Item 5: Gambling Venue Policy
Review Deliberations Report
|
|
Planning and Regulatory Committee
6 December 2018
|
REPORT R9726
Gambling
Venue Policy Review Deliberations Report
1. Purpose
of Report
1.1 To
consider submissions to the draft Gambling Venue Policy (the Policy), agree to any
amendments and recommend to Council adoption of the final Policy.
2. Summary
2.1 Nelson
City Council is required by the Gambling Act 2003 and Racing Act 2003 to review
its Gambling Policy every three years. A review of the Policy has been
undertaken including consultation with the community on proposed changes, and
hearings of submitters.
2.2 The
Committee now has the option to recommend to Council to adopt the proposed
Policy or not (Attachment 1: A2090535).
2.3 At
its meeting on 20 September 2018, Council approved the deliberations meeting
for 29 November 2018. However, to ensure attendance by Committee members,
this date was subsequently changed to 6 December 2018. Notice of this change
has been advertised.
3. Recommendation
|
That the Planning and Regulatory
Committee
Receives the report Gambling
Venue Policy Review Deliberations Report (R9726) and its attachments (A2090535, A2070544);
Amends
the draft Gambling Venue Policy (A2090535) as appropriate based on
consideration of submissions.
|
Recommendation to Council
|
That the Council
Adopts
the Gambling Venue Policy (A2090535).
|
4. Background
4.1 The
purpose of the Gambling Venue Policy (the Policy) is to set out Nelson City
Council’s requirements for new territorial authority consent applications
for Class 4 or Totalisator Agency Board venues to be established within the
Nelson district.
4.2 The
Gambling Act 2003 and the Racing Act 2003 both require the Council’s
Policy to be reviewed every three years. As a result of the most recent Policy
review a number of amendments were proposed. Amendments to the Policy require
the use of the special consultative procedure (SCP) under s83 of the Local
Government Act 2002 (LGA). In line with this requirement Council approved the
Statement of Proposal (SOP) and draft Gambling Venue Policy for public
consultation at its meeting on 20 September 2018.
5. Discussion
Public
Consultation process
5.1 Public
consultation on the proposed amendments ran from 24 September to 24 October
2018. The consultation was supported by a media release, an article in Our
Nelson (as well as the Nelson Mail), inclusion on Council’s website and
via social media. Submission information was also placed at Nelson’s
public libraries and Council’s Customer Service Centre.
5.2 At
the same time, letters were sent to each society holding a Class 4 licence in
the district (Gaming Trusts), as well as to organisations representing
Māori in the district (local iwi, Whakatū Marae, government funded
organisations and community groups). Other stakeholders, such as those that
have previously submitted or provided feedback on the Policy (including individuals
and organisations), were also informed of the public consultation opportunity.
Additionally, the consultation was an item at the Nelson Community and Whanau
meeting and circulated through Community News & Views, a fortnightly
community e-newsletter which has a membership of approximately 800. Sport
Tasman also circulated the information to all local sports groups in its
network.
5.3 The
Planning and Regulatory Committee, heard submitters on 13 November 2018.
Thirteen submitters spoke at the hearings. This report takes into
consideration both written and verbal submissions.
Summary of
Submissions
5.4 A
total of 50 submissions were received. Thirteen of the submissions were late
submissions, and were tabled at the Hearings on 13 November 2018. A summary
of the submissions, including the proposed officer response is attached
(Attachment 2:A2070544).
5.5 In
general, submitters expressed two different viewpoints: support for a reduction
in gaming machine numbers in recognition of the harm they cause or support for
continuation of the status quo in recognition of the benefits the Nelson
community receives through grant funding. Those in support of further
regulation of gambling, in general supported a sinking lid.
Options
proposed in the SOP
Reduce
the cap of Electronic Gaming Machines (EGMs) from 273 to 162
5.6 Council
has imposed a cap on the number of EGMs, commonly known as pokies, since the
Policy was first adopted in 2004. The cap has been slowly reduced over time
with the current cap, set in 2013, allowing 273 EGMs to operate in the Nelson
district. The SOP proposed a further reduction of the cap to 162 EGMs, which is
the number licenced to operate at the time the SOP was approved by Council.
5.7 The
majority of submitters supported the Council’s approach to further reduce
the number of EGMs in Nelson. Those who supported a reduction (either through a
reduced cap or sinking lid approach) voiced concern for the harm that gambling
causes, the impact of ‘wasted money’ and a view that EGM harm far outweighs
its benefits.
5.8 While
most of the submitters who supported a reduction in EGM numbers called for a
sinking lid policy, many of those also expressed support for a reduced
cap.
Introduce a limit, of five
EGMs, on the number of EGMs allowed at new venues
5.9 Of
the submitters who supported a reduction in EGMs, a small number specifically
noted support for the option to introduce a reduced number of EGMs allowed at
new venues as a method to reduce harm.
5.10 There
were a number of submissions (from Gaming Trusts) who opposed this option. The
reason for opposition was that it cost the same to install and operate five
machines in a venue as nine machines and that therefore less money would be
available to the community through grant funding.
Prevent the location of new
venues in areas of high deprivation
5.11 The
intent of a location restriction is to reduce harm to Nelson’s more
vulnerable communities. This is because it has been shown that communities that
have a higher average deprivation score are more vulnerable to gambling harm.
5.12 This
option was supported by those in favour of less EGMs as well as several Gaming
Trusts who noted this as an effective method of protecting more vulnerable
communities and ensuring harm minimisation. There was only one submitter who
opposed this option due to Nelson’s short travelling distance to gaming
venues.
Editorial amendments
5.13 Two
submitters disagreed with the proposal to amend the Policy’s objective,
preferring the current objective. The intent of this amendment is for the
objective to be more closely aligned to the purpose of the legislation as set
out in the Gambling Act 2003 and the Racing Act 2003.
5.14 One
submitter noted support for the editorial amendments with the exception of the
100m ATM rule which they wanted removed. Options for the ATM rule are discussed
later in this report.
5.15 In
general, submitters expressed support for the editorial amendments, both those
advocating for a reduction in EGMs as well as those who supported a status quo
policy.
Submitter proposals
Sinking Lid
5.16 Of
the submitters who supported a reduction in the number of EGMs, the majority
requested further restriction through a sinking lid. The main themes from these
submitters included a view that reducing the cap to the current number of EGMs
licenced to operate did not go far enough as it reflects the status quo of
gambling availability in the district and that the benefits from EGMs (through
funding) comes at the expense of vulnerable people and communities. Some also
noted that EGMs are disproportionally concentrated in areas of higher
deprivation and therefore have a greater impact on these communities.
5.17 A
sinking lid policy is a more restrictive policy option than a cap. Under a
sinking lid policy, when a venue surrenders its licence or has its licence
suspended, the approved number of EGMs would automatically drop to the number
of EGMs licensed to operate. However, operators have a six month grace period
(following licence suspense/surrender) to reapply to re-establish the EGMs
without requiring a council consent.
5.18 Those
opposed to a more restrictive Policy cited reasons that further restrictions
would lead to reduced community funding, would encourage spending in other
gambling activities from which there may be no community funding benefit (e.g.
online gambling), and was unlikely to result in fewer problem gamblers given
this number has remained relatively static in an environment of falling
EGMs.
Support to retain the status
quo cap (273) on EGMs
5.19 Submitters
supporting a status quo Policy raised the view that measures, such as a cap or
sinking lid, are ineffective in reducing gambling harm as evidenced by the rate
of problem gambling remaining static while numbers of EGMs steadily decline,
and lead to reduced grant income for communities. Some submitters commented
that the small number of users who go on to become problem gamblers does not
warrant further restriction and that help is available through gambling support
services. Submitters also commented that retaining the status quo recognises
the contribution the industry brings to the local economy through employment
and hospitality services.
5.20 One
submitter suggested a population based cap which would be set at one machine
per 220 people (based on Nelson’s 2013 population census data), as a
compromise between the current cap of 273 and the proposed cap of 162. This
would result in an initial cap of 211 EGMs, although the number of EGMs
permitted would increase as Nelson’s population rises. A population
based cap is used by a small number of territorial authorities in New Zealand,
however the percentage of machines per adult population varies from council to
council.
100m ATM rule
5.21 A
number of submitters requested that Council remove the 100m ATM rule. The main
reason for this was that it was unclear as to how this requirement was an
effective policy tool, given that many venues have ATM facilities and money can
be withdrawn over the bar.
5.22 However,
the submission from the PFG Group noted that ATM machines should not be readily
available near EGM venues and that the Group opposed removal of this
clause.
5.23 The
100m ATM rule has been in the Policy since 2007 following recommendations from
the 2006 Social Impact Assessment report. It was originally supported as means
of ensuring gamblers took a break from gambling if they wished to withdraw more
funds for gambling.
5.24 As
ATMs have become more prevalent in recent years and users of ATMs have access
to cash withdrawals at venues through Eftpos and some venues have installed
ATMs after a venue consent has been granted, the Committee may wish to consider
removing this clause.
Relocation provision
5.25 A
number of submitters also requested that Council introduce a relocation
provision to allow venues to relocate to other areas. Reasons provided in
support of a relocation clause were that landlords can charge a higher than
usual rental when a venue has EGMs and relocation would allow the operator to
move, would enable reestablishment after a natural disaster or fire, and venue
movement from larger premises to smaller ones as required.
5.26 There
are currently three venues located outside the city centre - fringe which are
all longstanding venues serving their local communities. Introducing a
relocation clause would be unlikely to result in a change to the siting of
these venues.
5.27 Not
including a relocation clause might also assist with Council’s objective
of reducing EGMs over time, and in tandem with introducing a reduced cap or
retaining a status quo Policy, would still provide for venues to relocate if
they chose to.
5.28 The
disadvantage to Gaming Trust and venue operators of not introducing a
relocation clause is that those with a higher number of EGMs (e.g. 18 EGMs)
would be required to reduce the number of EGMs allowed in the new venue when
seeking a consent.
Club mergers
5.29 Three
submitters requested that the provision for club mergers either be removed or
that the five EGM rule for new venues also apply to club mergers, if it was to
be adopted.
5.30 If
Council wished to adopt this approach, it would need to consider whether
further consultation on this point was required as this option did not form
part of the SOP. This proposed change is also unlikely to significantly affect
the number of EGMs as few mergers occur. Officers therefore do not support this
proposal.
External
signage
5.31 Two
submitters asked that Council consider restricting external signage promoting
gaming machines at venues. Signage can be on exterior walls and as street
facing neon, blackboard signage or on sandwich boards.
5.32 The
only type of gambling signage that is specifically prohibited in New Zealand is
external signage promoting gaming machine jackpots and/or casino activity which
is regulated by the Department of Internal Affairs (DIA).
5.33 In
relation to Council rules, signs attached to buildings are controlled under the
operative Nelson Resource Management Plan (the Plan), and in future will be
controlled under its replacement, the Nelson Plan. The current provisions
control aspects like sign size and illumination. Generally, provision for
larger signs is made in the commercial zones, including the CBD, Stoke and
Tahunanui, rather than in residential or rural environments.
5.34 The
Plan does not make a distinction about the nature of the activity to which the
sign relates to e.g. the provisions do not single out gambling venues and
impose more stringent controls on these than for other activities. The
challenge in doing so would be to identify the ‘environmental
effects’ of such venues that would justify a more stringent approach
under the Resource Management Act.
5.35 Sandwich
boards are not controlled under these plans but the Urban Environments Bylaw
No. 225 which manages their use for advertising purposes within the city
centre.
5.36 Other
than the two submissions, no complaints have been received in relation to
gambling venue signage. In response to the submissions, the 11 venues have
since been assessed for compliance with Council’s signage policy and a
number of venues were found to be non-compliant with their use of sandwich
boards in the CBD area. Actions are being planned to address any non-compliance
in the CBD for all businesses over the summer season.
5.37 The
two submitters will also be informed that there will be an opportunity to
provide feedback on the section relating to signage in the draft Nelson Plan
when it becomes available for consultation.
Supporting arguments
5.38 Points
raised by submitters have generally followed two philosophical viewpoints on
whether or not the benefits of EGM gambling outweigh its harm.
5.39 The
Gambling Act 2003 has a number of objectives including: to regulate the growing
number of gaming machines; reduce the harm caused by gambling; ensure that
gambling raises funds for the community and to enable the community to have
involvement on decisions about access to gambling.
5.40 Nationally,
EGM numbers have been consistently declining since 2003, and in Nelson, EGM
numbers have halved over this time. In spite of decreasing numbers, EGM expenditure
(the amount spent by players minus player winnings) fluctuates.
5.41 In
Nelson, expenditure has peaked to over $10 million in 2008, 2011 and in 2017.
Current data for the first three quarters in 2018 shows EGM expenditure
continuing this trend with over $7.75 million already expended. Based on these
figures it is expected that expenditure for the year will also total over $10m.
5.42 This
would be the first time in ten years that two consecutive years of expenditure
would each total over $10 million in Nelson.
5.43 Recent
research into the influences of EGM expenditure only found two factors to cause
increased EGM expenditure. These were the number of venues where gaming can
happen and the availability of new-generation Stand Alone Progressive Prize machines.
Factors such as employment, average earnings, international visitor numbers and
GDP were not shown to be related to EGM expenditure.
5.44 Gaming
Trusts are directed under the Gambling Act 2003 to distribute 40% of their EGM
proceeds to communities through grants. Therefore, the percentage of money
available to communities through grants is based on total expenditure of a
district and not the number of EGMs.
5.45 Over
the last 10 years expenditure in Nelson has averaged $9.8m per year. Based on these
figures it is likely that community funding will continue at the same, or a
similar rate, as over the last decade even if a reduced cap was to be
adopted.
5.46 Although
many Gaming Trusts have a policy to return funds to the communities in which
they were generated, this is not always the case. Several of the Trusts
operating in Nelson return a significant amount to services outside of the
Nelson district.
5.47 Based
on figures provided by the Department of Internal Affairs (prepared by the PGF
Group), direct grant funding back to the Nelson community has averaged
approximately $1.8m over the last five years. Compared to the average gaming
expenditure of $9.8m, noted in 5.45 above, this amounts to a combined return
rate total of approximately 18% to the Nelson community from Gaming Trust
grants. It should be noted that this does not include grants made to the wider
region or to national organisations where residents of Nelson might also
benefit.
* DIA
www.dia.govt.nz
** PGF
data provided by the DIA July 2018.
5.48 Over
50% of grants are distributed to sporting groups however other sectors such as
community organisations, education and arts also receive a percentage of
funding. Council also receives grants from time to
time.
5.49 Of
the money generated by EGMs, and not including the money returned to
communities through grants, 60% continues to be lost to players. There is no
way of knowing how much of this is generated by locals or visitors to the
region.
5.50 There
continues to be some debate about gambling harm, who is affected and how to
measure it. However, it is generally considered that problem gambling is more
prevalent in lower income households and that gambling venues are more
concentrated in areas of higher deprivation, suggesting there is a higher
burden to the less well off.
5.51 Examples
of types of harms caused by gambling include financial loss, relationship
difficulties, family violence, distress, cultural harm, and criminal activity.
5.52 In
Nelson, 97 clients (40 of these were new clients) received face to face help
for the year, 1 July 2016 to 30 June 2017. Research suggests that although the
prevalence of gambling harm is relatively low for the total population, it
continues to be high for those who gamble regularly.
6. Options
6.1 Having
considered the submissions, Council now needs to decide whether the
Policy’s approach to the establishment of new gaming venues should be
more restrictive, the same or less restrictive than the existing Policy.
6.2 Options
are noted below: Option 1 is the recommended option.
|
Option 1:
Adopt the Policy (Attachment 1: A2090535) as proposed in the SOP
This option
would see a reduced cap of 162 EGMs, a limit on the number of Class 4
machines allowed at new venues (five EGMs), provision that new venues cannot
be located in high deprivation areas, that being an area with an average
deprivation of eight or higher (excluding the CBD), and the editorial
amendments as proposed.
|
|
Advantages
|
· In
alignment with Council’s objective to support harm minimisation
principles as it limits the number of EGMs (and therefore venues) allowed to
operate in the district.
· New
venues would only be permitted to establish a smaller number of EGMs for
gaming activity.
· Based
on recent EGM expenditure, capping machine numbers would continue to enable
the current level of community funding.
· Would
safeguard Nelson’s more vulnerable communities as venues would be
restricted from being established there.
· Was
supported by submitters concerned with the harm caused by gambling.
|
|
Disadvantages
|
· Was
not supported by submitters concerned that this approach may lead to reduced
funding to the community (through grants) and the impact of this on provision
of community services.
· Does
not go far enough to satisfy some submitters.
|
|
Option 2: Roll
over the existing Policy (e.g. status quo)
This option would
see the Policy retain the cap of 273 EGMs
|
|
Advantages
|
· Was supported by submitters who were concerned that a more
restrictive policy may lead to reduced funding (through grants) being
available to communities.
· Would recognise the contribution the industry brings to the local
economy through employment and hospitability services.
· Was supported by those with view that EGM numbers have had little
effect on problem gambling rates.
|
|
Disadvantages
|
· Was not supported by submitters who wanted to see a reduction in
the number of EGMs in recognition of harm caused by gambling.
· Was not supported by those who believed that the benefits of
gambling (from grants) comes at the expense of vulnerable communities and
people.
|
|
Option 3:
Adopt a more restrictive policy option than proposed in the SOP.
This option would
see the introduction of a sinking lid policy.
|
|
Advantages
|
· In
alignment with Council’s objective to support harm minimisation
principles as no new consents would be granted, either for new venues or for
increasing the number of machines at existing venues.
· Would, over time, reduce access to EGMs across all communities and
not only those in high deprivation communities.
· Was supported by submitters who were concerned with the harm
caused by gambling.
|
|
Disadvantages
|
· Was
not supported by submitters who advocated for a status quo policy, who were
concerned with the potential reduction of money returned to the community
through grants, and believed that greater restriction does not lead to
reduced harm.
· Existing
venues may be more reluctant to relinquish their licences knowing
these could not be reinstated.
· May result in unintended consequences such as providing existing
venues with a commercial advantage as no new venues would be able to be
established.
|
|
Option 4:
Adopt a less restrictive Policy.
This option
could include removal of the 100m ATM rule as well as introduction of a
relocation clause.
|
|
Advantages
|
· Removal
of the 100m ATM rule was supported by submitters who saw this as an
ineffective policy rule given that users can withdraw money over the bar
and/or in venues that have ATMs.
· Introduction
of a relocation clause was supported by submitters who advocated for the
rights of operators to move in certain circumstances, such as when landlords
demand higher rentals or in the event of a natural disaster or fire.
|
|
Disadvantages
|
· Likely
to be seen as making it easier for new venues to be established, or venues
being established in a wider range of areas if the 100m rule was removed.
· May
place more pressure on vulnerable communities.
· Would
not be supported by those concerned with gambling harm.
|
6.3 The
Committee could:
· Recommend to Council to
adopt the proposed Policy as set out in the SOP and in this report; or
· Make further amendments
to the proposed Policy and recommend to Council to approve, or consult with the
community on these.
7. Conclusion
7.1 On
balance, and noting the views of submitters, officers’ advice is that the
Committee recommends to Council that it adopts the proposed Gambling Venue
Policy (A2090535), effective from 13 December 2018.
Author: Gabrielle
Thorpe, Policy Adviser
Attachments
Attachment 1: A2090535
- Draft Gambling Venue Policy ⇩
Attachment 2: A2070544
- Proposed responses to feedback on the draft Gambling Venue Policy ⇩
|
Important considerations for decision making
|
|
1. Fit
with Purpose of Local Government
Council is required, by the Gambling Act 2003 and
the Racing Act 2003, to have gambling venue policies in performance of its
regulatory functions. A requirement of the legislation is that the Policy
must be reviewed every three years, and if changes are proposed, that a
special consultative procedure be undertaken to ascertain community
views.
|
|
2. Consistency
with Community Outcomes and Council Policy
Consulting with the community on proposals to amend
the Gambling Policy, as well as controlling the number of gambling venues,
machines and their location contributes to the following community outcomes:
· Our
communities are healthy, safe, inclusive and resilient
· Our
Council provides leadership and fosters partnerships, a regional perspective,
and community engagement
|
|
3. Risk
Risk has been reduced through the opportunity for
the community to provide feedback on the matter. Officers consider that the
correct consultation processes have been followed, however if Council was to
choose an alternative option, that is significantly different from those that
were consulted on, there is a risk that further consultation may be required.
|
|
4. Financial
impact
The recommendations in this report contain no
further cost to Council. However, if Council chose to adopt a significantly
different option, then further consultation by way of a special consultative
procedure may be required incurring further cost. This would be met within
existing budgets.
|
|
5. Degree
of significance and level of engagement
This matter is of low significance to most members
of the community, particularly those who do not gamble, but of high
significance to gaming societies, businesses and community groups reliant on
gaming machine proceeds. It is also of high significance to support groups,
individuals and families affected by gambling harm. In line with legislative
requirements Council has undertaken a special consultative procedure in
engaging with the community on its proposal to make some Policy
amendments.
|
|
6. Inclusion
of Māori in the decision making process
Letters were sent to organisations
representing Māori in the Nelson district, informing them of the
Gambling Policy review and consultation, and inviting them to provide
feedback.
|
|
7. Delegations
The Planning and Regulatory Committee has the
following delegations in considering Council’s Gambling Policy.
Areas of Responsibility:
· Public
Health
Powers to Decide:
· To hear and
deliberate on submissions for Special Consultative Procedures, or other
formal consultation requirements arising from legislation, falling within the
areas of responsibility
Powers to Recommend:
· Final
decisions on Special Consultative Procedures, or other formal consultation
legislative consultation procedures, falling within the areas of
responsibility
|
Planning and Regulatory
Committee
