Gaming reforms will mean more money for community groups

Internal Affairs Minister Peter Dunne says changes to the gambling sector will see more money returned to communities, the tightening up of potential dishonest gaming activities and a reduction of red-tape.

“Large sums of money are at stake in the Class 4 sector and it is important to ensure, as far as possible, that the maximum amount of gaming machine funds is returned to the community,” says Mr Dunne.

The changes are contained in a new Gambling Amendment Bill (the No 3 Bill) and additions to the Gambling Amendment Bill (No 2) which Cabinet signed off last week. The changes also include new regulations approved by Cabinet last month enabled in part by the Gambling (Gambling Harm Reduction) Amendment Act 2013.

“The No 3 Bill will give communities better information on grant-making decisions; strengthen provisions that deal with conflicts of interest and reduce the regulatory complexity and cost for gambling operators.

“These provisions help to ensure that gambling is undertaken to benefit the community and ensure every cent possible goes to worthy causes,” says Mr Dunne.

The Supplementary Order Paper to the Gambling Amendment Bill (No 2) provides clarification in key areas including the regulation and enforcement powers of the Department of Internal Affairs. The new regulations mean non-club gaming machine societies, which operate pokie machines in pubs and bars, will be required to distribute more of their gambling proceeds to the community.

The change will see the distribution of funds to the community by way of grants rise over a five year period, from the current minimum rate of return of 37.12 per cent of (GST-exclusive) gaming machine gross proceeds up to a minimum of 42 per cent.

“Current annual returns to the community are approximately $260 million. This figure could increase by a further $10 million because of the increase in the rate of return,” says Mr Dunne.

“The staggered increase will commence in the first financial year after the regulations come into force – 40 per cent in the first year, 41 per cent in the third financial year and 42 per cent in year five. It is anticipated that the new regulations will come into force around September 2014.”

There are currently 44 non-club societies and the average rate of return is close to 41 per cent so about half will have to make some adjustment to meet the new minimum. By staggering the increase, societies will have more time to adapt to the new requirements. Societies will also have to distribute 80 per cent of gaming machine net proceeds in the same regional council area in which the proceeds were generated.

Cabinet also gave the go-ahead to develop proposals to increase the transparency of grant decision-making and reform the system for paying the venues that host gaming machines. These changes are included in the No 3 Bill.

“Under the new transparency requirements societies will have to publish additional information that may include the purpose of a grant, the geographic location of grant recipients and whether a grant applicant is a local, regional or national organisation.

“On venue payments, I propose proceeding with the development of a commission-based system because it will be simpler than the status quo and has the potential to reduce societies’ overall costs. The Department will work with representatives of the Class 4 gambling sector to come up with the best solution,” says Mr Dunne.

The Gambling Amendment Bill (No 2) is before the committee of the whole House. The Gambling Amendment Bill (No 3) was introduced today.