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Some musings on things

Did you get your share?

1/2/2017

1 Comment

 
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I was trying to convince someone that they needed to spend some money with me to look at funding in their region, so thought I’d have a wee look at the gaming trust spend in their area.  Class 4 gaming trusts operate in New Zealand under prescriptive legislation. You may recall that Canterbury’s Community Funding (i.e., money that goes to community groups from all sources of grants) is about 52% from gaming trusts, Otago’s 29%, so I reckon they are not something to be sneezed at if you are wanting to understand the whole funding ecosystem.

Then I thought it would be interesting to look at this for the country. 

Below is from the DIA website added up for the year, and then summarised by my take on province.  I took the quarterly figures, added them together, and multiplied by .4, which is the minimum return that gaming trusts provide to their communities.  Of course some trusts over stretch this and provide more to community groups.  These figures show pokie income by region.

There are a couple of things I found quite interesting. 

The total dollars available for the country is over $340m. This compares to Lotteries 2016 spend of $182m, the Combined Community Trusts (the regional trusts which came out of TrustBank) of $105m.  The other big player will be local bodies, but the data there is simply too difficult to find.  However, the conclusion does not change: the gaming trusts are big in terms of returns to community.

The second thing is looking at the hypothetical contribution back into the communities which generated it.   The above chart shows income.  Where its spent is another story.  Earlier I have looked at the dollars that came into Otago in 2015.  This showed that in 2015 Otago gaming trusts put around $6.5m INTO the community.  Yet in 2016 they took $10.7m OUT of the community.  Canterbury figures are a bit more balanced, which (I suspect) is driven by earthquake spend.  Of course, gaming trusts do spend with national groups as well, which presumably has benefits to the communities the money came from.

The third thing not mentioned here is casinos.  They operate under different legislation of course, and, in the case of Sky City, is owned by a bunch of investment funds (i.e., our super), or privately held in Christchurch Casino’s case.  I found something quite interesting on the DIA website: in 2016 they reported gambling expenditure of $527m.  If they had the same community requirement as Class 4 pokies, then they would have given $210m back into the community.  Instead they are reported (from the DIA website) to have passed just over $4m through to their community trusts.  Less than 1% of the reported gambling percentage.  Profits from NZ operations of Sky City are around $160m (check out the annual report).  We can’t see Christchurch Casino as that’s privately owned.  Of course these entities pay some tax, and our managed funds invest in casinos, but its quite interesting to contemplate, don’t you think?  Perhaps we should be re-defining gaming trusts as a social enterprise? 

Would love to talk with you if you think this is vaguely interesting.

1 Comment
Jay
3/3/2017 09:06:41 pm

Even more disturbing (for me) is how Poker Machine license holders allocate their machines. Isn't it true they put more machines in "poorer" communities? It all seems a bit smoke & mirrors. I believe Woolworths (Countdown in NZ) operates more Poker Machines than the top 5 casinos in Los Vegas combined, but they never mention it in their advertising? Apparently they give back to the community so what's the problem?

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