In New Zealand, gaming machines are a popular form of gambling entertainment that can be found in many bars, clubs, and casinos throughout the country. However, a few people know who owns these machines and how they are regulated.
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Gaming machines, also known as pokies or slot machines, are owned by a combination of private companies and charitable trusts, which are licensed by the government.
This ownership and operation of gaming machines in New Zealand are regulated by the Department of Internal Affairs, which oversees the licensing and monitoring of all gaming activity to ensure compliance with laws and regulations.
In this blog post, we’ll take a closer look at who owns gaming machines in New Zealand, how they operate, and the government’s role in regulating this industry.
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Who Owns The Gaming Machines In New Zealand
Ownership Is Divided Among Private Companies, Charitable Trusts and By Individuals:
1. Private Companies
In New Zealand, private companies are permitted to own and operate gaming machines in licensed venues, such as bars and casinos. The ownership of gaming machines in New Zealand is heavily concentrated among a few large companies. According to the Department of Internal Affairs, as of March 2021, there were 15 operators of gaming machines in the country, with the largest operator accounting for 39% of all machines.
Examples of the most influential private companies
Some of the largest and most influential private companies that own gaming machines in New Zealand include SkyCity Entertainment Group, New Zealand’s largest casino operator, and Trusts Community Foundation, one of the largest charitable gaming trusts in the country. Other significant operators include the Lion Foundation, the Southern Trust, and the Pub Charity.
Popular gaming machine brands
In terms of popular gaming machine brands, some of the most well-known include Aristocrat, IGT, and Ainsworth Game Technology. These companies produce a wide range of games, including classic fruit machines and more modern video pokies with advanced features and bonuses.
While private ownership of gaming machines has its advantages, such as providing entertainment and generating revenue for both operators and venues, it also has its critics who argue that it can lead to problem gambling and other negative social consequences. As such, the government regulates the industry through licensing and monitoring requirements to ensure that operators follow responsible gambling practices and comply with all relevant laws and regulations.
2. Charitable Trusts
Charitable trusts are another major owner of gaming machines in New Zealand. These trusts are typically set up to raise funds for charitable causes such as healthcare, education, and community development. In order to operate gaming machines, these trusts must obtain licenses from the Department of Internal Affairs and comply with regulatory requirements such as maintaining accurate records and submitting financial reports.
Here are some examples of major trusts in New Zealand and their contributions to charitable causes:
1. The Lion Foundation
This trust is one of the largest contributors to charitable causes in New Zealand, having donated over $850 million since it was established in 1986. The trust supports a range of community organizations and initiatives, including sporting groups, cultural organizations, and health and social services.
2. The Trusts Community Foundation
This foundation is another major contributor to charitable causes in New Zealand, having donated over $500 million since it was established in 1994. The foundation supports a wide range of community organizations and programs, including education and training, health and social services, and arts and culture.
3. The New Zealand Community Trust
This trust is one of the largest charitable trusts in New Zealand, having donated over $350 million to community causes since it was established in 1991. The trust supports a range of organizations and programs, including education, health and welfare, and sports and recreation.
4. Pub Charity
This trust has donated over $120 million to charitable causes in New Zealand since it was established in 1987. The trust supports a wide range of community organizations and initiatives, including health and social services, education, and sporting groups.
5. Four Winds Foundation
This trust supports a range of charitable causes in New Zealand, with a particular focus on community development and environmental conservation. The trust has donated over $100 million to charitable causes since it was established in 2008.
Overall, these trusts and many others like them play a vital role in supporting community-focused initiatives and programs across New Zealand, and their contributions are highly valued by the communities they serve.
Despite the positive impact of charitable trusts, the ownership of gaming machines by these organizations has also been subject to criticism. Some argue that the reliance on gambling revenue can create a conflict of interest for these organizations and that the profits derived from gambling may have negative social and economic consequences.
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3. Ownership By Individuals:
In addition to casinos, clubs, and independent operators, there is a notable presence of individual ownership of gaming machines in New Zealand. Some individuals may choose to invest in and operate gaming machines as a business venture, while others may have acquired them for personal entertainment purposes. Let’s take a closer look at the personal ownership of gaming machines and the regulations surrounding it.
Personal Ownership of Gaming Machines:
Individuals who own gaming machines often do so for various reasons. Some may have a passion for gaming and want to create a private gaming space in their homes. Others may see it as an investment opportunity, hoping to generate revenue by placing their machines in suitable venues with proper agreements.
Personal ownership of gaming machines allows individuals to have more control over their gaming experience. They can customize the machines, set specific payout rates, and choose the games available, tailoring the gaming environment to their preferences.
Licensing and Regulations for Individual Ownership:
While personal ownership of gaming machines is allowed in New Zealand, it is subject to strict licensing and regulations to ensure responsible gambling practices and prevent any illicit activities. Individuals who wish to own and operate gaming machines must adhere to the following guidelines:
- Licensing: Individual owners must obtain a license from the New Zealand Gambling Commission to legally own and operate gaming machines. The licensing process involves thorough background checks to ensure the applicant has no criminal record or history of irresponsible gambling practices.
- Location Restrictions: The Gambling Act of 2003 sets specific guidelines regarding the placement of gaming machines owned by individuals. These machines cannot be operated in certain areas, such as schools, places of worship, or near addiction treatment centers, to protect vulnerable populations from potential harm.
- Responsible Gambling Measures: Individual owners are required to implement responsible gambling measures, such as displaying responsible gambling messages and contact information for gambling helplines near the gaming machines. They should also monitor players for signs of problem gambling and intervene when necessary.
- Taxation: Individuals who own gaming machines are subject to taxation on their gambling profits. The taxation system ensures that the government receives its share of the revenue generated from gambling activities.
- Compliance Checks: The New Zealand Gambling Commission conducts regular compliance checks on gaming machine operators, including individuals, to ensure that they are operating within the legal framework and adhering to responsible gambling practices.
Revenue Generated By Gaming Machines In NZ
In 2022, New Zealanders spent a net amount of $528 million on gaming machines. This revenue is generated by the following:
- The amount of money wagered on gaming machines. This is the total amount of money that is inserted into gaming machines, minus the amount of money that is won back by gamblers.
- The hold percentage. This is the percentage of the money wagered that is kept by the gaming machine operator as profit. The hold percentage for gaming machines in New Zealand is typically around 20%.
Taxation and levies on gaming machine revenue
There are two main types of taxation and levies on gaming machine revenue in New Zealand:
- Casino levies and taxation. Casinos in New Zealand are subject to a number of levies and taxes, including a 15% gross gaming revenue (GGR) levy, a 10% tax on net gaming revenue, and a 15% tax on gaming machine profits.
- Taxes on non-casino gaming machine operators. Non-casino gaming machine operators in New Zealand are subject to a 20% tax on gaming machine profits.
Casino levies and taxation
The casino levies and taxation in New Zealand are designed to generate revenue for the government and to help to regulate the casino industry. The GGR levy is calculated on the total amount of money wagered on gaming machines in casinos, while the net gaming revenue tax is calculated on the amount of money that is won by gamblers minus the amount of money that is paid out in winnings. The 15% tax on gaming machine profits is designed to ensure that casino operators do not profit excessively from the operation of gaming machines.
Taxes on non-casino gaming machine operators
The taxes on non-casino gaming machine operators in New Zealand are designed to generate revenue for the government and to help to regulate the gaming machine industry. The 20% tax on gaming machine profits is calculated on the amount of money that is won by gamblers minus the amount of money that is paid out in winnings. This tax is designed to ensure that gaming machine operators do not profit excessively from the operation of gaming machines.
Licensing and Regulatory Requirements
All entities that wish to operate gaming machines in New Zealand must hold a license from the Department of Internal Affairs.
Licenses are granted for a period of up to six years and must be renewed upon expiration.
To obtain a license, private companies and charitable trusts must undergo rigorous background checks to ensure they are reputable and financially stable.
Companies and trusts must adhere to strict licensing and regulatory requirements set by the government, which include:
- Ensuring that gaming machines are operated fairly and responsibly.
- Conduct regular audits and report to the Department of Internal Affairs on the operation of gaming machines.
- Complying with all relevant laws and regulations related to gambling in New Zealand.
- Charitable trusts are required to use at least 40% of the net proceeds from gaming machines for charitable purposes, which includes a wide range of community-focused initiatives and programs.
The government has established the Gambling Commission to oversee the regulation of gambling in New Zealand, including the operation of gaming machines. The commission has broad powers to investigate and enforce compliance with licensing and regulatory requirements.
Government Regulation of Gaming Machines
Role of the Department of Internal Affairs in regulating gaming machines
The Department of Internal Affairs (DIA) in New Zealand is responsible for regulating gaming machines. The department has a range of responsibilities, including the licensing and monitoring of gaming machine operators, ensuring compliance with regulations, and enforcing penalties for breaches of the law.
To operate gaming machines in New Zealand, operators must obtain a license from the DIA. The licensing process involves a thorough background check on the applicant, including their financial history, criminal record, and suitability to operate a gaming machine.
The DIA also monitors the operations of licensed gaming machine operators to ensure they are complying with regulations, including the amount of money that is being distributed to charitable causes, the maximum amount that can be wagered, and the maximum prize payout.
The department also enforces penalties for breaches of the law, including fines and imprisonment for serious offences. The DIA has the power to cancel licenses or take legal action against operators who do not comply with the regulations.
Overall, the DIA plays a crucial role in ensuring that gaming machines in New Zealand are operated responsibly and transparently, with a focus on minimizing harm to individuals and communities. By enforcing strict regulations, the department aims to prevent gambling-related harm and protect vulnerable individuals from the negative effects of gambling.
Licensing and Monitoring Requirements
To operate gaming machines in New Zealand, operators must obtain a license from the Department of Internal Affairs (DIA) under the Gambling Act 2003. The licensing process involves a thorough background check on the applicant, including their financial history, criminal record, and suitability to operate a gaming machine.
The DIA monitors the operations of licensed gaming machine operators to ensure they comply with regulations, including the amount of money being distributed to charitable causes, the maximum amount that can be wagered, and the maximum prize payout.
In addition, gaming machine operators are required to keep accurate records and submit regular reports to the DIA, including information on the amount of money wagered and won, the number of players, and the amount of money donated to charitable causes.
The DIA has the power to conduct inspections and audits of gaming machine operations at any time to ensure compliance with regulations. Operators who do not comply with licensing and monitoring requirements may face penalties, including fines, license suspension or cancellation, or legal action.
Overall, licensing and monitoring requirements for gaming machines in New Zealand are designed to ensure that operators act responsibly and transparently and that proceeds from gambling are distributed to charitable causes. The regulations are also in place to minimize gambling-related harm and protect vulnerable individuals from the negative effects of gambling.
Laws and regulations governing gaming machines in New Zealand
In New Zealand, the operation of gaming machines is regulated by the Gambling Act 2003 and the associated regulations. The Act provides a framework for the conduct and regulation of gambling, including the operation of gaming machines.
Under the Act, the Department of Internal Affairs is responsible for regulating gaming machines in New Zealand. This includes issuing licenses for gaming machine operators and venues and monitoring compliance with the Act and regulations.
The Act also sets out specific rules for the operation of gaming machines, including requirements for the maximum amount that can be wagered and the maximum payout. It also specifies the types of venues where gaming machines can be operated, such as casinos, pubs, and clubs.
In addition, the Act sets out provisions for problem gambling, including requirements for gaming machine operators to provide information about problem gambling and to offer self-exclusion programs. The Department of Internal Affairs also operates a national gambling helpline to provide support and information to those affected by problem gambling.
Overall, the laws and regulations governing gaming machines in New Zealand aim to balance the benefits of gambling with the need to protect vulnerable individuals and ensure the integrity of the gambling industry.
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Implications and Criticisms
Pros and cons of gaming machines in New Zealand
Pros:
Revenue generation: Gaming machines generate significant revenue for the government, private companies, and charitable trusts.
Employment: The gaming industry provides jobs for a significant number of people in New Zealand.
Entertainment: Gaming machines provide entertainment for many people in New Zealand who enjoy playing them.
Tourism: The presence of gaming machines in New Zealand can attract tourists who enjoy gaming activities.
Cons:
Addiction: Gaming machines can be addictive and can cause financial and psychological harm to individuals and families.
Social cost: Problem gambling can lead to social problems such as crime, poverty, and mental health issues.
Unequal distribution of revenue: The distribution of revenue generated by gaming machines is not always evenly distributed, leading to concerns about equity.
Negative perception: Some people view gaming machines as a negative influence on society and believe they should be banned or heavily restricted.
It’s important to note that the debate around gaming machines in New Zealand is complex and ongoing, with many stakeholders and perspectives involved.
Criticisms of the Industry and its Effects on Society
The gaming machine industry in New Zealand has long been a topic of controversy and criticism. Some of the main criticisms of the industry include:
Harmful Effects on Society: Critics argue that gaming machines have a negative impact on society, particularly on low-income communities. They point to research that suggests that problem gambling rates are higher in areas with more gaming machines.
Addiction and Financial Harm: Another criticism is that gaming machines can be highly addictive, leading to financial harm for individuals and their families.
Limited Contributions to Charity: While charitable trusts own a significant portion of the gaming machines in New Zealand, some critics argue that the contributions made to charity are not enough to offset the social costs associated with the industry.
Lack of Transparency: Some critics argue that the industry lacks transparency and that it can be difficult to monitor the behaviour of gaming machine operators.
Overall, while the gaming machine industry has its supporters, it also faces significant criticism from those who believe it has a negative impact on society. As a result, the industry is closely regulated by the New Zealand government.
How the government and industry are responding to these criticisms
The government and industry have responded to criticisms of the gaming machine industry in various ways. One approach is to improve regulatory measures to prevent problem gambling and promote responsible gambling practices. The Department of Internal Affairs has introduced a number of measures, such as mandatory host responsibility training for all gaming machine operators and staff, as well as a voluntary self-exclusion program for players.
Additionally, the industry has also taken steps to address criticisms by implementing voluntary codes of conduct and responsible gambling policies. This includes offering help and support to individuals experiencing gambling problems, and investing in research and education programs to promote responsible gambling.
Despite these efforts, some critics argue that more needs to be done to address the negative social impacts of gaming machines. Some have called for a reduction in the number of machines, tighter restrictions on advertising, and more significant support for problem gamblers and their families. Overall, the issue remains a contentious one, with the ongoing debate about the role of gaming machines in New Zealand society.
Synopsis
As discussed, the ownership of gaming machines in New Zealand is divided between private companies and charitable trusts. The government heavily regulates the industry through the Department of Internal Affairs, with strict licensing and monitoring requirements in place.
While the industry has contributed significantly to charitable causes in the country, there are criticisms regarding its impact on society. Concerns include addiction, crime, and financial hardship among vulnerable communities.
The government and industry are responding to these criticisms by implementing harm reduction measures such as self-exclusion programs and providing resources for problem gambling. However, there is still ongoing debate and discussion on how to balance the economic benefits of the industry with the potential social costs.
In conclusion, the ownership and regulation of gaming machines in New Zealand are complex issues that involve multiple stakeholders and competing interests. It is essential for the government, industry, and society to continue engaging in constructive dialogue to ensure that the industry is operating responsibly and contributing positively to the country’s social and economic development.
