SkyCity Casinos Urged to Contribute 40% Instead of Just 0.7% of Pokie Money to the Community

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A pokie machine has the same pros and cons, whether it operates in a swanky land casino or in a pub or a club. However, the forced contribution to the community under the prevalent gambling rules are miles, even light years, apart for the two groups of service providers. Casinos are obliged to contribute 2.5 per cent or less, whereas “Class 4” gambling operators are obliged to contribute 40 per cent.

 

Hamilton City Council has raised its voice against this inequity and some other New Zealand cities have followed suit. Its specific demand to the Gambling Commission is that the SkyCity casino located on Victoria Street should start contributing 40 per cent of the proceeds from its pokie machines to the community, just like the pubs, clubs and hotels across the country are doing.  

What Gambling Operators Contribute to Charity Today

Before evaluating the case being made by the Hamilton City Council and others, it is important to list what the different gambling operators are actually paying, so that we can understand the enormity of the problem. The Gambling Act 2003 has different categories of gambling operators, of which two are pertinent for this discussion. Without getting into too much details, these are the casinos and the “Class 4” operators, which broadly include pubs, hotels and clubs. Each casino has a separate contract as of now that determines how much of the pokie profits it should pay to the community. All “Class 4” operators are covered under the same rule. 

  • SkyCity Hamilton allocates 1.5 per cent 
  • SkyCity Auckland allocates 0.7 per cent subject to a minimum of $500,000
  • The Dunedin Casino allocates 1 per cent subject to a maximum of $110,000
  • The Christchurch Casino allocates 2.5 per cent or $250,000, whichever is greater
  • SkyCity Queenstown allocates 2.5 per cent or $100,000, whichever is greater 
  • “Class 4” gambling operators have to allocate 40 per cent

A glaring exception is the SkyCity Wharf Casino (in Christchurch) that gave 20 per cent of its net profit to charity the first year it opened, adding an extra 1 per cent each year until it reached 30 per cent. It is also pertinent to note that the allocation of The Christchurch Casino was fixed as late as 2019. Most of the casinos operate a charity trust which is funded as required and whose functioning is regulated by the New Zealand Gambling Commission. 

“It’s truly illogical and frankly unfair that Class 4 gambling operators such as pubs and clubs are bound to contribute at least 40% of their pokie take to the community, while the actual casinos are bound by no such rules,” the spokesperson from NZCasinoClub.com says.

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Protests Against the Rate Disparity

Several agencies have protested against this glaring discrepancy, the Hamilton City Council being among the first ones to do so. In a written submission to the New Zealand Gambling Commission, the council has pushed for a review of licence conditions for casinos around the country and a consequent change in the gambling rules. The council chief executive Richard Briggs makes clear, “Hamilton City Council is strongly of the view that the 1.5 per cent of revenue currently returned by SkyCity to Hamilton’s community is completely ‘out of sync’ with the 40 per cent net proceeds that Class 4 venue operators are required to return.” Two specific points need to be highlighted.

 

  • The Hamilton City Council submission states that the different random figures for the different casinos need to be standardised by the Gambling Commission and minimum contribution levels on parity with Class 4 operators need to be set.
  • The council further demands that not just be the pokie machines but all forms of gambling in casinos need to be considered for the contribution to the community. It will be difficult to challenge this reasoning because if pokies allegedly result in gambling addiction so do the roulette and blackjack tables.

Paula Snowden, the chief executive of the Problem Gambling Foundation of New Zealand, takes the protest to a higher plane. The high level of taxation, though required, increases the community’s dependency on gambling. This creates a chain that higher gambling revenues lead to greater amounts given to charity that means more projects beneficial to the community. It must be pointed out that despite limits on gambling venues and gambling machines, the pokie turnover is steadily increasing.

In the endeavour to promote their brand as being useful to society, SkyCity engages in a lot of sponsorships and tries to tell the public that the casino is doing good for the community. Snowden does not mince words when she says SkyCity Casino is only returning a part of what it has taken from Hamiltonians. If Hamiltonians do not lose money to the casino in the first place there will be no need for the charity. 

Snowden also counters another claim that casinos make, which is that they provide entertainment and relaxation to people. She says, “If you go for a wander through the casino here in Auckland, if you wander around the tables and the pokie machines, you don’t see anyone looking like they are having fun. Mostly, everyone just looks desperate.”

The Response by SkyCity

We believe in providing a balanced view for our readers and are placing the response from SkyCity to these allegations. The casino points out that the level of annual contribution to be made to a charitable trust has been determined by the former Casino Control Authority and incorporated in the terms of the casino’s venue licence. SkyCity meets this commitment through its four community trusts that fund a range of local New Zealand organisations responsible for carrying out community service. The official statement adds, “In addition to meeting its licence conditions, SkyCity also undertakes a significant range of sponsorships and partnerships that drive genuine and measurable social impact in its communities.”

The Gambling Commission Initiative

The Gambling Commission has announced that it will review the charitable trust licence conditions attached to the venue licences for the Auckland, Hamilton, Christchurch, Dunedin, Queenstown and Wharf Casinos. The reason given is that these licenses were issued by the earlier regulatory body and need to be relooked. In the review, the Commission will consider whether these licence conditions require amendment and if so, it will advance specific variation proposals for further consultation. 15 submissions have been received from the city councils, the casino operators, government agencies and even organisations associated with the church.

Once the review has been completed, the Gambling Commission will decide on the course of action. We hope that in the very least the Commission will narrow down the differential rate of contribution that currently exists.

 

 

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