Press releases

PR: Pokie gambling costing retail sector over $400 million a year

10 August 2020
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A recent New Zealand Institute of Economic Research (NZIER) report commissioned by The Salvation Army and the Problem Gambling Foundation estimates that if household expenditure on Class 4 pokie gambling was diverted to other uses, the retail sector could have gained an estimated $445 million in 2018/19.

Paula Snowden, Problem Gambling Foundation CEO, says the report highlights the surprising extent of the drain on the retail sector from gambling on pokies in pubs, clubs and TABs.

“With the retail and hospitality sector still hurting from the COVID-19 lockdown, it is time to acknowledge that Class 4 gambling not only has a significant social cost, but it is also a drain on the wider economy,” she says.

NZIER analysis suggests that the increased retail sales would generate an additional 1,127 full-time equivalent jobs for 1,724 workers, worth approximately $50 million in wages and salaries. These jobs would be in the food and beverage services, specialised food retailing, supermarkets and grocery stores.

“With losses on pokie machines trending upwards year by year, this report shows how the economy could benefit from diverting those gambling losses into spending elsewhere in local communities,” Ms Snowden says.

Lynette Hutson, National Director, The Salvation Army Addiction Services, says community groups are struggling with the ethics of being forced to rely on pokie money.

“Communities and community sport are desperate for funding yet rely on grants from a mere 40 percent of the $939 million lost on pokies in pubs, clubs and TABs in 2019.

“If those total losses were spent in local economies, business could directly support their own community interests without the heavy toll being borne by the most deprived communities in New Zealand,” Ms Hutson says.

Jason Alexander, Interim CEO, Hāpai Te Hauora Tapui, says Māori are disproportionately impacted by gambling because 50 percent of the pokie machines are located in areas where Maori and Pasifika people live.

“We see the effect of gambling on whānau and children, yet we are using money from pokie machines to fund communities, with 60 percent of it going towards the cost of running the system. Māori have no control on the density of these machines in their communities yet experience 2.5 times the rate of gambling harm,” he says.

The report suggests that additional GST revenue is estimated to be $58.01 million and income tax collected from additional retail sector workers is expected to be between $7 million and $7.6 million.

Paula Snowden says as a nation we need to start thinking about where the gambling losses that support our good causes are actually coming from.

“It is encouraging that if gambling losses were diverted into the retail and service industries, there would be more employment, more tax and more business revenue available to sponsor and support community interests and community sport,” she says.

Editor’s notes: The report is to the Problem Gambling Foundation, not Association, as stated on the cover of the NZIER report.