DIA —poor job as gambling regulator

The costs of regulation outweigh revenue from fees by $9 million a year.

### NZ Herald Online 5:00 AM Monday Mar 9, 2015
Breaches by pokie operators spark fee increase
By Nicholas Jones
Half of all inspections of pubs and clubs with pokie machines identify breaches or non-compliance with the law. Fees paid by pokie operators are to be increased as levels of fraud and other breaches challenge the Government’s ability to police the sector. Internal Affairs Minister Peter Dunne is overseeing consultation on proposals that will increase fees paid by clubs and pubs with gambling machines by 54 per cent.

DIA, SFO and the Organised Financial Crime Agency NZ scrutinised $30 million in gaming grants made by trusts including Bluegrass. Bluegrass’ licence was cancelled after the DIA ruled its start-up funding was sourced from three racing clubs, rather than from South Canterbury Finance, as claimed.

The past three years have seen an increase in complex investigations into fraud and illegal activity at clubs and societies with pokies. That, and the declining number of pokie machines, has put severe financial pressure on the Department of Internal Affairs (DIA). Gambling enforcement is funded through fees paid by gambling operators.
Read more

Related Posts and Coomments:
2.2.15 Operation Chestnut: DIA, SFO fluffing round the edges #TTCF #ORFU
11.1.15 Southern complainants: IPCA won’t ensure upfront investigation…
14.12.14 DIA regulates what? Not white collar crime, not with govt looking on!
5.8.14 Gambling Commission shuts down racing’s Bluegrass pokie trust
3.2.14 DIA signed up Intralot amid concerns about bribery and corruption
31.12.13 Martin Legge: Operation Chestnut [DIA’s PR exercise]
30.12.13 DIA insights: Pokie rorts, money-go-rounds, names
11.10.13 New Zealand: Pokie trusts same everywhere #pokierorts
10.10.13 Whistleblowers’ message heard ??! #OtagoRacingClub #pokierorts
1.8.13 Politicians keeping DIA/SFO quiet on ORFU and TTCF #pokierorts
31.3.13 DIA and Office of the Auditor General stuff up bigtime #pokierorts
21.2.13 DIA, SFO investigation #pokierorts
11.11.12 Department of Internal Affairs #pokierorts #coverup #TTCF
25.7.12 Martin Legge backgrounds TTCF (pokie trust) and Portage and Waitakere Licensing Trusts #DIA

█ For more, enter the terms *pokies* or *pokie rorts* in the search box at right.

Posted by Elizabeth Kerr


Filed under Business, DIA, Economics, Geography, Media, Name, New Zealand, NZRU, OAG, ORFU, People, Police, Politics, Project management, Property, SFO, Site, Sport

3 responses to “DIA —poor job as gambling regulator

  1. Elizabeth

    As advised last night and this morning:

    “It’s difficult to see how a well-funded Government Regulator can lose control of their industry given the wording “must refuse” in the opening sentences of Section 52 of the Gambling Act 2003, specifically enacted to ensure the DIA put community interests above the financial interests of the gambling industry.

    Not only does this legislation put a clear statutory duty on the DIA to perform this statutory function each and every time they issue or renew an annual gambling licence to trusts and their operators, it puts the onus on the gambling trusts and their pokie operators to prove their honesty and suitability. If they don’t or can’t or are under investigation then why are they licensed or relicensed. How hard can it be for the DIA?

    In a nutshell the DIA are the licensing authority as well as the regulator so the problems start with DIA’s inability to properly investigate licences either before granting a new licence or annually renewing an existing licence. Once the licence is granted the horse has bolted, giving the pokie trust access to all that pokie money which it invariably uses to take on and obstruct the DIA if it dares to delve into the trust’s affairs.

    52 Grounds for granting class 4 operator’s licence
    (1) The Secretary must refuse to grant a class 4 operator’s licence unless the Secretary is satisfied that,-
    (a) the gambling to which the application relates is class 4 gambling; and
    (b) the applicant’s purpose in conducting class 4 gambling is to raise money for authorised purposes; and
    (c) the applicant’s proposed gambling operation is financially viable; and
    (d) the applicant will maximise the net proceeds from the class 4 gambling and minimise the operating costs of that gambling; and
    (e) the net proceeds from the class 4 gambling will be applied to or distributed for authorised purposes; and
    (f) the applicant is able to comply with applicable regulatory requirements; and
    (g) the applicant will minimise the risk of problem gambling; and
    (h) any investigations carried out by the Secretary do not cause the Secretary not to be satisfied about the suitability of the applicant or any key person, in terms of subsection (4); and
    (i) there are no factors that are likely to detract from achieving the purpose of this Act; and
    (j) a key person is not a key person in relation to a class 4 venue licence held, or applied for, by the applicant (except in the case of a class 4 venue licence application, which was not or is not required under section 65(3) or (4) to be accompanied by a class 4 venue agreement).

    (2) In assessing financial viability under subsection (1)(c), the Secretary must consider, among other things, the ability of the applicant to reward winners and pay levies, taxes, and other costs, as well as apply or distribute the net proceeds from the class 4 gambling to or for authorised purposes.

    (3) The Secretary may refuse to grant a class 4 operator’s licence if an applicant fails to provide the information requested by the Secretary in accordance with section 51.

    (4) In determining whether an applicant is suitable for a class 4 operator’s licence, the Secretary may investigate and take into account the following things:
    (a) whether the applicant or a key person has, within the last 7 years,-
    (i) been convicted of a relevant offence:
    (ii) held, or been a key person in relation to a class 3 or class 4 operator’s licence, a class 4 venue licence, a casino licence, or a licensed promoter’s licence under this Act or any licence under previous gaming Acts that has been cancelled, suspended, or for which an application for renewal has been refused:
    (iii) been placed in receivership, gone into liquidation, or been adjudged bankrupt:
    (iv) been a director of a company that has been placed in receivership or put into liquidation, and been involved in the events leading to the company being placed in receivership or put into liquidation:
    (v) been prohibited or disqualified from acting as a director or promoter of, or in any way, whether directly or indirectly, being concerned or taking part in the management of, a company under section 382, 383, or 385 of the Companies Act 1993:
    (vi) been prohibited from acting as a director or directly or indirectly being concerned, or taking part, in the management of a company under section 299 of the Insolvency Act 2006; and
    (b) the financial position and credit history of the applicant and each key person; and
    (c) the profile of past compliance by the applicant and each key person with-
    (i) this Act, minimum standards, game rules, Gazette notices, and licence conditions; and
    (ii) the Racing Act 2003 or the Racing Act 1971 (and any rules of racing made under either of those Acts); and
    (iii) previous gaming Acts, and regulations made under previous gaming Acts; and
    (iv) a licence or a site approval issued under a previous gaming Act.

    (5) The Secretary may take into account matters of a similar nature to those listed in subsection (4) that occurred outside New Zealand.

    (6) If the Secretary decides to refuse to grant a class 4 operator’s licence, the Secretary must notify the applicant of-
    (a) the reason for the decision; and
    (b) the right to appeal the decision; and
    (c) the process to be followed for an appeal under section 61.

    Section 52(1)(g): amended, on 3 March 2015, by section 28(1) of the Gambling Amendment Act 2015 (2015 No 3).
    Section 52(1)(j): amended, on 3 March 2015, by section 28(2) of the Gambling Amendment Act 2015 (2015 No 3).
    Section 52(4)(a): amended, on 3 March 2015, by section 28(3) of the Gambling Amendment Act 2015 (2015 No 3).
    Section 52(4)(a)(iii): amended, on 3 March 2015, by section 28(4) of the Gambling Amendment Act 2015 (2015 No 3).
    Section 52(4)(a)(iv): inserted, on 3 March 2015, by section 28(4) of the Gambling Amendment Act 2015 (2015 No 3).
    Section 52(4)(a)(v): inserted, on 3 March 2015, by section 28(4) of the Gambling Amendment Act 2015 (2015 No 3).
    Section 52(4)(a)(vi): inserted, on 3 March 2015, by section 28(4) of the Gambling Amendment Act 2015 (2015 No 3).
    Section 52(4)(b): replaced, on 3 March 2015, by section 28(5) of the Gambling Amendment Act 2015 (2015 No 3).”

  2. Hype O'Thermia

    Dictionaries change all the time. OED now defines “must” as “may, yeah-nah, flip-flop, whatever” and “refuse” as “rubbish, condone, turn a blind eye to, take an attitude that everyone’s reality is different and that is okay, persecute, reward, compensate for alleged losses”.

  3. Elizabeth

    ### NZ Herald Online 5:40 PM Wednesday Feb 3, 2016
    Kiwis spending more on pokies
    By Simon Collins
    New Zealanders are spending more again on the pokies but spending per person is static, despite better economic times. The Internal Affairs Department says spending on gaming machines in pubs and clubs (excluding casinos) rose by 2 per cent in 2015, from $811.4 million in 2014 to $828.1 million. That was exactly in line with a 2 per cent increase in the country’s population in the year to last September, the latest figure available, indicating that spending per person was unchanged. However, even that was a change from a long-term downward trend in pokie spending since gambling laws were tightened and local councils were allowed to impose “sinking lids” on pokie machine numbers in 2004. Since then, pokie machines outside casinos have shrunk by a third from 25,221 to 16,393, and pokie spending outside casinos has dropped by a fifth from $1.04 billion to $828 million.
    Read more

    DIA Statistics —Gaming Machine Venues, Numbers and Expenditure by Territorial Authority/District

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