Auckland Council crackdown on taverns with pokies acting as 'gambling shops' applauded

An Auckland Council investigation found 13 taverns across the city were operating primarily as "gambling shops". Photo / File

A crackdown on Auckland taverns acting as "gambling shops" has found issues with more than a dozen establishments, and several have been forced to shut up shop.

The Problem Gambling Foundation has applauded Auckland Council's investigations, and is calling on councils across the country to step up their own compliance monitoring.

Auckland Council inspectors revealed last year they were aware of 28 taverns with pokies coming up for liquor licence renewal that were thought to be operating primarily in the business of gambling, rather than selling alcohol.

Taverns that hold liquor licences are allowed to also provide electronic gambling machines (pokies), but the primary focus must be in selling food and beverages.

The concerned establishments stretched across all corners of the city, but with a predominance in South Auckland, including 12 in Manukau alone.

A report on the investigations provided to the council's Regulatory Committee found 13 to be too focused on gambling, while 15 were operating within their licence conditions and operating primarily as taverns.

Principal alcohol licensing specialist Rob Abbott said their decisions were based mainly on inspecting revenue streams, but also asking why patrons were visiting the taverns, public perceptions and what other activities were on the premises.

The worst of the bunch was taking in 55 per cent revenue from pokies, and just 19 per cent from alcohol. Abbott said the worst they'd come across in the past was a tavern five years ago that was taking in 90 per cent revenue from pokies.

Not all inspections ran smoothly; inspectors had been subjected to "some threatening behaviour from both patrons and staff".

"It was mostly people upset at our inspectors being on the premises, staff realising their licence might be jeopardy, but also patrons crowding around them," Abbott said.

Those incidents were factored into the licensing decisions, but no further actions were taken, Abbott said.

Some taverns even refused to provide information, and inspectors had to obtain orders from the District Licensing Committee requiring the information be provided.

Problem Gambling Foundation chief executive Paula Snowden said her organisation was "very happy" with the council's investigative work. Photo / File

Two taverns subsequently had their licence applications declined, one surrendered their licence, one closed and another was likely to close. The rest were either going through the liquor licensing process or were about to.

Council staff had identified a further eight questionable taverns coming up for licence renewal this year or early next year that would be investigated.

Abbott said as a result of their investigations taverns were paying more attention to ensuring they adhered to their principal business being that of a tavern rather than a "gambling shop".

"There are over 200 public bars in Auckland with pokies, and less than 10 per cent have cause for concern, so it is not widespread and I think as a result of our work it is becoming less of a problem."

Problem Gambling Foundation chief executive Paula Snowden said her organisation was "very happy" with the council's investigative work.

"It is something we would love to see every council across the country getting out and doing.

"The law is very clear, if you own a venue with pokie machines, you cannot rely on them for income.

"The easy way to check is to look at the annual accounts, so we think it is great the council is doing that."

Snowden said they had been aware of the issue for a while, and wanted the Department of Internal Affairs, which licenses the machines themselves, to step up its own monitoring.

According to the DIA, pokies were class 4 gambling and could only be conducted by a corporate society, and only to raise money for an authorised (community and non-commercial) purpose.

Snowden said more than $800m a year was being taken out of the community through gambling, but only $370m was distributed back, and often not directly to the impacted communities.

The rest of the money went to the societies that held licences for the machines to cover costs, some of it tax, and an amount negotiated with the tavern for hosting the machines.

"The reality is the majority is not going back into the affected communities, and what happens to the rest is very murky," Snowden said.

"The only opportunity for the council to act is when the taverns are up for liquor licence renewal every three years, but then we might have three years of them running as a pokie den.

"We also know 50 per cent of these pokies are in the poorest areas, the areas with lowest health outcomes.

"The idea that pokies are just a bit of casual fun is not true for a small amount of people, their families and employers, to whom it causes a massive amount of harm."