Conduct Unbecoming a Nation and Its People

Gambling: Official Money Laundering at Its Best

Successive New Zealand governments have protected, promoted, subsidised and owned nationwide gambling “businesses”. To this day, the government owns (and makes money from) Lotto, the nationwide weekly lottery, which has outlets in every retail centre and many corner dairies in the country. Feel bemused?

The government also takes money from its citizens via tax and subsidies and supports specially favoured gambling “industries” such as horse racing. We even have a Minister of the Crown for Racing—the Honourable Winston Peters, who recently announced the government was committing $9 million to boost horse racing prize money in New Zealand. Feel proud?

The government has also acknowledged something called “problem gambling”. The Ministry of Health is now responsible for preventing and minimising “gambling harm”. Apparently some people can become addicted to gambling and consequently ruin their own lives and those of their dependents. Feel confused?

Whilst recent data are hard to come by (probably for good reason) one Auckland University academic claimed in a paper written in 2001 that the total gambling turnover per year in New Zealand was equal to the annual total government spend on health. In that same year, one of the government's (no doubt highly paid) analysts was reporting on a nationwide survey recently conducted by the government on gambling and sonorously informed us that only 41% of New Zealand adults over eighteen gamble more than once per week. Feel relieved?

In that same year, $1.7bn was reported to be “lost”, skimmed off by official and unofficial bookies. That amounts to around $400 being skimmed off every man woman and child in New Zealand. Naturally “every man, woman and child” in the country does not gamble. But if we spread that “take” over the 40% that gamble once per week or more, it would amount to approximately $1,000 being skimmed off every regular gambler a year. Feel angry?

So, those that gamble regularly are playing a fools game. It is their own folly; they deserve it. Part of the ethic of a free society is that people need to take responsibility for their actions, and bear the consequences. But is it appropriate that the government should be part of this vast scam? Is it appropriate that the tax payer should be having to support and promote gambling?

We do not believe so. We propose two direct changes. Firstly, the government must get out of all forms of the gambling “business” and all subsidies (direct and indirect) to the “industry”. It is far more inappropriate for the government to own a gambling “business” than it would be for it to own a brewery--which it never has. It is a throwback to a more primitive and ignorant era, and it needs to be stopped immediately.

Secondly, the government must mandate a disclosure regime for gambling similar to that which operates in virtually all other forms of financial transactions in the country. This regime must require that all gambling businesses and institutions fully disclose the fees, costs and charges that hit the average dollar of the average punter in any particular offering. So, for example, on all pokie machines there needs to be a notice of disclosure—large type, up front—that informs the consumer of the hidden costs he is likely to end up paying by playing on that particular machine, and that the more the “customer” gambles the higher the likelihood that he will end up paying those or higher costs.

In addition, disclosure must be made of the average percentage return on the average dollar gambled (which will be negative) and a statement to the effect that the more you gamble, the more you will experience that negative return.

Large type, up front, for every form of gambling. Then the “consumer” will be more informed. When consumers are informed responsibly of the true financial costs of gambling we believe the “industry” will shrink and wither. And that would not be a bad outcome.

And it will be gratifying to know that we no longer have to put up with funding a Minister (and Ministry) of Racing.