Gaming Machine Gambling Statistics and Research Paper Information for Territorial Authorities

Transcription

1 Gaming Machine Gambling Statistics and Research Paper Information for Territorial Authorities Paper prepared by Jarrod True and Martin Cheer October 2015

2 Gaming Machine Statistics and Research Paper Information for Territorial Authorities Introduction 1. This paper has been prepared by Jarrod True and Martin Cheer. Jarrod is a barrister and solicitor with 19 years experience. Jarrod is also the author of the New Zealand Gambling Law Guide ( a publication on the law and policy surrounding class 4 gambling. Martin is the chief executive officer of Pub Charity. 2. The aim of this paper is to assist territorial authorities with their decision making process by setting out some of the key statistics regarding class 4 gambling and problem gambling. Executive Summary Grant Funding 3. The Gambling Act 2003 seeks to balance the potential harm from gambling against the benefits of using gaming machines as a mechanism for community fundraising. In the 2013 year, money returned to authorised purposes through grants totalled approximately $246 million. 1 This funding is crucial for a very large number of community groups. What is the Problem Gambling Rate? 4. New Zealand has a very low problem gambling rate by international standards. The 2012 New Zealand Health Survey 2 found the problem gambling rate was 0.3% of people aged 15 years and over (Problem Gambling Severity Index screen). A second 2012 National Gambling Survey 3 undertaken slightly later found that the problem gambling rate was 0.7% of people aged 18 years and over (Problem Gambling Severity Index screen). Both problem gambling rates related to all forms of gambling, not just gaming machine gambling. 5. In 2013/2014, 53.62% of all people who presented to the problem gambling services cited non-casino gaming machines as their primary gambling mode. 4 The problem gambling rate for non-casino gaming machines is therefore approximately 0.04% of persons aged 18 years and over. Does More Machines Mean More Problem Gambling? 6. The reasons for an increase or decrease in problem gambling is complex and multifaceted, not simply the direct by-product of an increase or decrease in machine numbers. 7. The New Zealand problem gambling prevalence rate over time bears no correlation to the number of gaming machines operating in New Zealand. 1 FAQs-February-2015-V2.docx

3 8. Between 1991 and 1999 the problem gambling rate declined considerably despite gaming machine numbers doubling and gaming machine expenditure trebling. Between 2006 and 2010 the problem rate increased, despite the number of gaming machines in New Zealand falling considerably in the same period. Between 2010 and 2012 the problem gambling rate stayed the same, despite a continual decline in gaming machine numbers. Does One New Machine Mean One New Problem Gambler? 9. The Abbott, Storer & Stubbs (2009) 5 paper found that there is on average 0.8 problem gamblers for each gaming machine. 10. The 2009 paper was not a new survey, but a study of the data from previous New Zealand and Australian surveys. When the New Zealand data is viewed in isolation and compared with the number of gaming machines in New Zealand, the relationship between harm and machine numbers appears to be inverse. 11. The only time that one new gaming machine would equate to one new problem gambler, is when a gaming machine is introduced into an area that did not previously have any machines. There are few districts (if any) in New Zealand where no gaming machines currently exist. 12. On 18 April 2012 Professor Max Abbott was interviewed by Radio New Zealand. Professor Abbott said that he could not make a firm prediction about the increase in harm from new machines. Professor Abbott stated: the issue of increasing or decreasing machines is actually more complicated than people might think because you do get adaptation over time, you can get a saturation effect, and also we have so many machines in this country that you would probably have to reduce them by quite a large number before you had an impact Can we say and I m not sure which of you wishes to answer this one, can we say categorically that an increase in the number of machines say by 350 which seems to be the common figure people are using, is going to significantly increase harm, what some of your research seems to be saying, if its 1 person per machine that you re going to get the ratio with, is that 350 more problem gamblers again, is it that simplistic? Well its difficult, I couldn t make a firm prediction to be honest, that s from studies carried out over a 20 year period, yes that was the average effect over that time period and the relationship is a stronger one when these machines were first being introduced and people hadn t been exposed to them before. 5 John Storer, Max Abbott & Judith Stubbs (2009): Access or adaptation? A metaanalysis of surveys of problem gambling prevalence in Australia and New Zealand with respect to concentration of electronic gaming machines, International Gambling Studies, 9:3, /

4 Is 40% of the Revenue Generated From Problem Gamblers? 13. The 2010 Australian Government Productivity Commission Report 6 estimated that problem gamblers share of the total spending on gaming machines was approximately 40%. 14. In the 2011 research paper Gambling away perspective? A review of the evidence justifying electronic gaming regulations 7 the authors were critical of the above report and suggested that the spending by problem gamblers was in fact between 10% and 20%. Do Gaming Trusts Target Maori and Pacific Island People? 15. Prior to the 2003 Gambling Act, there was no express age restriction on class 4 gambling. This was addressed by requiring all class 4 venues to be in licensed premises where there was a restricted or designated liquor licence. Gaming machines were therefore installed in pubs and taverns. Wherever there is a high number of pubs and taverns there will typically be a high number of gaming machines. 16. Currently the places with the highest number of machines per head of population are Kaikoura, Thames Coromandel, McKenzie District, Waitomo, Grey District, South Wairarapa and Buller. 17. Porirua, Manukau and Waitakere are areas that have some of the lowest density of gaming machines. There were 73 territorial authorities prior to the Super City being formed. Porirua, Manukau and Waitakere rank 60 th, 71st and 73 rd based on gaming machine density. Is Problem Gambling a Major Concern in New Zealand? 18. New Zealand has a very low problem gambling rate. Comparing National Problem Gambling Prevalence Rates Jurisdiction Year SOGS-PY = 5+ Norway % New Zealand % Sweden % Great Britain % Spain % United States % Australia % Sources: Abbott & Volberg, 2000; Becoña, 1996; Lund & Norlund, 2003; Orford et al, 2003; Productivity Commission, 1999; Volberg et al, 2001; Welte et al, Although problem gambling is a serious issue, the evidence suggests that once identified and help is sought problem gambling can be effectively and promptly treated perspective.pdf 4

5 Authorised Purpose Return Amount and Local Return Obligation 20. Gaming societies that mainly make external grants (traditional gaming societies, not clubs) are currently required to return a minimum of 40% of their gross proceeds to authorised purposes. This will increase to 41% in 2016 and 42% in The average rate of return distributed to the community in 2013 was 42.11% A minimum amount of local return will soon become a regulatory requirement (80% of the profits made in an area must be returned to the regional council area in which they were generated). Setting a Machine Number Limit 22. If a territorial authority elects to set a cap at the number of existing machines, the Department of Internal Affairs requires the cap to be set based on the number of machines that can operate as of right, not the number of machines that are currently in operation. 8 Guide: Pokies in New Zealand, a guide to how the system works. 5

6 Table of Contents General Class 4 Gambling Facts... 7 Gaming Machines Have Operated in New Zealand for a Considerable Period... 7 Gaming Machine Funding... 7 Positive Economic Impact From the Gaming Industry... 8 New Zealand Government Taxes... 8 Authorised Purpose Return Amount... 8 Return to Player... 9 Non-Casino Gaming Machine Numbers in New Zealand... 9 Gambling Expenditure... 9 Primary Gambling Mode of People Help Seeking Total Problem Gambling Clients Assisted More Seeking Help Does Not Necessarily Mean More Problem Gambling Comparing National Problem Gambling Prevalence Rates Addressing Problem Gambling Issues Problem Gambling Screens SOGS The Problem Gambling Severity Index (PGSI Screen) Comparing a SOGS-R Percentage with a CPGI/PGSI Percentage Problem Gambling Prevalence Rates Does More Machines Mean More Problem Gambling and 1999 Comparative Studies Shaffer, LeBrie and LePlante Shaffer South Australia Centre For Economic Studies Professor Max Abbott Professor Max Abbott Issues with the Storer, Abbott and Stubbs (2009) Paper Allen & Clark Venue Relocation Provisions Alcohol and Gambling Targeting Low Income Communities and Maori and Pacific Island People Internet Gambling and Mobile Phone Gambling Where Do Gaming Machine Profits Go? PGF 40% of EMG Spending is Attributable to Problem Gamblers PGF One Extra Machine Leads to Nearly One New Problem Gambler Problem Gambling Services Problem Gambling Treatment and Research Funding Problem Gambling Treatment Services are Extensive Existing Gaming Machine Safeguards Setting a Machine Number Limit

7 General Class 4 Gambling Facts Gaming Machines Have Operated in New Zealand for a Considerable Period 23. Gaming machines were first introduced into New Zealand in the early 1980s. Initially the machines were operated without a gaming licence. The first gaming licence was issued to Pub Charity on 25 March 1988, over 27 years ago. Gaming Machine Funding 24. The Gambling Act 2003 seeks to balance the potential harm from gambling against the benefits of using gaming machines as a mechanism for community fundraising. In the 2013 year, money returned to authorised purposes through grants totalled approximately $246 million. 9 This funding is crucial for a very large number of community groups. 25. In contrast to the amount of grants made by gaming machine trusts, NZ Lotteries transferred $202 million to the Lottery Grants Board for community services and projects, the New Zealand Racing Board allocated $142 million, mostly to support racing club activities and infrastructure, and Casinos paid just over $3 million to their community trusts. 26. In 2012, the Auckland City Council commissioned a community funding survey. The survey data is summarised in the report Community Funding: A Focus on Gaming Grants. 10 The report confirms how essential gaming machine funding is to a very large number of community organisations and how extremely difficult it would be for such funding to be obtained from alternative sources. The key findings of the survey are: Most respondents (75%) indicated that their organisation is moderately or totally reliant on gaming machine funding to fund core business activities. Most respondents (55%) believed that there would be a high to extreme risk to their organisation and their core business if they did not receive gaming funding. A further one-quarter (26%) said that there would be a moderate risk if they did not receive it. Two-thirds of respondents (68%) said that they thought that they would be unlikely to find another source of funding if gaming funding was not available. 27. The report concluded: Gaming Trust funding is a major source of community funding for organisations in the Auckland Region. Most respondents believe that the funding for their organisations is not particularly secure and are highly dependent on gaming funding, not just for discretionary or extra activities, but to fund their core business. There is a dependence on this funding with over half the respondents believing that their organisations would be at extreme risk if they did not receive it. Most felt that if the funding was not available, they would struggle to find an alternative source of funding. Some would cut down the activities they undertook, others say they would be forced to close down. 9 FAQs-February-2015-V2.docx

8 Positive Economic Impact From the Gaming Industry 28. In 2012, Auckland City Council commissioned an economic impact report on the impact of the class 4 gambling industry. The Economic Impact Report 11 confirmed that the non-casino gaming machine sector makes a positive economic contribution. The report at page 22 concluded: Overall, the non-casino gaming machine industry has a positive economic impact on the Auckland economy. New Zealand Government Taxes 29. Gaming societies pay 20% gaming duty on the GST inclusive gaming machine proceeds ( GMP ). 30. Gaming societies pay a problem gambling levy of 1.31% of the GST inclusive amount of GMP. GST is then paid on this sum, making the total GST inclusive percentage 1.51% % GST is paid on GMP. 32. For every $1.00 lost, 20 cents is paid in gaming duty, 1.5 cents is paid in problem gambling levy and cents is paid in GST, making the total direct government share cents. This does not include licence fees paid to the Department of Internal Affairs (estimated to be $8 to $10 million per annum). 33. In the 2014 calendar year, the non-casino gaming machine expenditure was $808,000, (GST inclusive). The Government s share was therefore $279,083, Typical Distribution of Gaming Machine Profits GST Inclusive GST Exclusive Government Duty 20% 23% GST 13.04% 0 Problem Gambling Levy 1.31% 1.5% DIA Costs 2.2% 2.5% Depreciation 9.27% 10.6% Repairs & Maintenance 2.6% 3.0% Venue Costs 12.8% 14.8% Society Costs 2.26% 2.6% Donations 36.52% 42% Authorised Purpose Return Amount 34. Gaming societies that mainly make external grants (traditional gaming societies, not clubs) are currently required to return a minimum of 40% of their gross proceeds to authorised purposes. This will increase to 41% in 2016 and 42% in The average rate of return distributed to the community in 2013 was 42.11% Guide: Pokies in New Zealand, a guide to how the system works. 8

9 35. Although societies that mainly apply funds (clubs) are not subject to the 40% minimum return regulation, it is common practice for such societies to be subject to a licence condition requiring a minimum of between 25% and 40% to be distributed or applied to authorised purposes. 36. In a press release dated 20 May 2014, Internal Affairs Minister Peter Dunne announced that 80% of gaming proceeds (80% of the 42%) would be required to be returned in grants to the same regional council area in which they were generated. Return to Player 37. The return to player on a non-casino gaming machine is required to be set between 78% and 92%. Non-Casino Gaming Machine Numbers in New Zealand 38. The number of gaming machines in New Zealand is published by the Department at three monthly intervals. A link to the information can be found at Statistics?OpenDocument. 39. The number of machines peaked in June 2003 (25,221). In March 2015 there were 16,614 machines. Source: DIA website Gaming-Statistics?OpenDocument Gambling Expenditure 40. Non-casino gaming machine revenue is trending down. 9

10 Non-Casino Gaming Machine Expenditure $m 2004 $m 2005 $m 2006 $m 2007 $m 2008 $m 2009 $m 2010 $m 2011 $m 2012 $m 2013 $m 2014 Source: DIA website Gaming-Statistics?OpenDocument 41. The total amount of expenditure on all forms of gambling is published by the Department and can be found at: Information-We-Provide-Gaming-Statistics?OpenDocument. 42. The information from 2004 to date shows a downward trend for expenditure on noncasino gaming machines and an upward trend on the amount spent on TAB offerings and Lotteries Commission offerings. The total amount gambled from 2004 to date has remained reasonably steady. 10

11 Expenditure $m Expenditure 2005 to Year Lotteries Commission Racing Board (TAB) Casinos Gaming Machines (outside Casinos) Total Expenditure The above figures do not include offshore based internet and mobile phone gambling. Current domestic research 13 has estimated 174,000 New Zealanders gambled online with an offshore operator (all forms of gambling), with per annum customer losses estimated at $110m. Primary Gambling Mode of People Seeking Help 44. There are more non-casino gaming machine venues in New Zealand than any other form of gambling venue. Non-casino gaming machine venues account for almost half (41%) of gambling venues in New Zealand. Approximately half (50.23%) of people who present to treatment providers cite non-casino gaming machines as their primary gambling mode. 45. For the 2014/2015 financial year 50.23% of new clients who sought help cited noncasino gaming machines as their primary gambling mode % cited casino gaming machines, making the gaming machine total 60.76%. 13 Nielsen 11

12 Primary Gambling Mode of New People Presenting for Problem Gambling Services / Intervention 2014 / 2015 New Zealand Racing Board 10.65% Housie 2.72% Other 6.09% Cards 1.77% Lotteries Commission Products 9.29% Non Casino Gaming Machines 50.23% Casino Table 8.68% Casino EGM, 10.53% Source: Ministry of Health Source: Ministry of Health Website Total Problem Gambling Clients Assisted 46. The total number of people assisted for gambling problems (all forms of gambling) is published by the Ministry of Health and can be found at: Total Clients Assisted, For 2007/08 To 2014/15 Financial Years Total Clients Recorded (Ex Brief Interventions) Contact July 2007 to June 2008 July 2008 to June 2009 July 2009 to June 2010 July 2010 to June 2011 July 2011 to June 2012 July 2012 to June 2013 July 2013 to June 2014 July 2014 to June 2015 Total Clients New Clients Existing Clients* Increase from previous year Percentage increase from previous year % 35.4% 5.9% -3.7% 1.4% 11.5% 3.9% 0.2% * Existing Clients Clients who have accessed a service in a previous year 12

13 47. Records are kept of the number of people who seek help for problem gambling in each territorial authority. 14 The table below shows the number of persons who sought help in each territorial authority in the period July 2014 to June Table 10: Clients Assisted, by Territorial Authority (Ex Brief Intervention Type) Territorial Authority July 2014 to June 2015 New clients Assisted 1 All clients assisted 2 Ashburton District Council Auckland City Council (Super City) Banks Peninsula District Council 0 1 Buller District Council 2 2 Carterton District Council 2 2 Central Hawkes Bay District Council 5 7 Central Otago District Council 5 5 Chatham Islands Council 0 0 Christchurch City Council Clutha District Council Dunedin City Council Far North District Council Franklin District Council 3 4 Gisborne District Council Gore District Council 1 1 Grey District Council 7 11 Hamilton City Council Hastings District Council Hauraki District Council 6 6 Horowhenua District Council Hurunui District Council 1 3 Hutt City Council Invercargill City Council Kaikoura District Council 2 4 Kaipara District Council Kapiti Coast District Council Kawerau District Council MacKenzie District Council 1 1 Manawatu District Council Marlborough District Council Masterton District Council Matamata - Piako District Council 6 8 Napier City Council Nelson City Council New Plymouth District Council Opotiki District Council 2 5 Otorohanga District Council 0 1 Palmerston North District Council Porirua District Council Queenstown - Lakes District Council Rangitikei District Council 1 1 Rotorua District Council Ruapehu District Council 3 4 Selwyn District Council 4 12 South Taranaki District Council 8 9 South Waikato District Council

14 South Wairarapa District Council 3 3 Southland District Council 1 1 Stratford District Council 3 7 Tararua District Council 4 8 Tasman District Council Taupo District Council Tauranga District Council Thames - Coromandel District Council Timaru District Council Upper Hutt City Council Waikato District Council Waimakariri District Council Waimate District Council 0 1 Waipa District Council Wairoa District Council 5 7 Waitaki District Council 3 7 Waitomo District Council 2 4 Wanganui District Council Wellington City Council Western Bay of Plenty District Council Westland District Council 3 4 Whakatane District Council Whangarei District Council TLA not recorded 0 0 Total New Clients The number of clients that have contacted an intervention service for the first time in the period for psychosocial support either by phone or face-to-face in this Territorial Authority. 2 Total number clients assisted in this year in this Territorial Authority (includes new clients and clients who first contacted a service in a previous year) More Seeking Help Does Not Necessarily Mean More Problem Gambling 48. The fact that more people are seeking help does not necessarily mean that problem gambling is increasing. The increase in help seeking could be due to: a. A general change in society s attitude toward counselling services and seeking help. People are more aware now of the help services available and more inclined to seek help; b. The general economic decline. The sharp increase in help seeking in the period from 2008 to 2011 corresponds with the global financial crises. A reduction in disposable income tends to bring any gambling loss to the fore; and c. A corresponding increase in television, radio and newspaper advertising by the treatment providers. 49. In Professor Max Abbott s 2006 paper Do EGMs and Problem Gambling Go Together Like a Horse and Carriage?, 15 Professor Abbott stated: help seeking is only partly driven by the number of people with problems

15 50. The Gambling Commission in its 2009 Report on the Proposed Problem Gambling Levy: stated: In the Ministry s previous two Service Plans, presentations were seen to be a fair proxy for harm on the assumption that presentations are about helpseeking, and help-seeking is about harm. The 90% weighting previously given to presentations was indicative of the view that presentation data is a highly reliable indicative proxy for the causation of harm. The Commission did not share the Ministry s view. The Commission continues to have serious concerns about whether the number of persons presenting to problem gambling treatment providers is a fair or accurate proxy for harm. Based on the submissions made by problem gambling treatment provides and PwC s recommendations, the Commission recommends that consideration be given to using prevalence data from surveys rather than presentation data. The Commission recognises that prevalence studies have tended to produce a similar picture of the attributed modes of problem gambling so the outcomes may not diverge very substantially, but the use of that data is capable of providing a fairer indication of responsibility for harm and, in addition, removes any perverse incentives. 51. The total advertising spend (based on standard non-discounted rates) by the Gambling Problem Helpline, the Health Sponsorship Council and the Problem Gambling Foundation on the availability of problem gambling services is estimated to be $898,964 in 2009, $1,393,811 in 2010, and $893,776 in The graph below details the amount of people assisted from 2009 to 2011 and the corresponding advertising spend. There appears to be a correlation between the amount of advertising of problem gambling services and the number of people who seek help. Advertising Spend and Number of People Assisted 1.3m 898K 893K Advertising Spend People Assisted 16 PGLReport2009.pdf 15

16 Comparing National Problem Gambling Prevalence Rates 53. At the New Zealand Gaming Expo Conference in March 2006, Professor Max Abbott presented a comparison of New Zealand s problem gambling rates. The comparison showed the results of several countries when the same consistent screen had been used (the comprehensive SOGS screen). The following table was shown by Professor Abbott: Comparing National Problem Gambling Prevalence Rates Jurisdiction Year SOGS-PY = 5+ Norway % New Zealand % Sweden % Great Britain % Spain % United States % Australia % Sources: Abbott & Volberg, 2000; Becoña, 1996; Lund & Norlund, 2003; Orford et al, 2003; Productivity Commission, 1999; Volberg et al, 2001; Welte et al, 2001 Addressing Problem Gambling Issues 54. Although problem gambling is a serious issue, the evidence suggests that once identified and help is sought problem gambling can be effectively and promptly treated. 55. In Professor Max Abbott s 2006 paper Do EGMs and Problem Gambling Go Together Like a Horse and Carriage? 17 Professor Abbott noted: All [prospective studies] have confirmed the finding that problem gambling, for many, is a transitional rather than absorbing state. It appears likely that EGM-related problems are labile, typically both developing and resolving much more rapidly than those linked to track betting and perhaps some other forms such as card games. 56. In Professor Max Abbott s document Situational Factors that Affect Gambling Behaviour he noted: During the past few years prospective studies have been conducted (reviewed in Abbott & Clarke, in press; Slutske, this volume) that have found, contrary to DSM conceptualisation, that problem gambling is transitory, especially in its less severe forms. It appears that EGM-related problems, relative to problems associated with track betting and perhaps other continuous forms, are less persistent (Abbott, Williams & Volberg, 2004)

17 57. The 2011 KPMG report Value for Money review of problem gambling services 18 notes: The Auckland University of Technology Stage Three Evaluation of Problem Gambling Intervention Services (2010) found that the vast majority of clients surveyed reported positive treatment outcomes and high levels of satisfaction with the treatment experience. 58. The Ministry of Health document Problem Gambling Intervention Services in New Zealand 2007 Service-user statistics Public Health Intelligence Monitoring Report No noted that 38.5% of problem gamblers received 3 hours or less treatment via face to face counselling. The report on page 16 states: Hours of treatment received The majority of clients (86.4%) received 1.25 hours or more of treatment in 2007, with more than half of the clients in 2007 receiving between 1.25 and hours of treatment. Percent Face-to-face Clients 2007 Hours of Treatment Received Under 1 hour 1 hour hours hours hours 20 hours and over Total Duration 18 Value for Money review of problem gambling services

18 Problem Gambling Screens SOGS 59. The South Oaks Gambling Screen is a 20-item questionnaire based on DSM-III criteria for pathological gambling. The questions asked and the scoring method is as follows: South Oaks Gambling Screen (SOGS) Please check one answer for each statement a. Played cards for money. b. Bets on horses, dogs, or other animals (at OTB, the track, or with a bookie). c. Bet on sports (parlay cards, with bookie, at Jai Alai). d. Played dice games, including craps, over and under or other dice games. e. Went to casinos (legal or otherwise). f. Played the numbers or bet on lotteries. g. Played bingo. h. Played the stock and/or commodities market. i. Played slot machine, poker machines, or other gambling machines. j. Bowled, shot pool, played golf, or some other game of skill for money. k. Played pull tabs or paper games other than lotteries. l. Played internet gambling games for money. m. Some form of gambling not listed above (please specify). Not at all Less than once a week Once a week or more 2. What is the largest amount of money you have ever gambled with on any one-day? Never Gambled More than $ up to $1,000 $ 1.00 or less More than $1,000 up to $10,000 More than $1.00 up to $10.00 More than $10,000 More than $10.00 up to Check which of the following people in your life has (or had) a gambling problem. Father Mother Brother/Sister My spouse/partner My child(ren) Another relative A Friend or someone important in my life 18

19 4. When you gamble, how often do you go back another day to win back money you have lost? Never Most of the time Some of the time (less than half of time I lose) Every time that I lose 5. Have you ever claimed to be winning money gambling, but weren t really? In fact you lost? Never Yes, less than half the time I lost Yes, most of the time 6. Do you feel you have ever had a problem with betting or money gambling? No Yes, in the past, but not now. 7. Did you ever gamble more than you intended to? Yes No 8. Have people criticized your betting or told you that you had a problem, regardless of whether or not you thought it was true? Yes No 9. Have you ever felt guilty about the way you gamble, or what happens when you gamble? Yes No 10. Have you ever felt like you would like to stop betting money on gambling, but did not think that you could? Yes No 11. Have you ever hidden betting slips, lottery tickets, gambling money, IOUs, or other signs of betting or gambling from your spouse, children or other important people in your life? Yes No 12. Have you ever argued with people you live with over how you handle money? Yes No 13. (If you answered "yes": to question 12) Have money arguments ever centred on your gambling? Yes No 14. Have you ever borrowed from someone and not paid them back as a result of your gambling? Yes No 15. Have you ever lost time from work (or school) due to betting money or gambling? Yes No 19

20 16. If you borrowed money to gamble or to pay gambling debts, who or where did you borrow from (check "Yes" or "No" for each): a. From household money YES NO b. From your spouse/partner YES NO c. From relatives or in-laws YES NO d. From banks, loan companies, or credit unions YES NO e. From credit cards YES NO f. From loan sharks YES NO g. You cashed in stocks, bonds or other securities YES NO h. You sold personal or family property YES NO i. You borrowed on your checking accounts (passed bad checks) YES NO j. You have (had) a credit line with a bookie YES NO k. You have (had) a credit line with a casino YES NO The SOGS may be reproduced as long as the language is used as printed and the scored items are not revised without permission of the author. SOGS-Scoring Scores on the SOGS are determined by scoring one point for each question that shows the "at risk" response indicated and adding the total points. Question 1 Question 2 Question 3 Question 4 Question 5 the time Question 6 Question 7 Question 8 Question 9 Question 10 Question 11 Question 12 Question 13 Question 14 Question 15 Question 16a Question 16b Question 16c Question 16d Question 16e Question 16f Question 16g Question 16h Question 16i Question 16j Not counted Not counted Not counted Most of the time I lose, or Yes, every time I lose Yes, less than half the time I lose or Yes, most of Yes, in the past but not now or Yes Yes Yes Yes Yes Yes Not counted Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Not counted 20

21 Question 16k TOTAL: Not counted (maximum score = 20) Interpreting the score: 0: No problem with gambling 3-4: Problem Gambler 5 or more: Probable Pathological Gambler The Problem Gambling Severity Index (PGSI Screen) 60. The PGSI nine item problem gambling severity index is a subset of the 30 item Canadian Problem Gambling Index (CPGI). 61. The PGSI contains nine questions that are strong predictors of gambling harm (e.g., feeling guilty about gambling, having financial difficulties, betting more than one can afford). 62. Respondents are asked whether they have experienced these signs of harm caused by gambling and, if so, whether this happened sometimes, most of the time or almost always. They are allocated from one point for sometimes to three points for almost always, and can therefore be allocated up to 27 points. 63. Respondents are then classified into the following categories: non-gamblers (those who did not answer yes to any of the questions about participation in gambling in the last 12 months), non-problem gamblers (those who had gambled, but answered no to all the PGSI questions about experiencing harm), low-risk gamblers (who got 1 or 2 points according to the PGSI), moderate-risk gamblers (who got 3-7 points) and problem gamblers (who got 8 or more points). Area Loss of control Motivation Chasing Borrowing Problem recognition Criticism Feelings of guilt Negative effects on health Financial problems Question How often have you bet more than you could really afford to lose? Have you needed to gamble with larger amounts of money to get the same feeling of excitement? How often have you gone back another day to try to win back the money you lost? How often have you borrowed money or sold anything to get money to gamble? How often have you felt that you might have a problem with gambling? How often have people criticised your betting or told you that you had a gambling problem, regardless of whether or not you thought it was true? How often have you felt guilty about the way you gamble or what happens when you gamble? How often has gambling caused you any health problems, included stress or anxiety? How often has your gambling caused any financial problems for you or your household? 21

22 Scoring the nine-question CPGI/ PGSI Problem Description Gambling level Non-gambler Did not gamble in the last 12 months Recreational Not experiencing any negative gambler consequences of gambling. May gamble at low levels, or at social levels that are not problematic Low-risk Probably gambling at levels that gambler are not leading to negative Moderate-risk gambler Problem gambler consequences Gambling at levels that may or may not be leading to negative consequences Gambling at levels that are leading to negative consequences. They may have lost control of their gambling behaviour CPGI/ PGSI scores Did not answer CPGI/PGSI or more (to a maximum of 27) Comparing a SOGS-R Percentage with a CPGI/PGSI Percentage 64. In Professor Max Abbott s 2006 paper Do EGMs and Problem Gambling Go Together Like a Horse and Carriage? 20 Professor Abbott noted that the Canadian Problem Gambling Index ( CPGI ) and the subset screen PGSI estimates are typically about half SOGS-R probable current pathological gambling estimates. 65. In Storer, Abbott and Stubbs (2009) 21 a 0.4% PGSI score was transformed to a SOGS 5+ score of 0.95%. Problem Gambling Prevalence Rates 66. It is difficult to review the trend in problem gambling prevalence rates in New Zealand. The studies have used different screens and vary vastly in sample size. The different screens produce different percentages. The different screens also capture different levels of gambling issues in the overall percentage quoted. Survey Year Survey Name Screen Problem Gambling Rate 1986 General psychiatric epidemiological survey (Wells, Bushnell, Hornblow, Joyce & Oakley- Brown, 1989) DIS (American Psychiatric Association s Diagnostic Interview Schedule) 3.6% of adults had a problem with gambling at some time. 0.4% were pathological gamblers. Survey Size John Storer, Max Abbott & Judith Stubbs (2009): Access or adaptation? A metaanalysis of surveys of problem gambling prevalence in Australia and New Zealand with respect to concentration of electronic gaming machines, International Gambling Studies, 9:3,

23 National Prevalence Survey National Prevalence Survey / /03 New Zealand Health Survey / /07 New Zealand Health Survey 24 Commissioned by the Ministry of Health SOGS-R 3.3% current problem or pathological gamblers. 1.2% people were current pathological gamblers (SOGRS-R score of 5) 2.1% were current problem gamblers (SOGRS-R score of 3 or 4.) SOGS-R 1.3% current problem or pathological gamblers. Current problem meant a SOGRS-R score of 3 or % of people aged over 18 years had a SOGS-R score of 5 A unique % (1.0%- question selfdesigned 1.5%) of people aged 15 years screen and over. PGSI 0.4% people aged 15 years and over In Storer, Abbott and Stubbs (2009) the 0.4% PGSI was transformed to a SOGS 5+ score of 0.95%. 3,933 6,452 12,929 12,

24 2007 Assessment of the Social Impacts of Gambling in New Zealand: SHORE 25 Commissioned by the Ministry of Health and Massey University Health and Lifestyles Survey 26 No screen used 2.4% of the population may have had an inferior state of mental wellbeing as a result of gambling PGSI 0.70% 1,740 Commissioned by the Health Sponsorship Council 2011/2012 Problem Gambling in New Zealand 2012 (March to October) Preliminary findings from the New Zealand Health Survey (July 2011 to March 2012) National Gambling Survey 28 PGSI 0.30% of people aged 15 years and over. PGSI 0.70% of people aged 18 years and over 9,821 6,251 Does More Machines Mean More Problem Gambling? 67. The reasons for an increase or decrease in problem gambling is complex and multifaceted, not simply the direct by-product of an increase or decrease in machine numbers. 68. The New Zealand problem gambling prevalence rate over time bears no correlation to the number of gaming machine operating in New Zealand. 69. Between 1991 and 1999 the problem gambling rate declined considerably despite gaming machine numbers doubling and gaming machine expenditure trebling. Between 2006 and 2010 the problem rate increased, despite the number of gaming machines in New Zealand falling considerably in the same period. Between 2010 and 2012 the problem gambling rate stayed the same, despite a continual decline in gaming machine numbers Gray, R 2011 New Zealanders Participation in Gambling: Results from the 2010 Health and Lifestyles Survey Health Sponsorship Council Participation_final-web.pdf (page 14)

25 70. The graph below details the machine numbers over time and the only directly comparable published New Zealand surveys. When viewed as the whole, the survey results confirm that there is no direct correlation between gaming machine numbers and problem gambling rates. 1.50% 1.25% 1.00% 0.75% Gaming Machine Numbers Over Time and Comparable Problem Gambling Surveys 1.2% SOGS-R5+ 17,150 12,201 25,221 20,518 Machine numbers 0.7% PGSI 19,359 17,670 16, % PGSI 0.50% 0.25% 6,273 8, % SOGS-R5+ 0.4% PGSI 0.00% Machine Numbers SOGS-R5+ PGSI 71. The 2012 National Gambling Survey 29 concluded that the prevalence of problematic gambling reduced significantly during the 1990s and has since stayed about the same. The report stated on pages 17 and 18: Problem gambling and related harms probably reduced significantly during the 1990s but have since remained at about the same level despite reductions in non-casino EGM numbers and the expansion of regulatory, public health and treatment measures. Given that gambling availability expanded markedly since 1987 and official expenditure continued to increase until 2004, these findings are consistent with the adaptation hypothesis. This hypothesis proposes that while gambling problems increase when high risk forms of gambling are first introduced and made widely available, over time individual and environmental adaptations occur that lead to problem reduction. 72. Professor Max Abbott is New Zealand s leading expert on problem gambling. In 2006, Professor Abbott published a paper Do EGMs and Problem Gambling Go Together Like a Horse and Carriage? The paper noted that gaming machine reductions and the introduction of caps generally appear to have little impact on problem gambling rates. Professor Max Abbott noted: EGM reductions and the introduction of caps generally appears to have little impact (page 1)

26 Over time, years rather than decades, adaptation ( host immunity and protective environmental changes) typically occurs and problem levels reduce, even in the face of increasing exposure. (page 6). Contrary to expectation, as indicated previously, although EGM numbers and expenditure increased substantially in New Zealand from 1991 to 1999, the percentage of adults who gambled weekly dropped from 48% to 40%. This is of particular interest because it suggests that greater availability and expenditure do not necessarily increase high-risk exposure. (page 14) and 1999 Comparative Studies 73. The Public Health Intelligence section of the Ministry of Health has produced a document Problem Gambling Research Programme The document states on pages 13 and 14: New Zealand is fortunate in that it is the only jurisdiction in which a nationally representative survey has been replicated with the same measurement instrument. 31 The initial survey was conducted in and found that some 48% of respondents (18 years and over) reported gambling in at least one form, weekly or more often. The lifetime probable pathological gambling prevalence was estimated at 2.7%, with the current (previous six months) estimate 1.2%. This lifetime estimate was higher than comparable North American surveys. A second survey 33 was completed in It is worth noting that in the eight years between the initial survey and the 1999 survey, expenditure on gambling had doubled, electronic gambling machine expenditure had trebled, and casinos were introduced in Christchurch (1996) and Auckland (1998). Given these substantial increases in the accessibility and availability of gambling alternatives, the general expectation was that problem gambling would have increased substantially. However, the results did not support this prediction, and lifetime prevalence was estimated at 1%, with current prevalence of 0.5%. Most recently, the 2002/03 New Zealand Health Survey (NZHS) estimated that 69.4% of New Zealanders had participated in gambling activities in the past 12 months, and the estimate for current problem gambling levels (moderate to severe problems) was 1.2%. 34 There is growing evidence that the prevalence of problem gambling has levelled out in New Zealand. The methodologies used by Abbott and Volberg 35 and in the NZHS (notwithstanding the concerns over the one-off screen) were very sound. Internationally, the evidence remains somewhat confused. Abbott 36 subsequently reviewed a number of North American replication studies, and found that seven had higher prevalence estimates on replication, in keeping with the notion that increased availability and expenditure would result in increased prevalence. However, eight studies showed reductions in prevalence. Decreases have also been noted in Australia This instrument was the South Oaks gambling Screen (SOGS, SOGS-R) 32 Abbott & Volberg, Abbott & Volberg, It should be noted that a one-off screen was developed and used in this survey and its performance relative to validated screens has not been empirically established. Therefore, comparisons with prevalence estimates should be interpreted with a degree of caution , Productivity Commission,

27 Although a consensus has yet to be reached, when the existing evidence is considered, methodological and confounding factors notwithstanding, it does not support the simple notion that at a population level increased availability and expenditure necessarily results in increases in gambling problems. Rather, there is likely to be a more complex multi-faceted relationship, or series of relationships involved. Abbott et al 38 have discussed some of this evidence at a more detailed level and suggest that prevalence rates may tend to level out in mature markets, even as gambling accessibility continues to increase. However, this is not necessarily a naturally occurring phenomenon. In more mature markets such as New Zealand, factors such as a greater awareness of problem gambling, increased availability of problem gambling services, increased regulation, improved harm minimisation measures, increased host responsibility, changing participation patterns, and aging successive cohorts may all play some role in producing this phenomenon. Shaffer, LaBrie and LaPlante Shaffer, LaBrie and LaPlante (2004) stated at page 43: Shaffer 2005 To our knowledge, no scientific research has established a casual link between disordered gambling and either literal or figurative proximity to gambling. Similarly, no scientific research has established a direct link between community cues for gambling and increased urges to gamble although this is one of the objectives of advertising). 75. Shaffer (2005) stated at page 1228: Observations about gambling-related problems in Nevada provide support for the adaption hypothesis of addiction. That is, after the novelty of initial exposure, people gradually adapt to the risks and hazards associated with potential objections of addiction. South Australia Centre For Economic Studies The 2005 South Australia Centre for Economic Studies paper 39 stated: We find no evidence that the regional cap policy had any positive influence on problem gamblers attending counselling, on problem gambler counselling rates or other help seeking behaviour. Professor Max Abbott In 2006 Professor Max Abbott s paper Do EGMs and Problem Gambling Go Together Like a Horse and Carriage? 40 he stated: EGM reductions and the introduction of caps generally appear to have little impact The South Australia Centre for Economic Studies, May

28 Over time, years rather than decades, adaption ( host immunity and protective environmental changes) typically occurs and problem levels reduce, even in the face of increasing exposure. 78. In 2006 Professor Max Abbott s paper Situational Factors that Affect Gambling Behaviour Professor Abbott stated at pages 15 and 16: New Zealand is the only country where repeat national surveys have been conducted using comparable methods and measures. During the three years prior to the 1991 baseline survey (Abbott & Volberg, 1996; Volberg & Abbott, 1994) per capita expenditure more than doubled following introduction of a national lottery, other lottery products and non-casino EGMs. The initial survey found 48% of adults gambled weekly or more. The current probable pathological gambling prevalence estimate was 1.2%. A 1996 survey (North Health, 1996) obtained an estimate of 0.4%, despite increased availability and expenditure. A third survey was conducted in 1999 (Abbott & Volberg, 2000), a few years after casinos were opened in the two major metropolitan areas. Total gambling expenditure had doubled since The current prevalence rate remained low at 0.5%. Frequent participation was also lower than in 1991 (40%), a consequence of fewer people taking part this often in continuous forms. Professor Max Abbott In Storer, Abbott and Stubbs (2009) 41 the authors at page 241 stated: It is likely that both access and adaption forces are at work simultaneously, with varying implications for policy. First, there is strong support from the present findings for the access thesis, with strong statistically meaningful relationships between an increase in problem gambling prevalence and increasing per capita density of EGMs, at an average increase of 0.8 problem gamblers for each new EGM. Further, there is no evidence of plateauing of prevalence with increasing density of EGMs, one of the predictions of the adaption thesis. These findings indicate that policies related to restricting or reducing the density of EGMs are likely to play a significant role in containing or reducing gambling-related harms. The finding of a decrease in prevalence of problem gamblers, at a rate of 0.09% per annum with EGM density held constant, is partially consistent with the adaption thesis. It suggests that measures related to public education and other community and individually based preventative or treatment programs may be effective in reducing harm over time. From the perspective of public policy, and particularly harm minimisation, holding or reducing EGM numbers would appear prudent based on our findings, and is likely to lead to reduced harm both through reduced availability and by enabling adaption processes. Issues with the Storer, Abbott and Stubbs (2009) Paper 80. The Storer, Abbott and Stubbs (2009) paper 42 is not based on any new survey, but is simply a study of studies. The paper reviewed 34 previous Australian and New 41 John Storer, Max Abbott & Judith Stubbs (2009): Access or adaptation? A metaanalysis of surveys of problem gambling prevalence in Australia and New Zealand with respect to concentration of electronic gaming machines, International Gambling Studies, 9:3, John Storer, Max Abbott & Judith Stubbs (2009): Access or adaptation? A metaanalysis of surveys of problem gambling prevalence in Australia and New Zealand with respect to concentration of electronic gaming machines, International Gambling Studies, 9:3,

29 Zealand surveys conducted between 1991 and Only five of the studies were New Zealand studies. 81. The Australian data is not directly comparable to the New Zealand data due to the fact that Australian machines are operated commercially by the venue operators (i.e. operated for personal profit). 82. When the New Zealand data is looked at in isolation (figure 4 on page 230) as per the table below, and compared with the number of gaming machines in New Zealand, the relationship between harm and machine numbers appears to be inverse. 30,000 Gaming Machine Numbers 25,000 20,000 15,000 17,150 25,221 23,002 22,231 21,34320,51819,739 20,097 10,000 5, ,273 12,201 13,27313,812 8,160 9,286 11, Gaming Machine Numbers 83. Figure 10 in the paper (duplicated below) graphs the SOGS 5+ score and EGM density. This graph is said to show a relationship between increasing density of EMGs and higher SOGS 5+ prevalence rate. The relationship as evidenced from the 29

30 graph appears however to be far from conclusive. It is arguable that an opposite conclusion could have been drawn. Allen & Clark In July 2012 Allen and Clark did a report for the Ministry of Health titled Informing the 2012 Gambling Harm Needs Assessment. 43 The report concluded that a reduction in the opportunities to gamble had not resulted in any corresponding reduction in moderate to high risk problem gambling. The report at page 6 stated: There has been a significant decline in gambling participation rates and opportunities to gamble, but no change in the prevalence rate of gamblers at moderate to high risk of problem gambling. Venue Relocation Provisions 85. The Gambling (Gambling Harm Reduction) Amendment Act 2013 amended sections 101 and 102 of the Gambling Act The amendments require that the first time a territorial authority commences a review of its gambling venue policy after 14 September 2013, the territorial authority must consider whether to include a venue relocation policy: s 102(5A) Gambling Act A relocation policy is a policy that sets out if and when the territorial authority will grant consent for a venue to be established in its district, when the venue is intended to replace an existing venue within the district: s 101(5) Gambling Act In considering whether to include a relocation policy, the territorial authority is required to consider the social impact of gambling in high-deprivation communities within its district: s 102(5B) Gambling Act Allowing venues to relocate has a number of benefits. 89. Enabling relocation removes the entrenchment and gives venue owners the ability to move from undesirable areas such as residential areas to more desirable areas such as the CBD and commercial zones without losing their ability to host the same

31 number of gaming machines. Allowing relocation enables venues to move away from high deprivation areas. 90. Allowing relocation enables gaming venues to move to new, modern, refurbished premises. Allowing local businesses to upgrade their premises and provide a more modern, attractive offering to the public helps to revitalise the business districts, improves the local economy and encourages tourism. 91. The first venue to relocate under the amendments made to the Gambling Act 2003 was the Te Rapa Tavern in Hamilton. The photos below show the old rundown premises and the new modern premises. The redevelopment cost $3, The old Te Rapa Tavern The new Te Rapa Tavern 92. A venue is sometimes required to relocate to adjacent premises due to its fixed lease coming to an end or public works acquisition. When it is clear that the same business exists but has simply relocated a short distance, it is fair and reasonable for the policy to permit the venue to continue its current gaming machine operation. 93. Enabling relocation enables venues to move out of buildings that may be earthquake prone. 94. Currently, once a venue has obtained a licence to host gaming machines its value is artificially increased. This often leads to landlords demanding higher than normal rentals. Allowing relocation prevents landlords demanding unreasonable rentals as it gives the venue operator the ability to relocate to an alternative venue. 95. Enabling relocation enables venues to re-establish after a natural disaster or fire. Alcohol and Gambling 96. The Baron and Dickerson study 44 found that two or more alcoholic drinks increased reports of difficulty in resisting urges to gamble. The study also found that continued alcohol consumption during a gambling session resulted in unplanned, extended gambling. The report stated: Results indicated a consistent theme of alcohol use contributing significantly to impaired control of gambling behaviour 44 Baron, E., and Dickerson, M.G. (1999). Alcohol consumption and self-control of gambling behaviour, Journal of Gambling Studies, 15(1), 3-15 ( 31

32 A gambler s choice to resist urges to either start or stop gambling and to limit expenditure may be seriously affected under the influence of alcohol. These exploratory findings present a picture of a regular gambler drinking alcohol prior to a session of gambling and having increasing problems with control in resisting urges to begin a session of gambling (one in eight players (13.3%) found it difficult to resist playing the card machines after having a few drinks ). Continued drinking of alcohol appears to be moderately associated with progressive levels of impaired control within a session of gambling, and appears to further add to the problems of ending a session of play for the gambler. 97. The Kyngdon and Dickerson study 45 was a study involving gaming machine players who also regularly consumed alcohol. Participants received three alcoholic drinks (experimental group) or non-alcoholic drinks (control group) prior to gambling. The study demonstrated that alcohol consumption is associated with riskier styles of gambling among regular gamblers and problem gamblers. The report stated: Subjects either received a prior intake of three alcoholic drinks each containing approximately 10 g of pure alcohol (beer or wine) or an equal volume of an equivalent non-alcoholic beverage. The alcohol group persisted for twice as many gaming trials as the placebo group with significantly more players who had consumed alcohol losing all their original cash stake (50% compared with 15% of the placebo group). The result showed that relatively small quantities of alcohol have a significant effect on the psychological processes that underpin self-control over gambling....half the participants administered alcohol persisted at gambling until they had lost all their money. Only 15% of the participants in the placebo group did similarly. Thus is appears that the consumption of alcohol led to participants engaging in significantly greater persistence at gambling while losing. The main finding of the present study was that in young men who were regular EGM players and drinkers, three standard drinks doubled the duration of gambling when losing and resulted in more players losing all their original stake. 98. In the commentary of the special edition of the Journal of Gambling Studies, 46 Peter Nathan commentated on the link between alcohol consumption and gambling and noted that it was no wonder that so many casinos provide free drinks to their patrons. The commentary stated: Moderate intoxication, especially of pathological gamblers, apparently increases time spent gambling, rate of power bets, and proportion of losing hands played. All three reflect impaired judgement that presumably leads to greater gambling losses. No wonder so many casinos provide free drinks to their patrons. 45 Kyngdon, A., and Dickerson, M. (1999). An experimental study of prior alcohol consumption on simulated gambling activity, Addiction, 94, ( /download/misc/kyngdon_dickerson.pdf). 46 Nathan, P. (2005) Commentary, Special Issue, Journal of Gambling Studies, 21(3), ( 32

33 99. The Stinchfield, Kushner and Winters study 47 confirmed that the consumption of alcohol promoted problematic gambling behaviour and noted that limiting gambling in drinking establishments would be expected to reduce problem gambling. The report stated: Recent research has made it clear that problematic gambling is often accompanied by problematic alcohol use. Patients with frequent alcohol use had greater gambling involvement at baseline than infrequent alcohol users. Recent research demonstrates that there is a robust relationship between problem gambling and alcohol use disorders (AUDs). In the Welte et al. (2001) randomized telephone survey described above, it was reported that the risk for either current alcohol dependence or pathological gambling was increased by a factor of over 23, given the presence of the other. Similarly, while pathological gambling in the general U.S. community appears to range from 2 to 5% (above), the rate of problem gambling among alcoholism treatment patients ranges from about 9% to as much as 33%. As suggested by Smart and Ferris (1996), alcohol use serves to promote problematic gambling as a direct real-time effect (e.g., via disinhibition of reckless gambling behaviour), In this regard, Welte et al. (2001) also found a dose response relationship between alcohol intake and gambling with those drinking more than four drinks per day being over five times more likely to display problematic gambling. the greater proximity of pull-tab gambling experienced by those attracted to drinking establishments may lead to more frequent pull-tab gambling. If true, limitation of gambling venues in drinking establishments would be expected to lower problematic gambling among a significant segment of the population The Potenza, Steinberg and Wu study 48 found that problem gamblers who also had alcohol use problems had more severe issues (arrest, attempted suicide) due to impaired impulse control. The report stated: The findings highlight the strong relationship between alcohol use problems and other substance use problems, and suggest that problem gamblers with as compared with those without alcohol use problems demonstrate greater problems in multiple areas (arrest, attempted suicide) linked by impaired impulse control The Ellery, Stewart and Loba study 49 found alcohol significantly increased time spent playing and tended to also increase rate of power-betting (high risk type betting). The report stated: Gamblers from each SOGS category were randomly assigned to either a moderately intoxicating alcohol dose or a control beverage condition (n = Stinchfield, R., Kushner, M., Winters, K. (2005). Alcohol Use and Prior Substance Abuse Treatment in Relation to Gambling Problem Severity and Gambling Treatment Outcome. Journal of Gambling Studies, 21(3), ( /download/misc/stinchfield_kushner_winters.pdf). 48 Potenza, M., Steinberg, M., Wu, R. (2005). Characteristics of Gambling Helpline Callers with Self-Reported Gambling and Alcohol Use Problems. Journal of Gambling Studies, 21(3), ( /download/misc/potenza_steinberg_wu.pdf). 49 Ellery, M., Stewart, S., Loba, P. (2005). Alcohol s Effect on Video Lottery Terminal (VLT) Play Among Probable Pathological and Non-Pathological Gamblers. Journal of Gambling Studies, 21(3), ( /download/misc/ellery_stewart_loba.pdf). 33

34 per cell in the 2 x 2 between-subjects design). Following beverage consumption and absorption, participants played a video poker VLT game for up to 30 minutes. Four behaviors were measured: power-bets (doubling bet after viewing only two cards of the five-card poker hand); total money spent; mean bet magnitude; and number of minutes played. Alcohol increased time spent playing and rate of power-bets, particular among the probable pathological gamblers The link between alcohol use, smoking and problem gambling was noted by the Ministry of Health in the 2009 document A Focus on Problem Gambling: Results of the 2006/07 New Zealand Health Survey 50 as follows: Problem gambling was significantly associated with current smoking and hazardous alcohol consumption. Compared to people with no gambling problems, problem gamblers had: times the odds of being a current smoker times the odds of having hazardous drinking behaviour after accounting for possible confounding factors. Targeting Low Income Communities and Maori and Pacific Island People 103. Prior to the 2003 Gambling Act, there was no express age restriction on class 4 gambling. This was addressed by requiring all class 4 venues to be in licensed premises where there was a restricted or designated liquor licence. Gaming machines were therefore installed in pubs and taverns. Wherever there is a high number of pubs and taverns there will typically be a high number of gaming machines Gaming machines have tended to remain in pubs and taverns in low decile areas due to sinking lid polices being in place that prevent the venues and/or machines relocating When machines are able to be relocated, clause 4 of the Gambling (Harm Prevention and Minimisation) Regulations 2004 limits the type of venues that can host gaming machines. For example, gaming machines cannot be installed in an internet café, theatre or cinema Currently the places with the highest number of machines per head of population are Kaikoura, Thames Coromandel, McKenzie District, Waitomo, Grey District, South Wairarapa and Buller Porirua, Manukau and Waitakere are areas that have some of the lowest density of gaming machines. There were 73 territorial authorities prior to the Super City being formed. Porirua, Manukau and Waitakere rank 60 th, 71st and 73 rd based on gaming machine density In the 2010 Health Sponsorship Council report it was noted that people with low household equivalised incomes were less likely to gamble at all, and participated in most activities at a lower rate than people with medium or high household

35 equivalised incomes. 51 The survey found that the majority of people who played non-casino gaming machines had either a medium or high household equivalised income. In contrast, the majority of people who participated in internet gambling had a low or medium household equivalised income. Internet Gambling and Mobile Phone Gambling 109. The only organisations that are able to conduct remote interactive gambling (such as gambling over the internet) within New Zealand are the New Zealand Racing Board and the New Zealand Lotteries Commission. While it is illegal to advertise overseas gambling in New Zealand, it is not illegal to participate in gambling on an overseas based website or to gamble on overseas competitions and games Traditionally overseas based online gambling has not been available to people in lower socio-economic areas due to limited access to computers, the internet and access to credit cards. However, this is changing. The internet is progressively becoming a normal feature of commercial and social exchange. Today it is common for the most basic of prepaid smart phones to include internet access and the ability to download apps. The introduction of Visa debit cards and Prezzy Cards mean that a bad credit rating is no longer a barrier to being able to spend money online or via mobile apps An internet search for pokies or gaming machine leads you to websites where you can download to your computer, tablet or mobile phone a vast array of casino games including all the common gaming machine games International Gaming Technology (an international provider of pokie machines with a New Zealand presence) has produced a 58 page brochure 52 detailing their online and mobile offering. The brochure s cover page states The Playing Field is Now Everywhere, Online and Mobile Gaming by IGT, It s a whole new game The weekly participation rate on internet and mobile phone gambling is high (due to accessibility). The 2010 Health and Lifestyles Survey found that 7% of non-casino gaming machine players participated in this form of gambling once a week. Internet gambling had the fourth highest participation rate, with 19% of people participating in this form of gambling at least once a week Gray, R 2011 New Zealanders Participation in Gambling: Results from the 2010 Health and Lifestyles Survey Health Sponsorship Council Participation_final-web.pdf (page 14) Gray, R 2011 New Zealanders Participation in Gambling: Results from the 2010 Health and Lifestyles Survey Health Sponsorship Council _Participation_final-web.pdf (page 16). 35

36 114. In Dr Philip Townshend s 2011 paper Quantifying the Harms of Internet Gambling Relative to Other Gambling Products, 54 Dr Townshend described internet gambling as the most harmful mode of gambling and the new crack cocaine of gambling. The paper stated: The Relative Harmfulness of Gambling Modes on the Basis of relative Risk of Provoking a Presentation to Treatment Gambling Mode Times Harmful compared to Lotteries Products on Basis of Presentation to Treatment Rates Lottery Products 1 TAB 38.7 Casino Machines 53.2 Casino Tables Non Casino Machines 389 Internet 443 On this basis internet gambling is 443 times, non casino machines are 389 times, casino tables are 138 times, casino machines are 53 times and TAB products are 38 times as harmful as Lottery products. Based the likelihood of a gambler presenting to treatment services, Lottery products might not be on an ABC classification system, TAB and casino tables might be Class C, casino machines might be class B and non-casino machines and internet might be Class A products. So far both machine gambling and internet gambling look like the crack cocaine of gambling. These findings are broadly inline with those of Griffiths and Wardle (2009)[ M Griffiths, H Wardle, J Orford, K Spronston, B Erens. Sociodemographic correlates of internet gambling: Findings from the 2007 British Gambling Prevalence Study. CyberPsychology and Behaviour. April 2009, 12(2): ] who on the basis of the 2007 British Gambling Survey suggested that the introduction of internet gambling may lead to increased problematic gambling behaviour and Wood et al (2007) [R Wood, R Williams, P Lawton. Why do Internet gamblers prefer online verses land-based venues? Some preliminary findings and implications. Journal of Gambling Issues 2007, 20: 236] who found results suggesting that internet gambling may be more harmful than other modes On 28 May 2015, The World Today posted an article Dramatic increase in online gambling addiction among young men, treatment clinic warns. Excerpts from the article are below: Some teenagers are racking up debts of $30,000 through online sports betting, and the number of young people asking for help has doubled in three years, the University of Sydney s Gambling Treatment Clinic says. The treatment centre s operator says the bulk of their clients used to be poker machine addicts, but now they are treating mostly young men in trouble with online betting

37 Dr Christopher Hunt has been a clinical psychologist at the University of Sydney s Gambling Treatment Clinic for eight years. Dr Hunt said he believed the increased promotion of online gambling is to blame for the rise, as well as the easy access to online betting through smartphones and tablets On 28 April 2015, the Problem Gambling Foundation circulated a link to an article published on Huffingtonpost about the rise of gaming on smart phones. Excerpts from the article are below: Mobile is taking an increasing bite out of our lives - there is no longer any place safe zone from someone next to you texting, gaming, surfing or worse, yapping incessantly about God knows what. I think the next horizon or maybe distraction for many will be gambling on smartphones. "Traditional" gaming companies are quickly moving from online gaming to online gambling and much of the latter is via a phone. Bandwidth is cheap, smartphones are ubiquitous: by 2016 it's estimated over 2 billion people will have smartphones. Global revenues from online gambling via pure play sites like TitanBet are leading the fray online gambling is projected to be over $35 billion this year, with mobile gambling estimated to be over $100 billion by Clearly, the market is moving from desktop connectivity to mobile, especially as Apple and Samsung continue to improve the size of their screens, making it much easier to access and utilize any type of gaming site. There is too much reward baked in to smartphone gaming and I would wager by 2020 (or sooner) you will have to put up with that person next to you shouting bingo and possibly broadcasting a Periscope enabled hologram of a blackjack hand. Stay tuned and connected, or maybe not Organisations like GrandReef.TV work around New Zealand s prohibition on advertising overseas based online gambling by advertising a sister website that uses only play money. However, a Google search of GrandReef.TV leads you to grandreefcasino.com, a website that describes itself as Australia & New Zealand s #1 online casino. This website allows you to use play money or gamble using real money. The inducement to deposit funds and gamble is strong with up to 100% 37

38 matching bonuses for initial deposits. Below is the first result that shows in a Google search for GrandReef.TV 1. Grand Reef Casino - Australia & New Zealand's #1 online casino Play the best online games at Grand Reef.... Welcome to Grand Reef Online Casino. We are... Grand Reef Casino is a partner site of grandreef.tv. Getting Started - Promotions - Online slots - Support 118. This direct advertising spend is significant. Estimated advertising rate-card spend (pre-discount) for the year to January 2012 was $0.9m for Pokerstars and $1.8m for Grand Reef Casino. An example of a Grand Reef Casino advertisement can be viewed at: The prohibition on advertising can also be averted by overseas based gambling providers sponsoring overseas sporting teams and sporting venues. The logos of overseas based gambling providers are painted on overseas sporting pitches and appear on side-line billboards. These are visible in New Zealand sporting broadcasts Current domestic research 55 has estimated 174,000 New Zealanders gambled online with an offshore operator (all forms of gambling), with per annum customer losses estimated at $110m Offshore based online gambling poses considerable risks: a. Offshore based online gambling is highly accessible, being available 24 hours a day from the comfort and privacy of your home; b. Offshore based online gambling has no restrictions on bet sizes; c. Offshore based online gambling has no capacity for venue staff to observe and assist people in trouble; d. Offshore based online gambling reaches new groups of people who may be vulnerable to the medium; e. Offshore based online gambling provides no guaranteed return to player; f. Offshore based online gambling is more easily abused by minors; g. Offshore based online gambling has reduced protection to prevent fraud, money laundering or unfair gambling practices. The most notable recent example being Full Tilt Poker which is alleged by the US Attorney s Office to have diverted USD444m from customer accounts to its directors and shareholders, despite being regulated by the Alderney Gambling Control Commission (Guernsey); and h. As an unregulated form of gambling, on-line gamblers are often encouraged to gamble more by being offered inducements or by being offered the opportunity to gamble on credit. For example, many overseas sites offer 55 Nielsen 38

39 sizable cash bonuses to a customer s account for each friend that they induce to also open an account and deposit funds Offshore based online gambling does not generate any community funding for New Zealanders, does not generate any tax revenue for the New Zealand Government and does not make any contribution to the New Zealand health and treatment services as no contribution is made to the problem gambling levy The Problem Gambling Foundation of New Zealand has produced a fact sheet on online gambling. The fact sheet is reproduced below: 39

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