Draft gambling venue policy
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Statement of proposal report
This report should be read in conjunction with the Auckland City Council draft gambling venue
policy.
Background
The Gambling Act 2003
The Gambling Act (previously the "Responsible Gambling Bill") became law on the 18 September 2003. The
purpose of the Act is to:
(a) control the growth of gambling; and
(b) prevent and minimise the harm caused by gambling; and
(c) authorise some gambling and prohibit the rest; and
(d) facilitate responsible gambling; and
(e) ensure the integrity and fairness of games; and
(f) limit opportunities for crime and dishonesty associated with gambling; and
(g) ensure that money from gambling benefits the community; and
(h) facilitate community involvement in decisions about the provision of gambling.
The Act gives territorial authorities limited powers in relation to gambling in their district. The vast majority of
powers concerning gambling remain with the Department of Internal Affairs (DIA). Only the DIA have the power to revoke
class 4 operator licenses.
Class 4 (non-casino electronic gaming machine) gambling
Under the Act, territorial authorities are required to adopt a policy on class 4 venues for their district. Class 4
venues are defined in the Gambling Act to include any activity that involves the use of a gaming machine outside a casino.
Class 4 gaming may only be conducted by a corporate society and only to raise money for authorised (community) purposes.
Section 101(3) provides that a territorial authority's class 4 venue policy:
- must specify whether or not class 4 venues may be established in the territorial authority district and, if so, where
they may be located; and
- may specify any restrictions on the maximum number of gaming machines that may be operated at a class 4 venue.
Section 101(4) provides that, in determining its policy on whether class 4 venues may be established in its district,
and where any venue may be located, the territorial authority may have regard to any relevant matters including:
- the characteristics of the district and parts of the district;
- the location of kindergartens, early childhood centres, schools, places of worship, and other community facilities;
- the number of gaming machines that should be permitted to operate at any venue or class of venue;
- the cumulative effects of additional opportunities for gambling in the district;
- how close any venue should be permitted to be to any other venue;
- what the primary activity at any venue should be.
Electronic gaming machine operators (societies) must seek territorial authority consent through their class 4 venue
policy in order to:
- continue to operate machines at a class 4 venue licensed after 17 October 2001
- increase the number of electronic gambling machines at a class 4 venue
- establish new venues under the Act.
New Zealand Racing Board venues (stand alone TAB agencies)
The Gambling Act also amended the Racing Act 2003 to require that territorial authorities adopt a New Zealand Racing
Board venue policy for the district. The policy must specify whether new New Zealand Racing Board venues (stand alone TAB
agencies) may be established in the city and if so, where they may be located. The policy does not extend to other venues,
such as clubs and hotels, where TAB betting services are provided.
The draft Auckland City Council gambling venue policy covers both class 4 venues and New Zealand Racing Board venues.
Social impact assessment and consultation with key stakeholders
The Act requires territorial authorities to have regard to the social impact of gambling within their district when
developing their gambling venue policies. To this end, Auckland City Council joined with the six other territorial local
authorities in the Auckland region to commission a comprehensive impact assessment. Officers also met with Maori
representatives and representatives from the New Zealand Racing Board, and consultation was carried out with business
associations and mainstreets within Auckland City in 2002.
Some key findings of the social impact assessment and stakeholder consultation as they relate to Auckland City are
outlined in the following section.
Problem gambling in Auckland City
- The ratio of people seeking face to face counselling services for gambling in Auckland city is 1 in every 408
resident. This is the highest ratio in the Auckland region, where the average is 1 in 528.
- Auckland city residents made 1623 calls to the Gambling Helpline during the operating period from November 1998 to
November 2003. This equates to 1 in 227 Auckland city residents, which is very similar to the region-wide ratio of 1
in 225.
- During the operating period from November 1998 to November 2003, 901 Auckland city residents attended face to face
gambling counselling services. This equates to 1 in 408 Auckland city residents, which is the highest figure within
the Auckland region. (The region-wide ratio is 1 in 528).
- The majority of Auckland city resident callers to the Problem Gambling Helpline identified class 4 gambling as their
primary problem gambling mode with 58.3%. The second most prevalent mode was gambling on electronic gaming machines
within casinos with 24.2%.
Class 4 gambling in Auckland City
- Auckland city has the highest number of class 4 gambling opportunities in the Auckland region with 163 class 4 gambling
venues and a total of 1959 electronic gambling machines (excluding Sky City's 1647 electronic gambling machines).
- Auckland city has a ratio of one class 4 gambling machine per 188 people. This is higher than the Auckland regional
average of one class 4 gambling machine per 225 people.
- Within Auckland city, as across the region, class 4 venues predominate in areas of high or medium deprivation.
- Maori representatives and community representatives expressed concern with the growth of class 4 gambling in Auckland
city.
- Auckland city received a similar distribution of funds raised by the six main trusts when compared with distributions
at the national level. When compared with distributions on a regional level, Auckland city received the second least
amount of funds per head population with $12.511.
- Community organisations in Auckland city with a sport and physical activity focus benefited most from funding received
from the six main trusts, receiving over 50% of that distributed. Community organisations with an educational focus were
the second highest beneficiary receiving 20% of funds.
TAB gambling in Auckland City
- There are substantially less New Zealand Racing Board venues than class 4 venues within Auckland city, despite the
city having the highest number of board venues in the region with 21. Auckland city also has the highest number of
other TAB locations in the region (such as social outlets in clubs and hotels) with 20, however the combined total of
41 still only represents 25% of the number of class 4 venues within Auckland city.
- Over the last few years, the numbers of board venues within the Auckland region have either been static or
declining.
- Within Auckland city, as across the region, board venues predominate in areas of high or medium deprivation.
- Race and sports betting feature in problem gambling statistics with 6.1% of Auckland city resident callers to the
Gambling Problem Helpline identifying it as their primary mode of problem gambling.
- Evidence reviewed in the preparation of this report did not indicate the same level of concern from neighbouring
businesses in Auckland city regarding TAB venues as class 4 venues.
- Funds raised by the New Zealand Racing Board at TAB agencies are used to maintain and operate all of the racing
clubs and racecourses throughout the country. Within Auckland city this includes Avondale Racecourse, Ellerslie
Racecourse, and the Auckland Trotting Club at Alexandra Park.
- Racing clubs are regularly used by a variety of community groups not associated with racing. For example, the
Avondale Race Course facilities are used by and for the Auckland Rugby Union, Suburbs Rugby Club, local schools for
sport, Auckland Touch Rugby, club cricket, Crusaders Darts Club, housie and the Sunday markets.
Limitations of information available
There are substantial limitations concerning the information currently available on the impacts of gambling within
Auckland City. This particularly relates to the economic impact of class 4 gambling.
- Lack of publicly available information on the distribution of grant money by those clubs and trusts not incorporated
in the six large national trusts (up to 50% of the overall total of funds raised by class 4 gambling).
- Lack of reliable data on the amount of money spent by gamblers in Auckland City and the Auckland region.
- Lack of available measures on the flow of money into or out of Auckland City due to gambling.
Regulations and practices are currently being developed by DIA which will assist in the provision of information
concerning class 4 gambling in the future. However the current lack of data makes it difficult to draw a conclusive
picture of the economic costs and benefits associated with gambling.
New Zealand Racing Board venues and electronic gaming machines
The New Zealand Racing Board is eligible to apply to the DIA to operate electronic gaming machines at a board venue, if
the relevant territorial authority consents. There is currently only one board venue within Auckland city (located in Glen
Innes) that has electronic gaming machines.
Sky City Casino and electronic gaming machines
Sky City Casino has 1647 electronic gambling machines. The regulation of casinos, including electronic gambling machines,
are outside of the scope of powers accorded to territorial authorities under the Gambling Act.
Draft gambling venue policy
The objectives of Auckland City Council's draft gambling venue policy are:
- To control the growth of gambling in Auckland city.
- To minimise the harm caused by gambling in Auckland city, including problem gambling.
- To allow those who are legally entitled to participate in class 4 and TAB gambling in Auckland city to do so if they
wish and to do so safely.
- To seek to ensure that funds raised by gambling are distributed fairly for the benefit of communities within Auckland
city.
Provisions relating to class 4 venues
a) Number and location of venues
The draft gambling venue policy stipulates that a new class 4 venue can only establish when an existing venue
disestablishes. This prevents an increase in the number of venues by disallowing the total number of venues at anyone time
to exceed those currently existing (which according to DIA statistics total 163).
New class 4 venues and those licensed after 17 October 2001 are required to comply with the following location criteria.
- The venue in which the class 4 gambling is established, or proposed to be established, will be located in the central
area as defined in the Auckland City District Plan (Central Area) - Proposed 1997, and
- The venue in which the class 4 gambling is established, or proposed to be established, is
- Not within 250 metres of a primary, intermediate or secondary school; and
- Not on Council owned land or premises, and
- Not in the following precincts as defined in the Auckland City District Plan (Central Area) - Proposed 1997
- Residential Precinct
- Tertiary Education Precinct
- Viaduct Harbour Precinct
- Britomart Precinct
- Western Reclamation Precinct
- Public Open Space Precinct
- Transport Corridor Precinct
- Aotea Precinct.
The reasons for limiting the establishment of new venues and those licensed after 17 October 2001 to certain parts of
the central city is that it responds to community concerns regarding the existance of class 4 gambling venues in
residential areas and close to sensitive sites.
Heart of the City (the mainstreet association for the central business district) was consulted in 2002 concerning the
development of a gambling venue policy for Auckland City, and indicated that they would like to review the draft policy
once it is developed.
b) Number of class 4 machines
The draft gambling venue policy also prevents an increase in the number of class 4 machines by disallowing the total
number of machines to exceed those currently existing. The number of electronic gaming machines in each existing class 4
venue remains static, and the number of machines in a new venue must not exceed the number of machines held by the most
recently disestablished venue or nine, whichever number is the lowest.
c) Signage restrictions and harm minimisation
There was strong support from stakeholders (industry and community) for policies on host responsibility and harm
minimisation to be included as a requirement in the gambling venue policy. One means of harm minimisation however is
signage restrictions. The signage provisions in the draft policy prevent sandwich board advertising and prize money
advertising of any description if able to be seen from the exterior of the premises. Limits are also placed on the size
and illumination of signs and visibility of gaming machines from the road.
d) Liquor license requirements
The draft gambling venue policy requires class 4 venues (with the exception of New Zealand Racing Board venues with
class 4 machines) to be a premise licensed under the Sale of Liquor Act 1989 with a restricted designation or a tavern or
club license. The reason for requiring these types of licenses is to exclude class 4 gaming machines from licensed family
restaurants. Stakeholder consultation indicated support for the relationship between liquor licensing and class 4 venues
that occurred before the Act came into force to continue.
Maintaining the link between such licensed establishments and class 4 gambling has advantages in terms of hours of
operation and preventing underage gambling.
e) Funding distribution
The impact assessment identified a lack of publicly available information on how funds raised by class 4 gambling are
distributed. This is problematic both in terms of ensuring that council can obtain an accurate picture of the costs and
benefits of class 4 gambling, and in ensuring that money spent on class 4 gambling within Auckland city is distributed
back to communities of Auckland city. Maori representatives also voiced concern at the apparent lack of transparency, and
felt that Maori should be involved in decision making concerning the distribution of class 4 funds.
The draft gambling venue policy therefore requires applicants to provide council at least annually with a full report
on how electronic gambling machine revenue raised at the venue have been distributed.
Provisions relating to New Zealand Racing Board venues
a) New Zealand Racing Board venues with electronic gaming machines
The draft gambling venue policy stipulates that New Zealand Racing Board venues with electronic gaming machines (of
which there is currently only one in Auckland City), will be treated as all other class 4 venues with the exception of
being exempt from liquor licensing requirements.
b) New Zealand Racing Board venues without electronic gaming machines
The draft gambling venue policy takes a much less restrictive approach to New Zealand Racing Board venues without
electronic gaming machines. The draft policy allows that board venues can effectively freely establish within Auckland
City, provided that they comply with relevant district plan rules, bylaws (including the signs bylaw) and fee and
application requirements.
The reasons for treating board venues without electronic gaming machines more liberally than class 4 venues are as
follows:
- There appears to be a much stronger relationship between class 4 gambling and problem gambling, than TAB gambling
and problem gambling.
- National figures indicate class 4 gambling accounts for much more gambling expenditure (loss) than TAB gambling.
- Board venues are much less prevalent than class 4 venues.
- It appears unlikely that the number of Board venues will rise because regionally the number of venues have remained
static or declined over the last few years.
- There does not appear to be the same level of community concern regarding the provision of Board venues as class
4 venues.
Other relevant issues
Clubs and ministerial discretion
Under section 95 of the Act, if two or more clubs can demonstrate that they intend to merge into one club operating at
a class 4 venue that had a license on 17 October 2001, they may jointly apply to the Minister of Internal Affairs for
approval to operate more than the statutory maximum number of gaming machines. Similarly, section 96 provides that a club
currently operating nine machines at their venue, could apply to the Minister for approval to operate up to 18.
With respect to both section 95 and 96, clubs must obtain territorial authority consent before applying for Ministerial
discretion. The draft gambling venue policy does not have a provision that gives such consent, as it appears unclear that
class 4 gambling at a club venue contributes less to problem gambling than class 4 gambling at any other venue. In
addition, it is not clear that the community are any less concerned with gambling at club venues than other class 4
venues.
Analysis of other options
In accordance with section 77 requirements of the Local Government Act 2002, all reasonably practicable options have
been identified for the gambling venue policy and assessed.
In relation to class 4 gambling venues, other policy options considered include
- Capping the number of venues and allowing a maximum of nine machines per venue
- Capping the number of venues and allowing a maximum of less than nine machines per venue
- Restricting the location of venues in relation to sensitive sites
- Freely allowing the establishment of class 4 venues.
In relation to New Zealand Racing Board venues, other policy options considered include
- Prohibiting the establishment of new venues
- Restricting the location of venues in relation to sensitive sites.
1. It must be emphasised that these particular findings must be treated with
caution as the six main trusts account for less than half the machines in
Auckland City, and not all funds raised by those trusts were able to be
allocated within territorial authority boundaries.
Published May 2004
