Statistics suggest Gambling Act achieving its purpose to control the growth of gambling

10/10/2005

The Department of Internal Affairs today released quarterly gambling licensing statistics suggesting that the Gambling Act is achieving the purpose of controlling the growth of gambling when it comes to the number of non-casino gambling operators, venues and gaming machines. (The Act has eight limbs to its overall purpose. The first listed is to “control the growth of gambling” (section 3(a)).

Department Deputy Secretary Andrew Secker said that the trends that started, or accelerated, after the Act was passed in September 2003 are continuing: the total numbers of gaming machines and gambling venues are slowly declining, while the number of gambling operators is declining more rapidly.

Date	Gambling operators	Venues	Gaming machines
30 September 2005 (30 June 2005)	535 (553)	1,770 (1,801)	21,684 (21,846)
31 December 2004	584	1,850	22,231
31 December 2003	672	2,031	22,734
30 June 20031	699	2,122	25,221
31 December 2002	729	2,137	24,330
31 December 2001	785	2,129	21,012
31 December 2000	860	2,065	17,679
30 June 19992	947	2,137	13,812
31 December 1998	1,011	2,193	13,273

1. Machine numbers peaked in the quarter before the Gambling Act was passed.
2. Figures for 31 December 1999 are not available.

One of the biggest changes made in the Act was a much stricter licensing regime. The Act was intended to make it harder to get a gambling licence and easier to lose it.

The Act has also reduced limits on the numbers of machines allowed in venues. Venues licensed at 17 October 2001 can have up to 18 machines, while others can have up to nine. In addition, local authorities can use the Act to set gambling policies to prevent or limit new venues and control the expansion of existing venues, and many have done this.

Summary of trends
There has been a historical trend towards fewer gambling operators but each operator having more venues. The trend began many years ago and was probably due to economies of scale. The Act appears to have accelerated the change.

The number of venues fluctuated between about 2,000 and 2,200 from the early 1990s until the Act was passed. The number then dropped and has continued a slow decline. In general, operators are deciding to stop gambling operations at venues with fewer machines.

The number of machines increased markedly every quarter from when they were first licensed in 1988 until the Act was passed. The number dropped significantly when the Act was passed and has declined more slowly since then.

Local numbers available on this website at: Gaming Statistics

Further information, including numbers of venues and machines by territorial authority and the changes in these numbers, is also available from the Department’s website (see link above).

Gambling profits and operators’ grants to community groups
Another aspect of controlling the growth of gambling is to consider the amount of money spent by gamblers - that is, the gross profits made by operators. The statistics given above do not deal with gaming machine profits.

While some in the gambling sector state that profits have decreased, there is also anecdotal information suggesting that some operators have increased their profits.
Even if there were an overall 10% reduction in gross profits, this would be no more than a levelling off at the previous year’s level. It would still be more than double the gross profits made in 2000 and almost six times those made in 1995.

Profit figures for 2004-05 will not be available until near the end of this calendar year. In the previous financial year, to the end of 30 June 2004, gross profits from gaming machines in pubs and clubs were $1.035 billion.

In addition, new regulations require that gambling operators return a higher proportion of their gross profits to the community.

This means that even if gross profits reduced a little, the amount returned to the community could increase, and would certainly be more than double what was available for distribution to the community in 2000.

“The fact is that, despite some stories about community groups ‘missing out’ on money they would have received in the past, the true position will not be known until figures on gross profits are available later this year,” Mr Secker said.

“Yes, some groups have had applications for grants from gambling operators declined but that has happened every year in the past, when some applications were unsuccessful.”

Mr Secker said that it is important to keep in mind that earlier this year Parliament’s Regulations Review Committee heard complaints that regulations made under the Act would lead to reduced gambling profits and less money available for grants to the community.

The Regulations Review Committee dismissed all the complaints and stated that, even if less money did go to community groups because there was less gambling, this would still be consistent with the purposes of the Act.

Media contact
Andrew Secker
Deputy Secretary Phone 04 495 9329, Cellular 027 281 5211
Vince Cholewa
Communications Advisor Phone 04 495 9350, Cellular 027 272 4270