Ordinary meeting of the


Planning and Regulatory Committee


Thursday 6 December 2018

Commencing at 9.00a.m. - to deliberate on submissions to Gambling Policy

Council Chamber

Civic House

110 Trafalgar Street, Nelson


Pat Dougherty

Chief Executive


Membership: Councillor Brian McGurk (Presiding Co-Chairperson), Her Worship the Mayor Rachel Reese (Co-Chairperson), Councillors Luke Acland, Ian Barker, Bill Dahlberg, Kate Fulton, Stuart Walker and Ms Glenice Paine

Quorum: 4


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Please note that the contents of these Council and Committee Agendas have yet to be considered by Council and officer recommendations may be altered or changed by the Council in the process of making the formal Council decision.

Guidelines for councillors attending the meeting, who are not members of the Committee, as set out in Standing Order 12.1:

·      All councillors, whether or not they are members of the Committee, may attend Committee meetings

·      At the discretion of the Chair, councillors who are not Committee members may speak, or ask questions about a matter.

·      Only Committee members may vote on any matter before the Committee

It is good practice for both Committee members and non-Committee members to declare any interests in items on the agenda.  They should withdraw from the room for discussion and voting on any of these items.


N-logotype-black-widePlanning and Regulatory Committee

6 December 2018



Page No.


1.       Apologies

1.1       An apology has been received from Ms G Paine

2.       Confirmation of Order of Business

3.       Interests

3.1       Updates to the Interests Register

3.2       Identify any conflicts of interest in the agenda    

4.       Gambling Venue Policy Review Deliberations Report                                                         6 - 38

Document number R9726


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).






Item 5: Gambling Venue Policy Review Deliberations Report


Planning and Regulatory Committee

6 December 2018




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.    


** 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.


·   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. 



·   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


·    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.


·    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.


·    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.



·    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.


·    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.


·    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


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




Item 5: Gambling Venue Policy Review Deliberations Report: Attachment 1

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Item 5: Gambling Venue Policy Review Deliberations Report: Attachment 2

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