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Home / Rotorua Daily Post

Pokie revenue seesaws: Dramatic plummet and record high through Covid-19

Luke Kirkness
By Luke Kirkness
Sport Planning Editor·Rotorua Daily Post·
4 Apr, 2021 09:00 PM4 mins to read

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The preliminary results of Retina Rimal's study show links between problem gambling and mental health issues. / Video by Dean Purcell

Rotorua pokie machine profits plummeted when New Zealand was placed into lockdown but the cash came roaring back at the end of the year.

A problem gambling expert said the increase was "staggering" and the problem was very real in the Bay of Plenty.

In the final quarter of last year, a whopping $252 million was spent on pokie machines throughout the nation, the highest since records began in 2007.

The previous high was Q3 in 2019 when they generated $244.7m when machines in Rotorua alone generated $6.7m.

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However, in the following three-quarters, revenue dropped by 56 per cent to $2.9m. In Kawerau, revenue fell from $711,886 to $332,738 over the same timeframe.

The decreases mirrored the nationwide trend which fell about 53 per cent between Q3 2019 to Q2 2020, but the decline was short-lived.

There was a dramatic dip in pokie machine revenue over lockdown but revenue came roaring back. Photo / Christine Cornege
There was a dramatic dip in pokie machine revenue over lockdown but revenue came roaring back. Photo / Christine Cornege

The Covid-19 lockdown was helpful for many with harmful gambling addictions, Problem Gambling Foundation spokeswoman Andree Froude said.

"They couldn't gamble, they didn't gamble online, they managed to save some money and spend time with family, for a lot of them it was really positive," she said.

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However, Froude said machine use came back with a hiss and a roar to end the year and problem gambling was a major problem in the region.

"The Bay of Plenty figures are quite staggering," she said.

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"In the year ending December 2018 to the year ending December 2019, spending increased by $5 million across the Bay of Plenty, a 6.5 per cent increase.

"The amount of money being lost in the Bay of Plenty in 2019 was $86 million … We've got areas that are losing significant amounts of money."

Across the Rotorua district alone last year, $21,361,544 of profits were raked in on gambling machines from 101 venues. An average of about $211,500 in profits for each location. The profit was $1.55m higher than in 2015.

Pokie machines outside of casinos fall under Class 4 gambling, which is regulated by the Department of Internal Affairs.

The number of machines a venue can have varies; those with a licence granted before October 2001 are allowed up to 18, and nine machines from then afterwards.

Corporate societies, also called non-club societies, own machines and distribute them to venues to operate, a ministry spokesperson said.

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Societies must distribute at least 40 per cent of all gambling profits (GMP) back to the community.

However, venues receive a commission of up to 1.28 per cent of their weekly turnover, capped at 16 per cent of their net annual machine profits.

With venues closed for alert level 4, there was a slump in pokie use over lockdown. Photo / Andrew Warner
With venues closed for alert level 4, there was a slump in pokie use over lockdown. Photo / Andrew Warner

Froude said one of the foundation's biggest concerns was having pokie machines in areas where communities were already struggling financially.

"If you look at Rotorua on its own, as at December 2020, they have 25 venues and of those, there are 19 in very-high deprivation areas and four in medium-high," she said.

"Twenty-three of the 25 are in very-high or medium-high deprivation areas. A lot of money is being lost by people who really cannot afford to be losing it."

Rotorua Budget Advisory Service manager Pakanui Tuhura. Photo / Andrew Warner
Rotorua Budget Advisory Service manager Pakanui Tuhura. Photo / Andrew Warner

Rotorua Budget Advisory Service also suffered a decline last year but it was thought stable incomes and only being able to spend on needs instead of wants was responsible, manager Pakanui Tuhura said.

"From October 2020 onwards we have seen a steady increase in people accessing our services which has continued into 2021," he said.

Tuhura urged anyone with a gambling addiction or anyone with a loved one or friend with an addiction to seek help from anti-gambling professionals.

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