Submissions on The Gambling (Gambling Harm Reduction) Amendment Bill 2012

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1 Arthritis New Zealand, National Office Tel , Fax: PO Box 10020, Level 2, 166 Featherston St, Wellington New Zealand, Website: 1 June 2012 The Secretariat Commerce Select Committee Select Committee Office Parliament Buildings WELLINGTON This submission is from: Arthritis New Zealand PO Box Wellington 6143 We DO wish to speak to our submission. My contact phone number is: Submissions on The Gambling (Gambling Harm Reduction) Amendment Bill 2012 Overview Arthritis New Zealand benefits from charitable gaming machine funding, and we oppose the intent of this Bill unless a separate fund for supporting charitable causes is created. The funds that are distributed from gaming trusts are essential for the ongoing operations of Arthritis New Zealand, and many other community agencies. There is a well documented squeeze on funding for community services. Arthritis New Zealand s ongoing service provision relies on the funding that comes from gaming trusts. We do not support any change that would further reduce the amount of charitable gaming machine funding available. We do not support the move to local authorities managing the licensing and funding of gaming machines as we believe this is not a cost or resource efficient way of managing the system. It will also in our view politicise the decision making. There is a significant history of gambling as part of the New Zealand way of life. Gaming is a legal activity and it appears that gaming machines in pubs and clubs are being singled out for tighter controls and/or eradication. We agree that the current laws are not well enforced but believe that some tightening of the regulations combined with effective and proactive enforcement of the current laws would meet the needs of a transparent funding system.

2 2 Commentary 1. We welcome the opportunity to make a submission on the Gambling (Gambling Harm Reduction) Amendment Bill We have chosen to make comment on this Bill because we are a national charity that is reliant on fundraising to cover 85% of our costs. Grants from community trusts including gaming trusts contribute a significant proportion of the annual income we need to sustain our services. 2. We note that according to the 2007 report from the Auditor General 1 around $300 million of funding was provided to community groups in 2004/05. We also note there has been a 20% decline in the number of gaming machines since that time 2 with a resulting decrease in the amounts available for distribution to the community. This funding is used to support a large number of community groups. 3. In its report on Giving in New Zealand BERL notes that 36% of income for philanthropic causes comes from trusts and foundations. 3 This includes the Lotteries Grants Board. Removing the estimated 12% that comes directly from gaming trusts will have an immediate impact on community groups. 4. Arthritis New Zealand received $1,061,537 in grants in the 2010/11 year from a number of trusts that included gaming trusts that enabled us to continue our operations in a tight economic climate. The actual amount varies from year to year but without this funding Arthritis New Zealand would not be able to offer our services around the country. 5. In addition to the funds we receive from trusts, including gaming trusts, we received $287,000 from the Lottery Grants Board a different form of gambling. Our income from government non gambling sources includes $64,000 from the Community Organisation Grants (COGS) and $650,000 in contract income. Without the nearly $1.5million we received from the proceeds of gambling we could not offer services to people with arthritis. 6. There is no obvious alternative funding source to replace this income. We note that the Health Sponsorship Council (HSC) was originally established to replace tobacco sponsorships - the HSC took over all events and activities that had previously been sponsored by tobacco companies. Unless a similar process is put in place to replace the income currently derived from gaming trusts we cannot support the current Bill. 7. We note with concern that this Bill focuses only on gambling from machines in pubs and clubs. It does not seek to reduce gambling proceeds from other sources such as Lotto, casino gaming, sports betting, racing or on line gambling. Given that there is a mandated 37% return of the proceeds of gaming machines back to the community and some of the other forms give no proceeds back to the

3 3 community we submit that focusing on one form of gambling does not necessarily reduce gambling harm. 8. While we acknowledge and accept that the current plethora of gaming trusts is not particularly efficient we do not believe that handing these functions to local authorities will improve the efficiency. We think that the current merger of a number of gaming trusts indicate that a process of natural attrition will result in a smaller number of trusts. 9. There is a need for much tighter monitoring of the existing legislation. We note with concern that funding of the Otago Rugby Football Union by The Trusts Charitable Foundation had been happening for more than seven years 4. While the Department of Internal Affairs noted this had been under review for many years. There needs to be sufficient resources available within the Department of Internal Affairs to undertake sufficient monitoring of the funds to give the public confidence that the funds are being distributed and accounted for appropriately. 10. New Zealand has a large number of charities 25,266 registered by the Charities Commission 5. In 2002 Arthritis New Zealand disestablished its 23 separately incorporated divisions and became one national organisation. The one organisation provides services through every TLA district from the Far North to Southland. This compares to other organisations such as Alzheimer s where the Charities Register lists 25 separate organisations, 55 Diabetes charities and 74 Cancer Charities of which 18 are individually registered Cancer Societies. We believe that becoming one national organisation is more cost effective and has reduced the level of overheads required so that more of our funding can be directed to information awareness and support for people with arthritis. We are concerned that the clauses in this Bill that relate to distribution at TLA and local board committees will disadvantage us as a national organisation. We applaud the trusts such as Pub Charity Inc which sets a percentage of its funds for national grants alongside a, much larger, percentage used to support local activities. We would recommend that all gaming trusts are encouraged, or even regulated, to make public their policies regarding disbursement of funds and that this disbursement should be spread across sport, education, health and social service activities. Specific Comments 11. Clause 5 In principle we agree with the sentiments expressed in Clause 5 that proceeds from gaming machines should not be used for the payment of racing stakes. We have questions about how far this Bill, should it be passed into law, will impact on the machines that are inside TABs or whether this only relates to those machines in clubs and licensed premises. 12. Clause 6 We believe that gaming money should be returned to the community. As a national organisation we have concerns that we would be disadvantaged by this clause in its current format. In 2002 Arthritis New Zealand merged 23 separate incorporated societies to become one organisation with a streamlined

4 4 and cost effective structure. We strongly believe that at face value a clause that requires funds derived from pokie machine gambling to be distributed at the level of Territorial Local Authority (TLA) or ward level will make applications from national organisations difficult despite the fact that we will provide services to people from every TLA 13. Clause 9 We approve in principle with the returns to community from the funds derived from gaming machines being as high as possible. We cannot comment on whether an 80% return is realistic. We believe an appropriate disbursement could be achieved by regulations within the current laws and does not require new legislation to achieve this. We would reiterate the point above within this disbursement we would encourage trusts to develop, and be audited against, distribution criteria that included set percentages for national organisations, and percentages for sport, education, health and social service activities. 14. Clause 10 As noted above we do not support the new sections 110A and 110B disestablishing the current gaming trusts and replacing these with disbursement by TLAs. We believe this is inconsistent with the current move towards refining TLA jurisdictions to refocus on infrastructure. We are also concerned that there would be a risk of politicising the process. In addition we have experience of the time consuming processes currently involved in TLA applications. Processes that in our view add nothing to the decision making or accountability of the funds received. 15. We also believe that many of the current gaming trusts do have more than adequate processes which are easy to access; quick to respond and provide clear and transparent guidance to applicants and communicate decisions promptly. We would encourage this standard to be adopted by all trusts. This could be achieved by regulation and monitoring. Arthritis New Zealand Arthritis New Zealand is the trading name for the Arthritis Foundation of New Zealand, a registered New Zealand charity. Arthritis New Zealand is an incorporated society, with over 5,000 members that has been the national organisation representing the interests of the 530,000 New Zealanders with arthritis for nearly 50 years. Our Mission is to improve the health and well being of people affected by arthritis. We focus on the following four priorities Awareness Advocacy Research Support through advice and information

5 5 Arthritis is the leading cause of disability in adult New Zealanders. It affects people of all ages including children. With 40 paid staff and hundreds of volunteers Arthritis New Zealand provided services to over 60,000 people affected by arthritis in the 2010/11 year and this year has run two awareness campaigns in addition to the ongoing service provision. One of these awareness campaigns was made possible through a grant from Pub Charity Inc. Our National Office is based in Featherston St, Wellington with regional offices in Auckland and Christchurch, and some staff based in Whangarei, Rotorua, Whanganui, Timaru and Dunedin. From these centres we provide services throughout New Zealand. 1 Office of Auditor General (2007) Effective of controls on non casino gaming machines Retrieved from 2 Gaming Machine Numbers June 1994-March 2012 retrieved from pdf 3 BERL Economics Giving New Zealand Charities Commission register as of 30/05/2012 retrieved from