Bounty from the pokies shrinking to smaller pot

It's a vicious cycle. The country's huge and hungry sports sector - which relies on gambling - is facing dwindling handouts, and that means fewer chances for players from poorer families

Photo / Christine Cornege
Photo / Christine Cornege

The worm has already turned.

A combination of tighter regulation and a growing public unease about the negative social impact of gaming machines has sent the industry into a steady decline. The number of pokies in New Zealand has eased back steadily from its peak of 25,221 in 2003. Spending on pokies declined by $36.7 million over the past financial year, and dropped a further 10 per cent in the first three months of this year.

In the year to June, the number of bars and clubs offering pokies declined from 1400 to 1356, and the number of gaming machines in them decreased from 17,943 to 17,534.

Kiwis still tip over $800 million a year into the machines, but the pool of cash for community distribution is shrinking. That's bad news for a sports sector that gobbles up around 40 per cent of the pot.

"Absolutely," says Softball NZ acting chief executive Fay Freeman when asked if the declining revenue stream was a concern.

"It is going to change the nature of sport. People have been preparing for it for a long time."

Administrators would have to work smarter and do more with less, but the ultimate cost would be met by poorer families, who will miss out on sporting opportunities.

"It will just mean that those who can afford to play will play," says Ms Freeman. "I don't see any alternatives really. I don't see the money completely running out. There has been gambling since the start of time in some form or other. But probably many of the sources of gambling didn't lead to addiction like pokie machines."

Rugby is already adapting to the changing landscape, says New Zealand Rugby Union chief executive Steve Tew. Provincial unions have suffered a significant drop in revenue as pokie money has begun to dry up.

"They've either had to find other sources of income or cut their costs," he says. "We've seen plenty of examples of both over the last two or three years and I think that is a good thing. It might well be that clubs have to go back to some of the old fund-raising measures, but they are labour-intensive and the number of people who volunteer in this modern society of ours is also decreasing."

For people like gambling harm researcher Peter Adams, change has been painfully slow coming, and is far from complete. It's one thing pointing to the harm created by a system with obvious moral flaws, quite another breaking down a community of vested interests that include venue operators, gaming trusts, the Government and funding recipients.

Professor Adams has been banging the pokie-harm drum for two decades. He's given up on getting the government to listen, but sees hope in a public mood that has become less tolerant of the gaming industry alliance.

"It's awful in the government sector," he says. "The issue is not taken seriously and there is no interest at all about doing anything serious about problem gambling. I don't see much hope coming from there. I see the hope coming from communities and individuals who find the sets of relationships we are establishing uncomfortable.

"I just think we should be opening up this discussion really widely. Are we comfortable with this being the framework for the long term?"

If we're not, what are the alternatives? Very few revenue sources are guilt-free, says Ben Marris of gaming industry consultancy Marco Management.

If we fund sport out of general taxation, some of the money will have been collected from taxes on tobacco, alcohol and, yes, gambling. Is that really much better than channelling money from a heavily regulated gambling industry into the community, however dubious the delivery mechanism?

"I'm not sure we are actually in the position to create utopia in this particular case," says Mr Marris. "There is always going to be an element of a tax on sin, and there is always going to be an element of some form of misery. In all of these things, if you are being relatively calm about it, there is always going to be an element of balance. The question is do we have the balance right? I'm a big fan of not criticising something unless I have a better solution. That's not to say that our current situation is right, I'm just not sure I have a better solution."

The search for a solution hasn't been extensive to date. The problem gambling lobby has been flat out simply trying to convince people there is an issue to be addressed, while sports bodies expend so much energy trying to access funding they appear to have had little time for considering the morality of its source.

Sports bodies also operate in a climate of fear. Some administrators barely acknowledged the issue. Those who do expressed private fears that speaking out on the record could result in their sports being blacklisted by the trusts that control their funding.

As a former chief executive of the Health Sponsorship Council, Basketball NZ boss Iain Potter has worked on both sides of the fence. Whether we find a way to wean sport off gambling money will come down to public will, he says.

"If we say that we believe physical activity is a huge part of what makes up Kiwi culture, then we find a way of paying for it," he says. "To do that you have to have the discussion. I would strongly advocate the view that sport and recreation is of huge benefit to all communities and therefore it is appropriate that revenue be collected from people and invested. But are people up for 0.1 per cent on their tax or an extra 3c on their petrol? Do people see that as a way to gather revenue for sport and recreation? That is the conversation."

New Zealand isn't the only country dealing with the increasing influence of gambling in sports. Soccer in England has a long association with betting, however there are now serious concerns over the extent to which the relationship has grown.

A decade ago there was one gambling company acting as a shirt sponsor across Europe's major five leagues. By 2011 that number had risen to 26 and it is still clambering upwards. The UK gambling sponsorship market is estimated to have risen 350 per cent in the five years to 2011.

Yesterday it emerged that Professional Footballers' Association boss Gordon Taylor is being investigated over reports he has a £100,000 ($198,000) gambling debt. The Sun newspaper alleges Mr Taylor - who spoke out about the dangers of gambling during cricket's spot-fixing scandal - bet £4 million over two years, and £47,500 on horse racing in one day in January. He also bet on football matches.

It was the NZRU's submission to the select committee considering the Gambling Harm Reduction Bill that prompted the Herald's investigation into the level of gambling money in sport. That submission argued that the measures proposed by Maori Party MP Te Ururoa Flavell would do "lasting and widespread harm" to New Zealand sport.

When it was redrafted after the select committee, only the title and purpose of the bill remained. The rewrite was so complete that the likes of Professor Adams believe a piece of legislation designed to give communities more control over pokies actually hands more power to the gaming industry, and may even do more harm than good.

In acting to protect a revenue source it uses to enhance its community programmes and facilities, rugby's motives were pure enough. But whether sport has really considered the social cost of gambling funding is debatable.

"Is it right for sport to be benefiting from problem gambling - clearly the answer is no," says Mr Tew. "But it is not a standalone question. It is very easy to stand on the moral high ground, but it is not straightforward. Is this a major societal issue? I guess that is for someone else to judge."

Total gambling money*

Rugby - $23,192,037
"Unless we can find some way to replace a significant amount of money, and then find some way of not restricting people's rights to have a pleasurable gamble from time to time, then I just wonder where the debate goes to, quite frankly. You just waste a lot of breath on it." - NZRU chief executive Steve Tew

Soccer - $11,050,000
NZ Football executive Grant McKavanagh resigned during the Herald's investigation into the level of gambling funding in sport. He advised that no one at NZF could respond to the Herald's questions.

Cricket - $9,001,268
"We acknowledge that problem gambling does create harm in our community and we agree efforts need to be made to reduce this harm. Gambling in New Zealand is legal and for most people is harmless fun. We believe the money has a positive influence on the growth of the sport and the community." - Cricket NZ chief executive David White

Basketball - $6,347,427
"It's a hard world to imagine. There are all sorts of models but at the end somebody pays." - Basketball NZ chief Iain Potter on life without gambling revenue.

Netball - $4,811,558
"Everybody in the [netball] community is aware of the sensitivities around the issue of problem gambling ... which is why, to the extent we can look for other sources of funding, we have been trying to do that." - Raewyn Lovett, Netball NZ chair

League - $4,119,462
"It's a good model. There has always been a focus on maximising return to the community." - NZRL chief executive Phil Holden on the community gaming charitable funding model.

Softball - $2,828,413
"If there were other sources of funds, fantastic. What do you suggest happens? Where do suggest the money goes, into the pockets of the people who run the gambling machines? If it went away a lot of sport would stop. There would be grassroots sport but beyond that it wouldn't really happen." - Softball NZ interim chief executive Fay Freeman.

* Total gambling money, excluding High Performance Sport NZ funding. 2012 figures.

- NZ Herald

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