The decision to stop public funding of the Problem Gambling Foundation, except for its Asian services, came as a bolt from the blue to all sides. Simon Collins investigates

A gambling industry leader was among the first people knocking on the Salvation Army's door this week after news broke that the army had displaced the country's main help agency for gambling addicts, the Problem Gambling Foundation.

"We will be moving very quickly to establish a relationship with the Salvation Army," explains Brian Corbett, who chairs the Community Gaming Association.

"We at the CGA have tried to take a collaborative approach to the problem, but that didn't seem to be the way with the Problem Gambling Foundation. They seemed to take a fairly antagonistic approach to everything."

That "antagonistic approach" has made enemies of both the gambling industry and successive governments ever since the foundation began, originally as the Compulsive Gambling Society, 26 years ago.


Yet, even Corbett uses the same words as the foundation's chief executive Graeme Ramsey of the Health Ministry's shock decision to stop funding the foundation from June 30, except for its service for Asians — "a bolt from the blue".

The shock reached beyond these islands. Wollongong University professor Samantha Thomas wrote: "The Problem Gambling Foundation of New Zealand led the world in gambling harm prevention. And last week we were devastated to learn that the NZ Government had stripped it of the vast majority of its funding."

Labour and Green politicians here were quick to claim the PGF was punished for opposing Prime Minister John Key's deal giving Auckland's SkyCity casino an extra 230 poker machines and up to 240 table game player stations in exchange for building a convention centre.

The truth may be more complex.

Value for money?

The official line, stated by Associate Health Minister Peter Dunne, is that the ministry put problem gambling services out for tender merely to get the best value for money.

"The development of the sector has to a large extent been undertaken in an ad hoc manner, with the duplication of services from national providers simply not achieving best value for money," he said.

Key's Government has put the entire public service under intense pressure to achieve more with less.


Public Health Association chief executive Warren Lindberg says the Health Ministry was told in 2012 to cut public health spending by 10 per cent by 2016.

The ministry's $18.7 million a year problem gambling budget is funded by a levy on the gambling industry, but that has not exempted it from the efficiency drive.

The gambling helpline was merged with Lifeline in 2011 and had its funding cut by $400,000 last year to $1.1 million after a value-for-money study by accountants KPMG.

The picture is not so clear-cut for the $11.8 million that was put out to tender last July for face-to-face counselling and public health promotion to reduce gambling harm.

Tender documents specified the numbers of fulltime-equivalent staff the ministry wanted in each region, totalling 69 for counselling and 52 for public health, and the maximum prices for each — $102,000 for counselling and $92,000 for public health, including overheads.

PGF tendered for 31 counselling and 29.8 public health staff at the maximum prices. Salvation Army addictions director Captain Gerry Walker says the army bid for more than its existing 18 staff (how many more is unclear), but at the same prices.

The KPMG study found that counselling and public health spending, including the PGF's $4.7 million, provided generally good value for money, with a higher use of problem gambling services per person than in other countries.

But it noted disadvantages for the three agencies — of which PGF is by far the biggest — that focus purely on problem gambling.

"Economies of scale would exist if problem gambling services were integrated with other health or social services," it said.

It also noted "considerable health benefits" of integrated services because many gamblers also have other addictions or mental health issues and consequential problems with budgeting, housing and relationships.

This would have counted in favour of the only other national provider, the Salvation Army, whose six Oasis problem gambling centres with 18 staff are all co-located with other social services.

However, other factors must have counted against this. PGF's narrow focus on gambling, while possibly less efficient, has made it arguably more effective. Its 63 staff and its national and global knowledge base have made it the place to go to for information or support for problem gamblers, their families, councils formulating gambling policies, researchers, journalists and concerned citizens.

Its latest six-monthly report to the ministry records its staff's leading role in campaigns to bring in "sinking lids" on pokies in various council districts, analysing grants by pokie trusts, helping clients to ban themselves from multiple pokie venues, promoting pokie-free venues, organising events for Gamble-free Day, running stalls at public events and working in prisons.

KPMG found it impossible to measure the outcomes of these activities. It did measure outputs in numbers of counselling sessions, and found, for what it's worth, that PGF achieved exactly 100 per cent of its targeted sessions in 2010, against less than 80 per cent of the target at the Salvation Army.

Highly political

It seems, therefore, that there must have been more to this decision than economics. There seems to have been a view that PGF was using industry levy money on "political" activities, rather than the intended counselling and health promotion.

There is no evidence that anyone in the Beehive told the Health Ministry to stop funding PGF. But former chief executive John Stansfield says: "I have no doubt that the ministry was tiring of being the go-between between PGF and political complaints."

PGF has always been highly political. Stansfield's partner is Green MP Denise Roche and his media adviser was ex-Green MP Sue Bradford's husband, Bill Bradford. Ramsey, the current chief executive, is a Northland regional councillor. The board is chaired by former Labour MP Richard Northey.

The agency's public health director Tony Milne is Labour's candidate for Christchurch Central.

Psychologist Dr Peter Adams, who chaired the board from 1997 to 2002, says the agency sought people with "political nous" because "that's where the action is".

"The gambling industry is very highly politicised. We can't have someone who is just 'business as usual' because in this area it's never business as usual," he says.

He says the agency was founded to support problem gamblers and felt obliged to speak out for them.

"If you are a practitioner sitting hearing the same misery day after day, would you not want to make that misery more transparent?" he asks.

The price has been a series of funding crises. The agency's funding was stopped and all staff faced redundancy in 1996-97, but the foundation won a High Court challenge by showing that the funding committee was biased against it.

John Stansfield recalls a time, during his term at PGF from 2003 to 2008, when the ministry tried to stop PGF's work in prisons because its gambling work there cost more than the amount being spent on alcohol and drug addictions.

He refused to sign the contract and held out for four months with no pay until the ministry agreed to let the agency keep working in prisons.

Eighteen months ago, Northey says, the ministry complained about PGF's "pokie-free venue" campaign on the basis that "it's not the Government's policy that NZ be free of pokie machines".

Last year PGF supported a successful High Court challenge by the Cancer Society against ministry approval of a smoking lounge at the SkyCity casino.

Ramsey confirms that PGF also "had a significant hand" in a bill brought by Maori Party MP Te Ururoa Flavell last year to empower councils to reduce or ban pokies in low-income areas and require at least 80 per cent of proceeds to go back to the area they came from.

National opposed the bill and it was eventually passed after removing the key changes.

Psychologist Dr Peter Townshend, who was PGF's research director from 2005 until he left for a new job in Australia last year, says he has no doubt that PGF's "very political" approach was the key reason for axing its funding.

"I have always pointed out the risks, and always pointed out that as an organisation that gets its credibility from its clinical services, it's really important to have an emphasis on the clinical services." Fair process?

The ministry has gone to great lengths to make its handling of the tender legally watertight. A six-person panel that evaluated the bids included one official each from the Health Promotion Agency and Internal Affairs Department and a Pacific health consultant, as well as three ministry officials.

Successful bidders were due to be notified on November 4, with new contracts to start from January, but instead contracts were rolled over to June 30 and the ministry commissioned PricewaterhouseCoopers to review its proposed decisions.

Nevertheless, PGF has consulted Auckland lawyer Mai Chen about a judicial review.

Stansfield, who has started the Save Problem Gambling Foundation petition, says there is "no natural justice" in axing PGF's funding for political reasons without giving it a chance to explain.

"Rumours of our death," he says, "have been vastly overstated."

Problem gambling counsellors Bonnie Lovich-Howitt (left) and Rufo Pupuali'i worry how they and their clients will cope after the funding cut. Photo / Richard Robinson

Counsellors fear changes will undermine recoveries

Helping someone overcome a gambling addiction takes time and trust, say Problem Gambling Foundation counsellors Bonnie Lovich-Howitt and Rufo Pupuali'i.

"I see people who are ambivalent or not sure," says Lovich-Howitt, who often gets approaches at community festivals or other events where the PGF has a presence.

"We try to provide them with as many tools as we possibly can, so that when they are more determined in their actions they have an idea of where to start.

"Before last Thursday I'd say, 'Come back and see us at any time, we're always here'. I don't know that I can say that any more."

The decision to stop funding all PGF's activities except its Asian services has left its 63 staff "stunned" and "traumatised".

Partly for themselves.

Her partner works but they have debts and have partial care of her partner's children.

She does not know how they will cope if her job disappears.

"We wouldn't be able to afford the house we're living in," she says. "We wouldn't be able to pay our loan, we wouldn't be able to support his kids, we wouldn't be able to get married, I wouldn't be able to go to my sister's wedding [in Australia next year].

"But if I'm thinking this way, I really feel for our clients, because as hard as this unknown is for us, it's even more difficult for them.

"These people take such a huge leap of faith when they ring us to make an appointment. With some people it can take months. They keep not showing up, and finally have the courage to walk through the door, and now we have to say, 'You will have to start this all over again'."

Pupuali'i, who speaks Samoan and Tokelauan, says she and her four Pacific colleagues at PGF have built up relationships of personal trust with their 800 Pacific clients.

"They don't have any money to travel to us. We go out to them. We sit in their comfort zone and agree to self-exclude from the pokie machines," she says.

She builds their trust until they let her take their photo and then take them around to the venues they want to be excluded from, leaving their photo at each place.

"Where is the trust from now?" she asks. "It's the trust of my clients to whatever agency will be taking over the contract. Is that trust still there?"