in April to a proposed moratorium on issuing of new Internet gaming licenses, it is a sure bet that further fireworks regarding States’ rights to independently govern gaming and the associated revenues, will continue. Last month key legislation prohibiting internet gambling failed to pass through the US Congress, yet another indication of the difficulty facing government seeking to make major reforms to gaming legislation, and particularly in relation to technology based gaming.

    So what policy initiatives can the New Zealand Gaming Industry expect from the Government? The ‘Taking the Pulse on Gambling and Problem Gambling In New Zealand: A report on phase one of the 1999 National Prevalence Survey’ released in June this year found that approximately one-in-four people who reported weekly gaming machine participation and one-in-five weekly track betters had experienced gambling problems at some time. The Gaming Law Reform Bill currently before the Government Administration Select committee seeks to improve casino licensing processes; formalise the legal foundation for gaming machine licensing and regulation; and address some of the social impacts of casinos and non-casino gaming machines. Therefore problem gambling and electronic monitoring of gaming machines are key issues to be addressed.  How far it will seek to control numbers of gaming machines, advertising by operators, training of staff, and monitoring of gaming machines, in addition to the major task of reworking the policy and regulatory framework for the gaming and racing industries is the question.  Besides wondering which one of the recent gambling reform policy initiatives passed in Australia it may be modelled on.

    And if I had to make a bet on how the NZ Government may model the Gaming Law Reform Bill? Bracks’ Labor Government approach to changing regulation of the gaming industry, the Victorian use of information technology for the electronic monitoring of gaming machines, and the BetSafe responsible service of gambling training program in NSW look like winners.

Karen Walker
Managing Director
Clever Cookie Consultancy Limited
PO Box 28
Oneroa   Waiheke Island
New Zealand

Ph:    9 372 8723

Author’s Profile
    Karen Walker, Managing Director of Clever Cookie Consultancy Limited delivers her experience of over 10 years in the Gaming Industry in Australasia as a competitive advantage to your Gaming venue. This experience encompasses Hotel and Club gaming machine venues, Casinos and regulatory environments, in senior management, audit and inspection, and training and technical support roles.
    Typically Karen has been involved with the operation of new organizations, their successful opening/implementation, and continued business growth and improvements, including developing the best people. Sky City Casino in Auckland, Government Inspectorate of the Crown Casino in Melbourne, the Tabaret venue in Melbourne, gaming machine hotel and club venues in Victoria, the Australian Centre for Unisys Software in Melbourne, and Cadbury Schweppes in Australia are organizations Karen has worked with during the creation of new business, products or services.
    Most recently Karen was a Senior Operations Manager with Sky City Casino, New Zealand’s most successful entertainment and leisure destination. In her role as Shift Manager Gaming Machines, for four years from Sky City’s opening in Auckland in early 1996, Karen made a significant contribution to the performance and growth of Sky City’s most profitable business unit. Karen brings management experience, empathy with people and a practical background in coaching, mentoring, adult education and support roles to her work.
    Karen enjoys the challenge of working with individuals and organizations committed to continued growth, learning and striving for excellence