Gambling on Pokies Costing New Zealand Retail Sector over $400 million

Chistopher Abela

Posted On:   AUG - 10 - 2020

Reading Time: 3 minutes

As per the latest New Zealand Institute of Economic Research (NZIER) report commissioned by the Problem Gambling Foundation and Salvation Army, increased gambling is having a significant drain on other sectors of the economy.

According to the report, if household expenditure gets diverted away from pokies and table games then the retail would receive an immediate boost of $445 million.

Problem Gambling Foundation CEO, Paula Snowden confirmed the findings of the report and reiterated the effect that pokies have on other facets of society.

“With the retail and hospitality sector still hurting from the COVID-19 lockdown, it is time to acknowledge that Class 4 gambling not only has a significant social cost, but it is also a drain on the wider economy,” she says.

If the funds were to be diverted from casino games to retail, then the increased sales would create an additional 1,127 full-time equivalent jobs for 1,724 workers. These jobs would generate salaries worth $50 million and would include the food and beverage services, specialised food retailing, supermarkets and grocery stores.

If the money was diverted to retail than additional GST revenue will be generated to the tune of $58.01 million. There will also be income tax collected from additional retail sector workers which will add a further $7 million to $8 million!

Ms Snowden added “With losses on pokie machines trending upwards year by year, this report shows how the economy could benefit from diverting those gambling losses into spending elsewhere in local communities,”

Ms Snowden also said “It is encouraging that if gambling losses were diverted into the retail and service industries, there would be more employment, more tax and more business revenue available to sponsor and support community interests and community sport,” she says.

National Director of The Salvation Army Addiction Services, Lynette Hutson said communities are struggling to deal with issues related to problem gambling.

“Communities and community sport are desperate for funding yet rely on grants from a mere 40 percent of the $939 million lost on pokies in pubs, clubs and TABs in 2019.

“If those total losses were spent in local economies, business could directly support their own community interests without the heavy toll being borne by the most deprived communities in New Zealand,” Ms Hutson says.

Interim CEO, Hāpai Te Hauora Tapui, Jason Alexander was quick to highlight another concern. As per the latest report, the Māori are effected disproportionately by gambling because 50 percent of the slot machines are located in areas where they live.

“We see the effect of gambling on whānau and children, yet we are using money from pokie machines to fund communities, with 60 percent of it going towards the cost of running the system. Māori have no control on the density of these machines in their communities yet experience 2.5 times the rate of gambling harm,” he says.