Our love of a punt keeps sports success coming

By Steve Deane

If it wasn't for the gambling sector stepping in, community sport faced Armageddon.
If it wasn't for the gambling sector stepping in, community sport faced Armageddon.

We're a nation of brilliant rugby players. Champion yachties. World-beating stone throwers. Occasionally successful cricketers. Nimble netballers. Unbeatable rowers ... and so on. But we wouldn't be any of that without being a nation of gamblers.

We've always gambled and we will always gamble. Luckily for our national sporting psyche we're not much good at it. Because the more we lose, the better off we are as a sporting nation. That's because around the turn of the century we struck upon a brilliant plan to fund the sporting sector. Out with the meat pack raffle, in with ring fencing gambling, and latching on to about 40 per cent of our national losses.

In the end the house always wins, and so too does sport. Ask around the sporting sector and you won't find many folk who think sport would survive without its annual $180 million-odd gambling cash infusion.

Sport as we know it has changed. What was once propped up by teams of enthusiastic volunteers, a thriving social hub based around clubrooms, and healthy fee-paying player bases, is now the preserve of regional and club development officers, coaching contractors and all-weather turfs.

People's habits have changed, too. Fewer people drink at the clubs, so bar revenue has tanked, and there are fewer volunteers. We still want to play, but no one wants to pay, so fees need to be subsidised.

If it wasn't for the gambling sector stepping in, community sport faced Armageddon, if you believe the spiel that comes from the funding organisations.

"We live in a completely different world," says New Zealand Rugby Union chief executive Steve Tew.

"It's a completely academic exercise to compare how a sporting identity, or for that matter any other community agency, operates now compared to 15 years or 20 years ago. We didn't have pay television, we didn't have the internet, we didn't have a high proportion of our parents bringing their kids up on their own, and we didn't have kids wanting to work to earn money to buy cellphones and the like."

And we didn't have more than two billion dollars of gambling revenue to carve up.

Kiwis have embraced the gambling opportunities that have come our way since 1987 - Lotto, casinos, sports betting and gaming machines.

As a nation we spend 10 times more now on gambling than we did pre-1987. Non-casino gaming machines were the biggest growth sector, with the number increasing from 7770 in 1994 to a peak of 25,221 in 2003.

"There's no doubt it was the wild west and grew unabated," says former Lion Foundation chief executive Phil Holden. "But to put that in context there are 120,000 machines in New South Wales alone."

But while Australia has little regulation around its pokie industry, New Zealand has long operated a trust system that creates a vast pot of money for distribution. Sport's cut has been substantial.

"Ten to 15 years ago there wasn't that much money floating around," says Ben Marris of gaming industry consultant Marco Management. "Every year everyone got a little bit more and a little bit more and all of a sudden there are these fleets of Corollas roaring around with people in them all funded out of it."

Society has indeed changed. However, it is hard to see how the changes in the sports sector haven't been at least partially driven by the availability of billions of dollars of soft money over the past decade and a half.

With a national lottery subsidising elite athletes, sports betting propping up national bodies and the gaming sector bankrolling facilities and salaries in the community sector, New Zealand's sports funding system is geared towards gambling revenue at every level.

It's a unique approach.

Holden, now chief executive of New Zealand Rugby League, points to the $274 million a year in trust funding and an additional $220 million in Crown funding through taxation as evidence of the system's effectiveness.

"It's a good model," he says. "There has always been a huge focus on maximising the return to the community because that is how the model works."

Others question that. For each dollar lost in a pokie just 37.2 cents must make its way through a trust and on to the community. The rest goes to the Government, site operators, administration costs and a levy to help clean up the mess created by problem gambling.

The trust funding system is also erratic. Grant applications take time and effort to prepare and results are far from guaranteed, leading to a climate of uncertainty.

A common theme from codes that do not enjoy the luxury of extensive television time and corporate sponsorship revenue is that there simply aren't any other sources of funding out there to meet the overheads associated with running their sport at grassroots level while also producing competitive national teams and programmes.

The lack of separation between community and elite sport is clearly an issue.

Community sport pays the piper for a national ego that won't accept mediocrity on the international stage, says Basketball New Zealand chief executive Iain Potter.

"Since 1990 more and more dough was put into high performance, to achieving wins," Potter says. "Rugby has gone professional and netball is semi-professional. All that money isn't just coming from commercial revenues. That money is coming out of the sport. No matter how many bamboo walls you put in place, it is being drawn out of sport."

BBNZ's Tall Ferns and Tall Ferns programmes this year cost $370,000.

"That's in a sport where we do not pay our players to represent their country. If I didn't have to pay that, I'd be spending $370,000 on the participation and development side of the sport."

Whether sport has made good use of the gambling cash cow is also a matter of debate. John Stansfield, the head of Unitec's Social Practice Department and a former chief executive of the Problem Gambling Foundation, says participation has declined despite the huge amount of cash thrown at the sector.

"Sport is second only to the health system in its ability to soak up all available cash," Stansfield says. "If you drive up and down the country you will see empty rugby clubs all over the place that were all built with lottery grants. They are dead."

Sport's voracious appetite for gambling money appeared hard to justify. For example, in 2000 the sport of swimming in New Zealand required about $500,000 of gaming revenue to survive. Five years later that had grown to $2.5 million, Mr Stansfield says.

"There weren't five times more people swimming and the price of a rubber hat and pair of budgie smugglers hadn't gone up by five times over that period."

Whether sport has changed to meet the requirements of modern life, or become corrupted by a sea of gambling money will eventually be a moot point.

Central and local government policy has begun to restrict the operation of gaming machines. The number of machines has declined more than 30 per cent since 2003, with the revenue generated also falling.

"I think we are gearing up for the reality that in five years time or 10 years time this pokie machine money won't happen," says Derek Rope of College Rifles Sports Club - an organisation that has used gaming trust money to fund more than $1 million of capital improvements in recent years.

"Every sport has got to start getting ready for that day. It is going to happen."

So where will that leave this nation of champions?

"I don't know what effect it is going to have on grassroots sport in this country," says Rope.

"I'd hate to see a situation like in the United States where if you are not in a college football team you don't play sport. I'd hate to see us get like that. Look at the superb athletes this country produces. Without that funding they'd never get there."

Track record

1877:The Otago Art Society holds the nation's first lottery.

1933: National lotteries - knows as an Art Union - introduced.

1961: With interest in Art Unions flagging, the National government introduces Golden Kiwi lottery. All 250,000 tickets sell within a day and half. The first prize is 12,000, enough to buy a three-bedroom house in Wellington and a new car.

1973: The first gaming machines make their way across the Tasman from Australia.

1987: Lotto launches to national excitement, with long queues forming at the doors of ticketing establishments as Kiwis clamour for a shot at the division one prize of $360,000. In Lotto's first year Kiwis spend nearly $249 million.

1988: Electronic gaming machines regulated. The maximum prize is set at $100. 78 per cent of turnover must be returned as prizes and the rest given to charity.

1994: The country's first casino opens in Christchurch.

1996: Kiwis can legally bet on sports for the first time, with the TAB legislated to operate all sports betting.

2003: The Gambling Act 2003 is introduced to counter the rapid, uncontrolled growth and rampant corruption in the gaming machine sector. The number of poker machines peaks at 25,221. A sinking-lid policy introduced by some councils that means machines can't be relocated or replaced starts a gradual decline in the number of pokies.

2013: Latest figures put the number of poker machines in the country at 17,534 - a decline of 7687 since the 2003 peak.

Today: The national gambling spend is more than $2 billion a year.

- NZ Herald

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