Pokie Reforms Not Good Enough

Today we called on the NSW Government to consider the harmful effects that the pokies industry has on our communities. 


Ms JENNY LEONG ( Newtown ) ( 11:07 :26 ): I speak on behalf of The Greens on the Public Lotteries Amendment (Keno Licensing) Bill 2016. Although The Greens do not oppose the bill, I wish to raise significant concerns we have about some aspects of it and put a number of questions to the Minister in the hope that they will be responded to in his address in reply. The Public Lotteries Amendment (Keno Licensing) Bill will implement the final commitments made under the 2010 memorandum of understanding between the Liberal Party, The Nationals and ClubsNSW. The memorandum was signed in the lead-up to the 2011 State election in which Barry O'Farrell became Premier. The memorandum of understanding about the commitment to keno read:

A NSW Liberals and National government will take the following action:

Commit to reviewing and further extending the existing license arrangements for keno, providing certainty in relation to regulatory and approval processes and facilitating the introduction of new technology and games.

This bill delivers on that agreement. The Greens wish to place on record that the relationship between ClubsNSW and the gaming and liquor policy in New South Wales is cause for concern. Examples of this include that in 2014 there was intense lobbying by ClubsNSW and its stakeholders with New South Wales Government Ministers. They met seven times in three months before striking the deal for the 2015 election but no advice was sought from the liquor regulator.

In 2014 a new memorandum of understanding [MOU] was signed. The new MOU opened the door to giving licensed clubs tax breaks on poker machine profits in exchange for their provision of childcare and aged care services. The concerns that The Greens have with this bill extends beyond the nature of the agreement and the Baird Government's relationships with ClubsNSW. The Greens also have concerns around the details of the steering committee and the contract negotiations. In his second reading speech the Deputy Premier stated that following the signing of the MOU with ClubsNSW an independent review of the keno license was conducted on behalf of the Government. The review found that there were significant opportunities to modernise the keno regulatory regime.

Following this review, the Government entered into negotiations with the licensees to reach a new agreement. The negotiations were conducted at arm's length from the Government by a steering committee consisting of senior representatives from NSW Treasury, the Department of Premier and Cabinet and Liquor and Gaming NSW. However, neither the independent review nor the operations of the steering committee appear to be available in the public domain. It is difficult to consider the changes outlined in the bill without knowing the details of the review or the factors taken into consideration by the steering committee. It would be appreciated if, in his speech in reply, the Minister could provide details of both the review and the deliberations of the steering committee, and let us know whether such information will be made publicly available so that an assessment of that review and the steering committee negotiations can be assessed and considered.

The liabilities on the New South Wales Government contained in the contract are also cause for concern. The contract between Tabcorp and ClubsNSW regarding a new licensing agreement for keno makes the New South Wales Government liable to pay compensation to licensees in the event that an adverse regulatory event occurs while the contract is in operation. An adverse regulatory event includes changes to taxation arrangements, including a new relevant tax; increases to a relevant tax; or changes to the manner of calculating a relevant tax payable by the licensees. In effect, this means that if, at any time between now and 2050, the Government of the day decides that it wants to change the taxation arrangements in relation to public lotteries in a way that would be detrimental to the licensees the Government will have the compensate Tabcorp and ClubsNSW for doing so.

I will make that clear. If, at any time between now 2050, any regulatory event is determined to have an adverse effect on licensees then the New South Wales Government would have to compensate Tabcorp and ClubsNSW for making those changes. The amount payable is determined by taking into account factors including the number of years remaining on the contract. This seems to be included for the benefit of Tabcorp and ClubsNSW and not the people of New South Wales. Considering that the contract will not expire for another 24  years, this is an extraordinarily long amount of time for the New South Wales Government to leave the current tax arrangements in place and unchanged.

The other factor that should be put on the record when we are discussing the relationship between this Government and ClubsNSW with respect to keno and other gambling is the impact that problem gambling has on our community. The basis of this legislation is to provide ClubsNSW and Tabcorp with the certainty needed to invest in and promote keno as a form of gambling. The benefits to the people of New South Wales, even taking into account the licensing fees payable, are minimal. The Minister argues that the reform is necessary to help secure the financial viability of clubs in New South Wales. However, this logic is based on the false premise that ClubsNSW is solely a social good in this State. While it has been recognised by other members who have made contributions to this debate that ClubsNSW does contribute to the social good in our community, it must be recognised that there are serious impacts on the community as a result of poker machines and other gambling that occurs within ClubsNSW venues.

Clubs in New South Wales are heavily reliant on revenue from poker machines, and this has had appalling consequences on families and communities across the State. The New South Wales Government continues to overstate the positive impacts of ClubsNSW on local communities and downplays the damages clubs inflict through their reliance on revenue from poker machines. The extension of the keno licensing arrangements for Tabcorp and ClubsNSW will not help this situation, and acts as a perverse endorsement of ClubsNSW and a failed business model that relies on people and their problematic gambling addictions.

To discover the possible reasons for the Government repeatedly bowing to ClubsNSW we must examine the history of political donations and the over-reliance on gambling revenue that has connected ClubsNSW with successive governments in New South Wales. According to the most recent State budget, in 2015-16 the Government expects to receive over $2.2 billion in revenue from gambling and betting taxes. This represents approximately 8 per cent of all taxation revenue. A significant amount of this is expected to come from lotteries and lotto, which includes keno.

While The Greens wholeheartedly agree that if gambling is to take place it should be taxed accordingly, it is obviously important to consider—because it is of serious concern—that governments have begun to rely on taxes on this form of income as revenue. That can have an impact on good public policy designed to reduce the harms associated with problem gambling in our community. For that reason The Greens ask the Minister to respond to the questions we have asked about the independent review. The Greens also raise ongoing concerns about the relationships between the New South Wales Liberal Party, the New South Wales Nationals and ClubsNSW, and the reliance on problem gambling. The Greens have concerns about the impact of problem gambling on individual families and on communities that are dealing with the issues of problem gambling. The Greens are concerned about the influences on the way that public policy and legislation is made in this State.


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