Peter Adams: Remember who really pays in SkyCity deal

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The recent report by Deputy Auditor-General Phillippa Smith revealed ongoing links between John Key and SkyCity executives dating back to his first days as Prime Minister. Photo / Jason Dorday
The recent report by Deputy Auditor-General Phillippa Smith revealed ongoing links between John Key and SkyCity executives dating back to his first days as Prime Minister. Photo / Jason Dorday

John Key's deal with SkyCity over the convention centre funding exposes how government leadership interacts with gambling and other addiction industries.

Two things stand out in the deal where Mr Key gets a new convention centre for Auckland in exchange for a special liberalising of the gambling legislation for SkyCity.

First is the ability of gambling industry executives to foster close ties with government power brokers. Second, on the back of this, is the way in which their money is used to influence policy and legislation.

Such connections are not unusual. Executives from addictive industries like tobacco and alcohol have for generations pursued their interests with governments all over the world. What is unusual is having these processes so exposed - and exposed in such an unabashed fashion.

The recent report by Deputy Auditor-General Phillippa Smith revealed ongoing links between Mr John Key and SkyCity executives dating back to his first days as Prime Minister.

How is it possible for executives to so successfully engage the country's leadership when public health professionals are seldom offered such advantages? The same question was raised in December 2011 by Professor Doug Sellman when he challenged the minister responsible for alcohol policy, Peter Dunne, for engaging strongly with the alcohol industry and virtually ignoring leaders in public health.

Once relationships between politicians and addictive industries are set in place they then provide the platform upon which deals can be struck. But Mr Key's "deal" tramples over the public health provisions of our current Gambling Act. It fails to address in any way the extra harms that loosening of regulations will have on problem gamblers and their families; their needs are cut right out of the arrangement.

Most people are familiar with the way legalised addictive consumptions contribute significantly to poor health, social harm, crime, family misery and mental disorders. Stories on the harmful impacts of alcohol and gambling on people and families appear regularly in our papers. What is less commonly discussed are the reasons why it is so difficult to address these issues.

A key aspect to the commercialisation of high-volume addictive products is the ability to generate add-on profits way beyond those of ordinary, non-addictive products, such as petrol and pizza. Addicted consumers, by the very nature of addictive behaviour, will consume to excess. Although they are considerably fewer than non-addicted consumers, they invest more heavily and, accordingly, contribute far more to profits. For example, Australian studies indicate that although the prevalence of problem gamblers is 1 or 2 per cent of most adult populations, problem gamblers contribute 40 to 50 per cent of what is spent on pokies.

This add-on money from addicted consumers then provides the financial base for a range of activities capable of influencing policy, regulation and public perceptions. It enables addiction industries to engage advertisers, lobbyists, PR companies and law firms in targeting the public with high profile charities and sports sponsorship and politicians with party donations, hospitality options, cross-board memberships and personal business involvements. The nature and extent of money involved in these activities are typically undisclosed.

We know little about the specific detail of these relationships and the overall processes by which such influences are exerted. This is unfortunate because it is these relationships that tend to determine whether initiatives at reducing harm get off the ground.

We saw this play out recently with the liquor reform bill, where, despite strong public outcry and evidence for public health interventions, the Government has only managed to embrace minor changes.

If Mr Key was to look seriously at a balanced deal he would also need to seriously consider ways of addressing the harms that such arrangements could create. For example, if he is set on more pokies then perhaps he could include in his deal some provision for reducing their addictive potency in casinos. Options could include: constraints on jackpots, limits on the number or rapidity of bets, the ability of players to set limits on how much they spend, and many other features currently being applied in similar settings around the world.

Associate Professor Peter Adams, Centre for Addiction Research, University of Auckland, is author of Gambling, Freedom and Democracy.

- NZ Herald

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