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Retail sector missing out on hundreds of millions of dollars to problematic gambling, report finds

An extra $455 million could have been pumped into the retail sector over 2018 and 2019 if it weren't for Class Four gambling, which includes the use of gaming machines in pubs and clubs, according to new research.

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Hāpai Te Hauora's Jason Alexander says poorer communities are being badly impacted by problem gambling. Source: Breakfast

A recent report by the New Zealand Institute of Economic Research highlights the drain on the retail sector and suggests that increased retail sales would generate about 1127 full-time jobs in the food and beverage services.

Jason Alexander, interim chief executive of Hāpai Te Hauora Tapui/Māori Public Health, says nearly half a billion dollars was lost to community pokie machines last year.

"The wins don't go in there, it's only the losses. And 50 per cent of those losses come from Māori and Pacific," he told TVNZ1's Breakfast.

"Where pokie machines are located, they're mostly in our poorer community areas, communities that can't afford this sort of money to leave."

More money in people's pockets would mean more being spent in the community, Mr Alexander says.

He says the evidence shows that money would otherwise be going to supermarkets, retail stores, or hospitality, rather than other problematic spending.

While some of the money lost to gambling gets funnelled back to support community groups, Mr Alexander is concerned.

"I think the bigger problem is that model is a little bit broken," he says.

"Why are they relying on these at-risk and poorer communities for their funding? They're doing great work for their communities but I'm sure if they had a better alternative that they'd take it. 

"It's literally causing harm to those same communities that they're so concerned about and that they're working so hard to support."

Mr Alexander is calling for that model to be revamped, adding: "We need to really take stock, have a look at the model and say 'this isn't quite right.'"

"Just because we've been doing it this way forever doesn't mean we have to keep doing it. There are alternatives," he says.

The Gaming Machine Association says the report fails to highlight the economic value generated by the sector.

"The report specifically acknowledges that this was outside its scope. It’s therefore a serious misrepresentation of the net value of such a move, given it takes no account of the value that would be lost," acting chair Mike Knell said. 

"In the end, what the Salvation Army and Problem Gambling Foundation are saying, is: let’s take money – and jobs – away from the charity and not for profit sectors – health and rescue, education, community and social support services, environment, and arts and heritage – and give it to the commercial sector. It’s an odd stance for a community organisation like the Salvation Army to take."