Casinos: Place Your Bets

Phil Pennington


IN THE MONTE CARLO of the South, it's de rigeur on a Friday night to take your out-of-town guests to the Christchurch Casino, a place that's been described as "a thunderous success despite being a thunderously ugly building".1 When I stayed in Cashmere a while back with a young conservative Christian couple, they suggested we pop in for a small gamble or a look, as if we were going to the movies or McDs.

In Auckland, meanwhile, casino-going can be a family affair, like going to the zoo. One parent can pull a pokie while the other takes the kids up the Sky Tower for a look (just as long as there's no power cut).


Casinos are here and casinos are popular. They're "Enid Blyton country, the land at the top of the Faraway Tree, the land of Take What You Want".2 And more of them are on their way - Hamilton, Queenstown and Dunedin bids squeezed in just before the Government called a temporary halt (more grudgingly than with authority) to any more casinos late last year.

For Kiwis, it could still be that a chance at blackjack will become as commonplace as a Strike Four bet at the Lotto shop - which has rapidly become as much an institution of the local shops as the dairy with its Tip Top signs. And it could be, some folk say, that our wallets and our souls will suffer for it.

People like to gamble; governments like people to gamble - it makes them money; and gamblers like casinos. Put as bluntly as that, the case for casinos can seem pretty cut-and-dried. It's anything but, as the seesawing struggle in New Zealand between people trying to set up casinos and those trying to block them goes on.

There's no clear-cut winner. There's no clear-cut legislation. There is a lot of confusion, and some companies with badly burnt fingers (Casinos Austria says it spent two years and $6 million on a Wellington bid only to be snared by the Government's moratorium backdated to the very day of its application, last October 16).3

Casinos mean jobs and entertainment. They can also mean gambling addicts, crime and surrounding restaurants closing down. But Australian expert Dr Jan McMillan - who's doing the first independent and comprehensive study of New Zealand's existing two casinos to report back to the Government - says casinos don't necessarily either pull in tourist dollars or increase problem gambling. "You just can't make sweeping statements about whether casinos in general are good or bad - that is why it is so important that we do the research," says Dr McMillan, of the Australian Institute of Gambling Studies at Western Sydney University. Casinos had to strike a balance between good and bad social effects, she said.4

Balance in debate about casinos is hard to find. The arguments for and against are all over the media. They're also selective (especially when moral indignation outruns mental exercise, or profit forecasts blind the social conscience). Slapping a blanket ban on casinos and a "Closing Down" sign on Harrah's Sky City has a temperance-type appeal to people who don't like gambling. But that's not going to happen. After all, casinos are just a part of a global gambling industry whose ingredients include money and chance - but also human ingenuity, love of fun and plain old greed.


GAMBLING'S nothing new. As early as 2000BC Egyptians played gambling board games and the Chinese in 1100BC invented a Keno game like that played in casinos today.5 Australians spend more on gambling than on food - more than $A3300 a year each on average, three times as much as anyone else - while the Jews have long been used to drawing straws to decide even very important matters (see Acts 1 21-26; also Jonah 1:7,8).

"Gambling and betting have always been pastimes of New Zealanders," says the New Zealand Yearbook. "Even aboard ship bound for New Zealand, early immigrants ran sweepstakes on the distance their ship would travel in a day, raffled anything they could fish aboard, spun the roulette wheel, threw dice and gambled at cards."6

Gambling is a social lubricant, and solvent. Housie gets Taita parents together to natter and win some groceries; horse racing has its own subculture, especially in the country; and now, perhaps, casinos offer middle class city dwellers their own place - though it's a very peculiar place according to Evening Post columnist Mary Varnham, who found only a "doleful air of desperation" at an Adelaide casino, along with "a row of baby buggies perched inside the entrance. It was 1.30am."7

The plentiful gaming opportunities of early New Zealand burgeoned into a gambling industry that in 1996 expected turnover to top $5 billion, a fivefold increase on 1985 and a leap up on $3.2 billion in 1995. The $849 million lost by gamblers equated to $235 for every woman, man and child.8 "The great majority of New Zealanders gamble to a greater or lesser extent," said an Internal Affairs report The Social Impact Of Gaming In New Zealand, in 1995. Nine out of 10 people had a wager now and again, studies showed.

While Lotto leads the popularity stakes, many people like board games too, and they get them at the Christchurch and Auckland casinos, along with 1300-plus pokie or gaming machines (what critics call the "crack cocaine" of gambling for their proven addictiveness). As well, casinos offer "high entertainment value" and, in Christchurch's case, the "focus for a range of social events held by community groups", the Internal Affairs report said.

People put their money where their nights out are. Casino turnover jumped by more than a billion dollars in just one year, to $1.45 billion in 1996, and keeps going up. So too does the money that goes into the charitable trusts that casinos, by law, must fund, and the tax going into government coffers. That's with two casinos: soon there might be six.

Which puts the Government in a bind. It recognises there are at least 12,000 adults - some critics say up to 60,000 - with serious gambling problems (and they're more often young, male, unemployed, Islander or Maori). But it also knows that more than $190 million a year is scattered widely from gaming profits, which by law may only be used to benefit the community.9

The demands on this cash - from health to budgeting to old age groups - far outstrip the resources, and cutting off casinos would only shrink the pool. And anyway, who would pay for the Auckland Downtown Mission's Christmas cake if Sky City, which provided a big beauty last year, didn't it?

The Internal Affairs report mentioned above was part of a big review of gaming. Its thrust was for a "Gambling free for all".10 All types of gaming would be opened to all operators under a single legislative framework with "transparent" criteria including vetting for any criminal links.11 In short, more gambling, not less. Internet gambling up to the limit of our credit cards was seen as being full of potential.

Psychologist Sean Sullivan of the Compulsive Gambling Society says such games "will normalise gambling in a horrendous way". They work in the same highly addictive way as casino pokies - high entertainment and instant results - "but you don't even have to leave home".12


It was against this expansionist grain, then, that Parliament late last year voted 56-49 in a conscience vote for the three-year moratorium on new applications to the Casino Control Authority. It was contentious, particularly the backdating to October 16. It raised the spectre of compensation for casino bidding companies: until then, the law had allowed for casinos to be set up at least 100km from the two existing casinos after November 1996 in the South Island and January 1998 in the North.

Casinos Austria was upset, but had seemed almost resigned to hitting a brick wall sooner or later after Wellington Mayor Mark Blumsky in mid-1997 changed his mind and came out against a casino. The company protested that it had been "caring and genuine" and had set up a community consultative committee - though the Salvation Army said it was only on the committee to help set policy to protect gamblers. More than 20,000 Wellingtonians signed a petition against a casino, and the Salvation Army said the moratorium didn't go far enough and "should extend to all casinos that are not yet in operation".13

It doesn't, and four new casinos are among the hoops and jumps of the application process: one each in Hamilton and Dunedin, and two in Queenstown. A survey of 800 Hamilton residents found 60 percent didn't want a casino, but two-thirds of businesses did. "Provided the appropriate checks and balances are in place, the development should be allowed to proceed, and create a long-term benefit to the city," said Waikato Chamber of Commerce president Gail Jones.14

One report said the casino would create 400 fulltime jobs and boost Waikato income by $36 million. However, the consultants admitted to weaknesses in their reasoning after a Waikato University academic said the model could be turned around to show the casino returning just 33 cents for each dollar it took out of the economy.14

Hamilton City Council voted narrowly against getting an independent social and economic impact report - the sort of report insisted on for every casino application by leading anti-casino campaigner and Alliance MP Phillida Bunkle. Her big point is that the law does not guarantee communities any say on whether or not they get a casino, petitions or not. If the Casino Control Authority is satisfied, that's enough. "To those who observe such things," writes columnist Varnham, "the authority has most often appeared anxious to smooth the path for casino operators rather than subjecting them and their industry to rigorous scrutiny."15

The Government last year promised law changes to give communities a chance to demand a binding poll, to give weight to local body views and to force the control authority to consider the cumulative impact of a casino on New Zealand. That legislation has not yet emerged.

But where there is money, there will be stonewalling - as well as all sorts of commercial alliances. Perry Group, which is running for the Hamilton casino, got the backing of the Tainui Trust Board (it likes casinos: its Sky City shares realised a 50 percent profit, believed to be several million dollars, when it sold them). Rotorua tribe Ngati Whakaue wants 75 percent ownership of a Rotorua casino, regardless of MP Tukuroirangi Morgan's protests that Maori children "will be the victims of addictive gambling parents if casino growth in this country is not stopped".16


Down south it's been pretty cosy. Auckland's Sky City was joined in a Queenstown bid with Skyline Enterprises, which had a 30 percent stake in the Christchurch Casino. Skyline also had a 12.5 percent holding in Dunedin Casinos Ltd, which is also angling for Queenstown. In Dunedin, the casino application - it costs $450,000 just to file one with the control authority - is by Dunedin Southern Cross Hotel.17

A little convolution and a lot of conflict are the grist of the casino story mill. Christchurch Casino chief executive Arthur Pitcher has been reported slamming the Government for not giving him the power to ban problem gamblers. Nor, he charged, had the Government spent a cent on problem gambling from the $22 million collected since 1994 by way of its 4 percent gambling tax, though that was earmarked by Parliament to deal with casino fallout. "The Government has to decide whether it is indulging in a tax collecting exercise or is worried about gambling."18

The New Zealand Medical Journal reported last October that calls to a gambling helpline rose by 65 percent to 826 in the six months after the Auckland casino opened. Its study concluded that problem gambling would soon be a serious and widespread mental health problem.19 However, the Compulsive Gambling Society said its 21,000 hotline calls in 1996 identified pokies in pubs and clubs as a bigger problem than racing and casinos. And TAB president Rick Bettle, while wanting help for addicts, defended the industry: "By far the majority of gamblers are not problem gamblers. They are everyday Kiwis."20


The experience of casinos overseas is not reassuring. Australia has 14 casinos - one in every state and territory - turning over $A7.8 billion a year (not much compared with pokies and gaming machines at $37 billion). Australians spend $A61 billion on gambling a year, and only $46 billion on food, and their gambling losses amount to $10 billion each year.

Their loss is someone else's gain - Kerry Packer's, for one, not to mention the state governments who took almost $3 billion in gambling taxes in 1994-95.21 Dr Jan McMillan says the big change in gaming came with the move to privatisation in the 1970s, and now revenues once tied to social welfare are almost severed from it.

Media baron Packer's emergence not just as Australia's richest person but as the lynchpin of the national casino industry got the newspaper The Australian going.

"There is a real public policy issue whether, in the face of some active public repugnance relating to the perceived social consequences of excessive gambling, governments are right to promote casinos," the paper said in a January 1996 editorial. "Casinos," it added, "have projected a level of glamour which have tended to disguise their real purpose - entertainment businesses carefully designed to extract money from the gullible pursuing dreams of monetary riches beyond compare."

All state governments got hefty income from gambling. "The nagging question is whether any government can adequately defend itself against allegations that it is being suborned by commercial interests because to do otherwise could threaten its revenue base," The Australian said.22

If Canberra wasn't listening, maybe Wellington was (the New Zealand Government took $199 million in gambling tax in 1995).

A whizz around Melbourne's $NZ2 billion Crown Casino (42 restaurants, shops and 16 cinemas) last August convinced Wellington mayor Mark Blumsky that his city would suffer from a casino. "Restaurant areas such as Lygon Street, that were busy on previous visits, were quiet, and the Southbank next door to the casino, which had restaurants galore, was nearly empty," Blumsky said.23

From the United States, experts have come to New Zealand pushing their barrows - and in them is dirt on casinos. University of Illinois Commerce Professor John Kindt warned in 1996 that windfalls were illusory: casinos would suck out at least $3, and up to $12, for every dollar they put into an economy, he said.

A report in Florida projected sales tax revenue would drop millions as shoppers turned into bettors. Kindt warned that New Zealand's small population made it "particularly susceptible", and it couldn't export any gambling problems, unlike Las Vegas and Atlantic City.24

Tom Grey, an American Methodist minister brought in last November by Hamilton-based Casino Opposition Action Network, said the tide overseas had turned against gambling's spread, and 35 US states were stomping on it. "In the year 2000 we're looking at removing casinos from Indiana," Grey said. In Iowa studies showed, he said, that problem gamblers went from 1.7 percent of the population to 5.4 percent in the few years after 10 casinos opened in the late 80s. And each addict would cost the community tens of thousands of dollars in damage or treatment, he said.25


The bad news sounds convincing. The good news might be turned up about Auckland and Christchurch casinos by Dr McMillan. But against the bad it will ring hollow, because in their guts people know that gambling, if it has a place in society, fits with the fun of immigrants guessing how far the ship has travelled today, or taking that $5 slip in the office sweepstake on the Melbourne Cup.

What should only ever be an entertaining aside to our robust daily work of putting in effort for due reward - whether money or satisfaction - becomes a sick and even dangerous pastime, and a monster, when greed makes it the focus. And that's true whether the greed's on the part of the gambler, or the corporate bosses whose salaries are paid from someone else's losses.

As Mary Varnham writes: "Nor do [gaming] ads promote the economic truth: that the only real way to get ahead - as an individual, a community and a country - is by hard work and productive enterprise. In the long run, gambling creates nothing."26



1. Columnist Joe Bennett, The Evening Post, February 4, 1998, p7.

2. ibid

3. The Dominion, October 28, 1997, p8.

4. The Dominion, October 29, 1997, p2.

5. The Social Impact of Gaming in New Zealand (Policy Research Unit of Internal Affairs: Internal Affairs; Wellington, 1995), p21.

6. New Zealand Official Yearbook 1997 (Ed David Zwartz: GP Publications; Wellington, 1997), p327.

7. Columnist Mary Varnham, The Evening Post, March 14, 1996, p4.

8. The Dominion, May 17, 1997, p3.

9. Social Impact Of Gaming, pp7, 5.

10. headline in the Dominion, July 27, 1996

11. The Dominion, July 27, 1996, p1.

12. Quoted by Varnham; The Evening Post, June 19, 1997, p6.

13. Letters to the Editor, The Dominion, November 6, 1997, p12.

14. The Waikato Times, December 10, 1997, p3; and September 29, 1997, p3.

15. Varnham, The Evening Post June 19, 1997.

16. The Dominion, October 14, 1997, p2.

17. Sunday Star Times, June 13, 1997, p3.

18. Waikato Times, December 30, 1997, p17.

19. Waikato Times, October 14, 1997, p2.

20. Evening Post, November 17, 1997, p13.

21. Evening Post, May 7, 1997, p7.

22. Republished in part in The Evening Post, January 27, 1997, p4.

23. Evening Post, August 30, 1997, p22.

24. Sunday Star Times, January 28, 1996, p2.

25. The Dominion, November 15, 1997, p2.

26. Varnham, The Evening Post, June 19, 1997.


Phil Pennington is married to Jacqui and they live in Naenae. They go to a little Anglican church down the road. Phil has a son, Tyler, in Bangkok and is a journalist on Wellington's Evening Post newspaper.

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