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Friday, April 03, 2009

Tory chums in gaming machine corruption acquiescence

Addicted to such a pathetic rush from a mundane random event occurring - a "random" event designed specifically for you to loose over time at - is evidenced as a human characteristic across the globe. It has always struck me as an incredibly tedious way to loose money. The phenomena of gambling machines/slots/pokies or pachinko in parlour settings to attract and retain an addicted clientele is crucial to the model. Gaming machine use is likely to increase as the jobless addicts now find more time - but less money - to pursue their addiction/lifestyle despite the recent bad news for the industry:Note the industry is headed by a former Tory politician (a legal chum of the new Minister, Richard Worth) , and note how they avoid telling us that the revenue they make represents losses from their clientele and that that revenue is about one billion dollars.

The industry can only exist by way of this group of patrons continuing their behaviour - which has been widely viewed as a mental illness and a public health issue. In NZ there are many problems with the industry: the total numbers of machines growing, high denomination bills being accepted by the machines, jackpotting increasing the pay-offs, licensing and so on. I have only two recommendations to reform the gaming machine industry and they all stem from the need to end the corruption that no one seems to want to fully acknowledge:

1. Treat it as a game rather than as gambling. Machines can only take coins - perhaps even only 10 cents (the lowest denomination coin). Feeding endless amounts of coins into machines would at the very least emphasise and slow down the process of their addiction. This move would sort out most of the problems immediately because it takes away the only driver of corruption: large amounts of money. Only rather small and inconvenient amounts of money should be involved.

2. End the corruption inherent - systemically inevitable - in the current system where the pubs choose which charity gets the proceeds of their gaming machines, by making the Community boards - or city/district councils - gaming licensing areas the same way that liquor licensing operates. The Community board/district licensing authority can distribute the money back to groups and initiatives in their own community - not having some dodgy pub owner be in cahoots with the machine operators fronting a "charity" that is paying out wealthy horse racing interests at the other end of the country.

The current system is a recipe for corruption, and for the politicians who have let it continue rampantly (not just the numbers that are now capped I believe, but the system itself built on conflicts of interest) they risk looking corrupt themselves. Winston Peters - for example - was Minister for Racing while having been part of the slush fund circle where his party and his lawyers took money from horse racing interests and gaming charities. The appearance of conflicts are highly problematic.

The SFO fucked up its case against some Auckland pub owners and kick-backs over the helicopter trust - that scandal should have been enough to bring the heat down and a reform of the internal affairs laws and regulations that allow it to exist. It went the other way and the system remains.

Just randomly chosen a Trust listed in the Charity Gaming Assoc - itself fronted by the former Tory politician that lobbies his colleague and legal chum, Internal Affairs Minister Dr Richard Worth let us not forget - and so let's see what interesting outfits amongst others the multi-regional Trillian Trust gave money to last reported year 2008/2009:

Auckland Trotting Club $35,000.00
Cambridge Te Awamutu Harness Racing Club $25,000.00
Eden Park Trust Board $10,000.00
Eden Park Trust Board $28,000.00
Eden Park Trust Board $10,000.00
Eden Park Trust Board $16,000.00

[What the fuck does Eden Park need with these smaller amounts given it is undergoing tens of millions in upgrades c/o Auckland city and the government?]
Kumeu District Trotting Club $8,000.00
Manukau Trotting Club $50,000.00
Thames Harness Racing Club $3,000.00

Gambling money finding its way back to other gambling industries - dodge.

Latest available picture of the Minister:

[UPDATE -- 05/04/2009:

I get the feeling the Police are on to this and if they keep digging will uncover an avalanche of criminal conflicts having read this Stuff piece from a month ago:

Internal Affairs' national manager of investigations, Geoff Owen, confirmed they were investigating racing board employees, Rotorua-based pokie trust First Sovereign and the Waikato Racing Club, and "irregularities in the [racing board] invoicing system". He appealed for the Sunday Star-Times' sources to assist their investigation.

While the latest inquiry focuses on the Waikato, the Star-Times understands Internal Affairs has spent months investigating cases around the country involving senior TAB figures and other racing-friendly pokie trusts.

It is alleged that in some of those cases TAB and pokie trust staff or agents have approached pubs with in-house TABs and offered inducements - including full refurbishments of the premises - if they switch allegiance to the racing-friendly trust. A leading pokie industry source said he witnessed such a conversation involving a senior TAB employee.

Such attempts to influence the flow of pokie money are illegal under the Gambling Act.

Sources familiar with the Waikato investigation say it will focus on grants by First Sovereign to the Waikato Racing Club. It is understood the inquiry will also look at at least one Hamilton pub, which switched to First Sovereign in 2007 and gained a refit of its TAB.


At 3/4/09 7:15 pm, Anonymous Anonymous said...

Let's not forget that the Trillian Trust sponsors one of the richest trotting races in the country - The Trillian Trust Auckland Cup.

When I crunched the numbers for one of the trusts (can't remember which) last year for their 6-monthly report (info now sadly lost), the applications granted to trotting clubs were on average far more likely to be accepted - ie: almost all were accepted compared to around half the total of all applications.

Secondly, the amount granted per application was significantly higher than the average grant overall.

At 3/4/09 7:33 pm, Anonymous Anonymous said...

Actually, I'm pretty sure it was Pub Charity, but I can't really remember exactly all this stuff.

I think it was 70-something% accepted versus 50-something%.

The the grant value was high teens, maybe 17% higher than the average.

(Although Tim, you could do this with http://www.pubcharity.org.nz/Documents/Donations%20List%20Apr%20-%20Oct%202008.pdf should you be so inclined. This may even be the same dataset I used).

At 3/4/09 7:59 pm, Anonymous Anonymous said...

My last comment on the matter:

Looking through that PDF I see that a couple of thoroughbred clubs ('Racing') and greyhound clubs have started receiving money. To my knowledge I've never seen this before over 4 to 5 years of reviewing pokie grants as they appeared in the paper...

A seachange perhaps?

(Also that mustn't have been the data I used. It may have been the same trust from 6 months earlier).

At 3/4/09 8:46 pm, Blogger Tim Selwyn said...

Very interesting Anon, - thank you. I think there is some court action right now over one of these trusts.

At 3/4/09 11:50 pm, Anonymous Anonymous said...

Keep going Tim- this is some of your best work.
This sleazy industry has a parasitic role in nz 2day. The crack cocaine of gambling.

At 4/4/09 10:28 am, Anonymous Anonymous said...

Pachinko, by the letter of the law, is just a game. It is a combination of a slot machine and pinball. A the end of your session, you may end up with a small bucket of pinballs which you can swap for typical fairground prizes (stuffed animals etc).

Exiting the Pachinko parlour, you will find, within 10 metres or so, a separate business that is looking to purchase fairground type prizes for cash. Convenient, but technically not gambling.

At 4/4/09 11:57 am, Anonymous Anonymous said...

Your point 1 suggestion wouldn't work Tim. People addicted to gambling will keep putting money into the slots as long as they have any ... it's not even about how much they win, it's about winning at all.

The only way to 'save' most of the pokie gamblers in NZ is to ban all forms of pub pokies and restrict them to licenced casinos in the major centres. That way people who have become addicted in small towns and communities would have to travel to meet their 'need' and that would save them, their families and the community a lot of heartache and money...



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