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Gambling facilities decline further

Published: 2:50PM Wednesday February 01, 2006 Source: TVNZ Interactive

The number of gambling operators, venues and machines is continuing to decline according to the latest quarterly gambling licensing statistics for pubs and clubs.

Internal Affairs says the three categories showed a further decline in the December quarter from the September quarter.

The number of licensed pub and club gambling operators fell to 526 at the end of December from 535 three months earlier, the number of venues dropped to 1,747 from 1,770, and the number of gaming machines declined to 21,343 from 21,684.

And at the end of December, there were 10% fewer operators, almost 6% fewer venues and 4% fewer gaming machines than a year earlier.

"These figures indicate that the Gambling Act 2003 is achieving one of its purposes - controlling the growth of gambling,"  says Internal Affairs deputy secretary Andrew Secker.

The downward trends started, or accelerated, after the act was passed in September 2003, he says.

The act introduced a much stricter licensing regime and lowered the numbers of machines allowed in venues.

In general, venues licensed as at at October 2001 can have up to 18 machines, while others can have up to nine.

The act also gave communities a say, through their local authorities, which can make policies preventing or limiting new venues and controlling the expansion of existing venues.

Machine numbers peaked in the June 2003 quarter before the Gambling Act was passed.

Since then gambling operators have declined 25% from 699 to 526 at December 05, venues are down by 18% from 2122 to 1747 and there were 15% fewer machines, down from 25,221 to 21,343.

|"The drop in the number of operators was most significant in the non-club sector. The number of these pub-based operators declined by a third, from 120 at June 2003 to 80 at December 2005," Secker says.

Despite this decline, information the pub-based operators have provided to the department indicates they gave out record amounts of money to community purposes in both 2003-04 and 2004-05 - around $300 million in each year, he says.

The department thinks there's room for more consolidation in the pub-based sector.

Fewer operators should mean that overall costs go down, because there are fewer fees, salaries and facilities, Secker says. He says when the number of operators drops, the remaining ones benefit from economies of scale.

While the number of pub-based operators have declined, the average number of venues for each of them has grown from less than 13 to more than 16 between June 2003 and December 2005.

Reducing costs through consolidation could maintain a good return to the community even if the amount players spend on the machines is reduced, Secker says.

The licensing statistics follow recently-released gambling figures for 2004-05, which showed total spending on the main forms of gambling - racing and sports betting, Lotteries Commission products, non-casino gaming machines and casinos - fell marginally from the previous year.

Spending fell from a record high of $2.039 billion in 2003-04 to $2.027 billion in 2004-05.

Non-casino gaming machine spending fell by 0.8%, from $1.035 billion in 2003-04 to $1.027 billion in 2004-05.

Internal Affairs estimates suggest 2005-06 will be the third-highest year on record, about 8% below the record 2003-04 year.