The popular poker machines hosted in bars and hotels across New Zealand have not been operational for several weeks as authorities ordered the closing of thousands of businesses to curb the current coronavirus epidemic.
Along with the direct impact on the economy, however, the measures may negatively affect the local communities in a surprising way. Contributions from gambling have stopped and charities and communities across the country are expected to lose millions of dollars.
Every year, gaming societies provide more than $300 million in funding for New Zealand’s communities. The public gambling sector is expected and required by law to return a portion of profits to the community. Slot machines, commonly known as “pokies”, which account for most of the gambling in the country, are operated by charities and foundations, known as gaming machine societies. They make grants to non-profit community organisations.
According to a 2018 report published by Philanthropy New Zealand, there were $3.8 billion in donations for that year. Gaming societies contributed $341 million mostly to sports organizations and community groups. Currently, there are more than 30 societies distributing funding to over 10,000 non-profit organizations and small charities in the country. Many of them have been struggling during the COVID-19 crisis, unable to find the funding they need.
As a result, some non-profits had to reduce staff, although most of them try not to close down altogether. South Auckland’s Rising Foundation, which works with local children and young adults, says it needs funding of around $1 million a year to deliver its services – most of the money is used for salaries. New Zealand is currently home to nearly 27,000 charities that employ 130,000 full-time workers.
Societies Give Back to Communities More than Any Other Form of Gambling
In New Zealand, all pokies in pubs, restaurants and hotels are owned and operated by charitable gaming or community gaming trusts, which publish detailed reports on how much they contribute to local communities through various charities and nonprofits. They are required by law to distribute 40% of their revenue to community groups, bringing $300 million every year.
In addition, these trusts, which provide Class 4 Gambling, pay different taxes and levies. Among them is the annual payment of around $15 million to the Ministry of Health, whose purpose is to fund the government’s problem gambling strategy. In total, gaming societies pay more than $200 million in taxes to local and state authorities annually. In contrast, commercial casinos return less than 2% of their revenue to community groups.
Despite the dire situation these trusts are currently in, some of them continue contributing. Funders keep giving money but due to the unusual circumstances as a result of the coronavirus crisis, they have found themselves giving for different things. As Philanthropy New Zealand chief executive Sue McCabe explains, some funds have been allocated for buying technology and electronics for community groups since many people are now being forced to work from home.
- Author
Daniel Williams
