Every weekend, thousands of children in New Zealand put on their team jerseys, play on well-maintained fields, and benefit from the dedicated efforts of volunteer. However, few consider where the funding for uniforms, transportation, and tournament fees comes from.
For decades, a significant portion of that funding has come from gaming machine (“pokie”) revenue, which is redistributed to communities through grants. However, this vital pipeline is now at risk.
The government’s proposed Online Casino Gambling Bill, set for its second reading in parliament soon, aims to regulate and license up to 15 offshore casino operators in New Zealand.
While this may seem like a sensible move to manage an unregulated online market, protect consumers, and tax the industry, there is a concerning detail that licensed online casinos are not required to return any of their revenue to community funding. This could significantly impact grassroots sports, which are already facing a volunteer crisis.
Each year, around NZ$170 million flows from gaming machine profits back into communities. These grants are essential for sports clubs, arts groups, community health initiatives, and local charities. They don’t only fund jerseys but also keep clubs operational.
If online casinos are legalized without community return requirements, there is a fear that gambling dollars will shift from local venues to offshore operators, harming community organizations.
Sports leaders have already voiced their concerns. Martin Snedden, Chairperson of Cycling NZ, labeled the proposal a “crazy move” that poses a “massive risk” to grassroots sports. He emphasized that without these grants, many small, volunteer-run organizations will struggle to survive.
The timing could not be worse for a volunteer sector that has been under strain for years. Once-thriving clubs are now struggling to recruit and retain volunteers.
Research shows that compliance demands, such as child safeguarding checks and health and safety paperwork, are increasing, making fewer people willing to take on these roles. Additionally, the rising cost of living means fewer families can afford club fees or take unpaid time to help. Reduced community funding will only worsen this situation.
Supporters of the Online Casino Gambling Bill point to its intended benefits to a safer, regulated gambling market that protects consumers, generates tax revenue, and enforces strict age limits and advertising rules, with heavy fines for non-compliance.
They also highlight the government’s promise of $81 million to address gambling harm through treatment and prevention. For generations, New Zealand has operated on a social contract. Gambling is allowed on the condition that profits and are partially reinvested in communities.
While the current pokie system has its flaws, a 2021 report by Hāpai Te Hauora-Māori Public Health described it as a harmful model that makes community organizations dependent on losses from the very people they aim to support. The report called for a shift to a fairer system, suggesting that the government should directly fund community and sports grant recipients.
However, the new bill does not address the larger issue. While it may reduce some consumer harms by regulating offshore casinos, it does nothing to replace the community funding that will be lost. Instead, it effectively excludes community organizations from the equation.
The potential consequences include clubs folding or cutting programs, leading to decreased participation, especially in low-income areas where grants are crucial; wealthier communities are surviving on fees and private sponsorships, while poorer ones struggle, deepening inequality; volunteers are facing increased pressure to do more with fewer resources; and the social cohesion provided by community groups is being undermined.
The solution is straightforward, albeit politically challenges applying the same community return principle to online casinos that currently exists for pokies. This could involve requiring licensed online operators to contribute a fixed percentage of gross gambling revenue to a community trust, ring-fencing a portion of tax revenue for community funding beyond just gambling harm services, and establishing a transparent framework so communities can see and trust where the money goes.
Another option, proposed in the Hāpai Te Hauora report, is for the government to move away from gambling reliance altogether and directly fund community and sports groups. The NZ$170 million a year is manageable and would demonstrate a commitment to sustaining the volunteers and organizations that are vital to community life.
These approaches align with New Zealand’s longstanding gambling policy principle. if governments allow gambling to expand, they must also support the communities affected by its consequences. For parents watching their children play on Saturday mornings, for volunteers balancing spreadsheets late at night, and for already stretched communities, this issue is far more than just another abstract policy debate.
