What is Class 4 Gambling?

    Class 4 gambling refers to non-casino gaming machines, commonly known as pokie machines.

    What influence does the Council have on the location of venues?

    It is important to understand what powers and control the Council possesses under its Policy as directed by the Gambling Act 2003.

    The Council only has the power to limit the number of Class 4 gaming machines and placement of venues. It does not have the ability to restrict gambling in Wellington. 

    The Council can decide to restrict or limit the location of new venues to certain areas (the Council is not able to restrict the location of existing venues)

    Section 101 (3) of the Act notes that the policy – 

    (a) Must specify whether or Class 4 venues may be established in the territorial authority district, if so where they may be located

    The Council is able to restrict new venues from being located next to “sensitive” sites (Education, Religious, Community buildings and facilities)

    Section 101 (4) of the Act notes that the Council may have regard to any relevant matters including:

    (a) the characteristics of the district and parts of the district 

    (b) the location of kindergartens, early childhood centres, schools, places of worship, and other community facilities:

    (c) the number of gaming machines that should be permitted to operate at any venue or class of venue:

    (d) the cumulative effects of additional opportunities for gambling in the district:

    (e) how close any venue should be permitted to be to any other venue:

    (f) what the primary activity at any venue should be.

    What influence does the Council have on the number of venues?

    The Council may limit the number of machines in a venue. It currently does this through managed caps in each electoral zone within the city. These are based on the 2003 electoral wards. 

    Section 101 (3) of the Gambling Act 2003 notes that the policy - 

    (b) may specify any restrictions on the maximum number of gaming machines that may be operated in a Class 4 venue;

    The Gambling Act 2003 restricts new venues to a maximum of nine machines. Venues established prior to 2003 are limited to a maximum of 18 machines.  

    What influence does the Council have on the relocation of venues?

    Section 101 (3) (c) allows the Council to include a relocation policy which allows existing venues to be relocated within the city. The Council's existing policy allows for the relocation of venues under the following circumstances :

    • it relocates to the Central Area Zone; or
    • it relocates to an area identified as a “centre”, but excluding Neighbourhood Centres, in the Wellington District Plan; and
    •  the Class 4 machines in the new venue would not result in more Class 4 machines in a zone than is allowed under section 4 of this policy.

    What influence does the Council have on the social impact of Gambling?

    Under Section 101 (2) of the Act the Council must have regard to the social impact of gambling within the territorial authority district. The Council has produced a report outlining both the background of Wellington’s gaming venues policies as well as the impact that Class 4 gambling has on Wellington. This is report can be downloaded from the Document Library. 



    Why is the Council proposing a sinking lid option?

    The Council believes that a sinking lid is the most effective way to control the growth of Class 4 gambling. It minimises the harm caused by Class 4 gambling while still allowing those who wish to participate safely to do so.

    This will potentially minimise harm by reducing the total number of problem gamblers over time, as the number of gambling venues and machines will reduce.

    However, a sinking lid will slowly affect the availability of funding for sports, community organisations and clubs. The Council believes that the rate of the effects would likely be slow enough to enable organisations to identify alternative funding models before being adversely affected.

    What is a sinking lid?

    A sinking lid means that no new machines or venues will be allowed in Wellington.

    Does a sinking lid affect existing machines and venues?

    The proposed sinking lid policy will have no impact on existing machines and venue, the Council has no powers to close these venues or remove machines.

    Will a sinking lid lead to a reduction in machine and venue numbers?

    It will mean that there will be no new venues or machines; however, it will not impact existing machine and venue numbers. It may lead to a long-term reduction of machines and venues, as venues and machines that are removed or closed will not be replaced.

    Why is the Council proposing to lower the caps?

    It is important to understand that Class 4 gambling remains a legal activity of which funding is provided to community, cultural, education, and sports groups and clubs across New Zealand.

    In Wellington the number of venues and machines has been steadily falling since the introduction of the Gambling Act and the Council’s Policies but this has not had an impact on the level of gambling. This option actively manages the caps and continues to restrict new venues from being established in Neighbourhood Centres, but has no power to close or retrospectively enforce caps on existing venues.

    Although the risk surrounding Class 4 venues is low it still remains. This option acknowledges this by lowering the number of available spaces for machines and continues to actively monitor the level of caps.

    This option allows the Council to maintain an active and effective balance between protecting the social cost of problem gambling and the social benefits of business growth, entertainment and funding for community, cultural, sports and education activities in Wellington.

    With the reduction of machines in the CBD and the continued low demand for venues in western suburbs this option would  lower the caps in these areas by 74 and 13 machines respectively, a net reduction of 87. These areas currently have the capacity for new machines but this not been taken up by industry.

    Proposed Zone

    Caps 

    Difference 

    Paekawakawa/Southern

    100

    -

    Takapū/Northern 

    136

    -

    Motukairangi/Eastern

    114

    -

    Wharangi/Onslow-Western

    40

    -13

    Pukehīnau/Lambton

    270

    -74

    Total 

    660

    -87

    What is the Primary Activity Clause?

    Section 101 (4) of the Gambling Act 2003 allows the Council to determine what the primary activity of a Class 4 venue should be. 

    Prior to 2015 the Council’s policy stated that a Class 4 venue required an on licence with a designation, a club licence or permanent club charter. 

    This clause was removed from the policy in the 2015, as the Act requires venues to be R 18. However, with the removal of the clause it may be possible for an on licence without a designation to apply for a Class 4 licence. In effect this would make it possible for a restaurant or café with an on licence to apply for a Class 4 licence.

    As part of option B the Council is proposing to reinstate the clause in order to prevent non-designated premises becoming Class 4 venues.  

    Why is the Council not proposing to reinstate the Primary Activity Clause as part of Option A?

    If a sinking lid is adopted, there will be no new venues allowed in Wellington. As all existing venues are currently in bars with on licences there is no need to adopt reinstate the clause as it will not be required for new venues.

    Why is the Council proposing administrative changes as part of Option B?

    The existing zones are based on the electoral ward boundaries in the original 2004 policy. These boundaries and caps are based on the electoral wards as at September 2003. 

    These boundaries have changed significantly since 2003 and as part of the review; boundaries that more accurately reflect the current electoral wards are required. 

    The boundaries can be updated to include the new boundaries agreed in the 2019 Representation Review and existed at the time of the 2019 Council elections.  Officers also recommend merging the boundaries of the Lambton and Central zones as well as the Onslow and Western zones to conform to the most recent boundary changes.  It is also recommended that the names of the wards are changed in line with these boundary changes.

    What administrative changes is the Council proposing to the Onslow and Western Zones as part of Option B?

    Although the 2003 electoral ward boundaries were used in the 2004 Policy, the boundaries were shifted in the 2004 Representation Review. As a result, both the Onslow and Western wards were merged to create Onslow-Western Ward. It is recommended that these zones be merged as the wards have been for every Council Election since 2004, and that they be aligned on the 2019 boundaries.

    What administrative changes is the Council proposing regarding the Lambton and Central zones as part of Option B?

    The 2003 Policy separated the Central Area from the Lambton Ward. The Central Area is defined by the District Plan as at September 2003 excluding land zoned residential. This was to prevent the proliferation of venues in residential parts of the CBD. It is noted that in the time since 2003 the residential make-up of the central city has changed to the point that there are now more residents living in the “Central Area.” Due to this change in the make-up of this ward, a machine cap was introduced in 2015 where it previously was uncapped, and in order to simplify the boundaries it is recommended to combine to the Lambton and Central boundaries.

    Why is the Council proposing to update the ward names as part of the administrative changes proposed in Option B?

    The original 2003 policy set the zones to reflect the electoral ward boundaries. Officers note that these boundaries have subsequently changed over the last 17 years. 

    It is proposed that in order to align with the other proposed changes, the ward names decided by the 2019 Representation Review be applied. 


    Can you summarise the administrative changes for Option B?

    Summary of proposed zone changes and caps Administrative changes 


    The existing zones and the proposed zones with the Lambton and Central zones combined as well as the Western and Onslow zones combined are listed below with the proposed names. 


    Table 3: Proposed Zones and Caps 

    Proposed Zone

    Caps 

    Difference 

    Paekawakawa/Southern 

    100

    -

    Takapū/Northern 

    136

    -

    Motukairangi/Eastern

    114

    -

    Wharangi/Onslow-Western 

    40

    -13

    Pukehīnau/Lambton

    270

    -74

    Total 

    660

    -87

    Why are there no administrative changes for Option A?

    If Option A - a sinking lid is adopted, there is no need to make administrative changes to the zones or their names, as the zones will no longer relevant. The zones are based on electoral wards as part of the managed cap policy. A sinking lid policy would mean that the zones would no longer be needed and therefore the proposed changes would not be necessary.

    What was the impact of Covid-19 on Class 4 gambling?

    The impact of Covid-19 and the Government's level 4 lockdown did bring a halt to the spend and had an impact on Class 4 gambling however once the lockdown was lifted the spend on Class 4 gambling in Wellington has returned to a level similar to the previous two years.


    Where does the money from Class 4 gambling go?

    Under the Act the proceeds from Class 4 gambling machines are to be redistributed through trusts and societies. Profits are required to be redistributed to  Authorised Purposes which the Act defines as “a charitable purpose, a non-commercial purpose that is beneficial to the whole or a section of the community, or promoting, controlling, and conducting race meetings under the Racing Act 2003, including the payment of stakes” (Gambling Act 2003, Section 4).

    There are currently 34 trusts and societies holding licences for the 15,470 Class 4 pokie machines in New Zealand. This does not include the 3,078 pokie machines in casinos.  In Wellington there are 40 venues operating 633 machines. 

    In Wellington, pokies earn approximately $40 million per year after winnings are deducted. In the greater Wellington region this is approximately $100 million. These proceeds are then distributed as follows.

    What harm does Class 4 gambling cause?

    We have provided a research paper on the social impacts of gambling in Wellington that identifies and discusses the harm caused by Class 4 gambling.

    Does the Council have the power to close Class 4 gambling venues?

    No. 

    The Council is limited in its powers and abilities under the Act to regulate gambling within its jurisdiction. The Council only has influence over Class 4 venue placement and the number of pokie machines.

    What about TAB Venues?

     

    1. TAB venues that operate for sports betting are covered by the Racing Industry Act 2020 and clause 6 of our existing policy. We are not proposing to change this clause (6) in our policy therefore TAB venues without pokies are not affected by the proposed policy changes.  
    2. However TAB venues that include Class 4 Pokies fall under the Class 4 policy, and are included under the proposed changes for Pokie machines of Option A or B.