The Ministry of Health hasn't produced evidence to show a reduction in gambling harm from the $81 million in tax on the industry, which includes Lotto. Photo: RNZ / Cole Eastham-Farrelly
The government has decided not to increase a problem gambling tax on the industry following a critical report from the Gambling Commission.
The independent regulator says there's no evidence from the Ministry of Health the money from the levy is actually reducing gambling harm.
It's the second time the commission has asked the ministry to front up with evidence of the effectiveness of the programme.
The Minister for Mental Health Matt Doocey said it was concerning it had taken the ministry so long to show its strategy was working.
The Ministry of Health said it was undertaking a review of the programme, and was now funding a research programme that would provide evidence for decision-making.
'No evidence' strategy has had substantial impact
The Ministry of Health had suggested increasing the 2025-2028 problem gambling levy by 20.6 percent, to $92 million, but Cabinet instead decided last month it would be kept at $81 million over three years.
The levy was imposed on casinos, sports betting, pokie machine operators and Lotto to fund public health and addiction services to minimise gambling harm.
Online gambling operators were not included in the levy.
The Gambling Commission said in a report issued earlier this year that the ministry had not provided evidence the money from the levy was actually reducing gambling harm.
Chief Gambling Commissioner, Susan Hughes, KC, wrote that the commission was "very clear" in 2022 the ministry needed to undertake a major strategic review of its strategy, and it was "disappointed" it had not done so.
"The ministry has spent hundreds of millions over a prolonged period of time but there is no evidence that the strategy has had a substantial impact on the level of gambling harm in New Zealand."
The commission was also critical of the way the levy was going to be allocated, saying the Ministry of Health's agency costs were budgeted to double, while funding for research and evaluation, and new services, were budgeted to decrease significantly.
"The ministry should be exercising restraint, consistent with the entire New Zealand Public Service, and should be imposing the minimum levy necessary, rather than increasing it in a manner that is inconsistent with the current financial climate."
Hughes said there was no monitoring or reporting framework to analyse the ministry's strategy and what aspects were working or not.
The commission also said the number of presentations to problem gambling services was declining significantly, from 6525 in 2013-2014 to 3615 in 2023-2024, but noted a growing use and concern about online gambling.
Minister of Mental Health Matt Doocey. Photo: RNZ / Mark Papalii
The commission noted that numbers of people presenting to gambling services did not fully capture the harm caused by gambling.
Doocey said it was worrying the Ministry of Health was taking so long to provide evidence its gambling harm strategy was working.
"I think that it's concerning that it's taken so long to see what changes are being delivered as a result.
Doocey said the ministry was conducting a review of its strategy and Cabinet would reconsider the levy next year in light of that evaluation.
"We want the money that is being invested to be making a real difference on the ground and deliver a return on investment.
"Our focus is on delivering timely, effective support to individuals, families, and communities affected by gambling harm.
"We will be making sure that New Zealanders are seeing that material difference," Doocey said.
The Ministry of Health's response
A spokesperson for the Ministry of Health said its gambling harm strategy for 2025-2028 was informed by international and local research, and drew on a range of public health services.
The spokesperson said the ministry listened to a range of views during its consultation on the levy and said there was "strong support" for new priorities to prevent gambling harm.
"The revised strategy reflects the feedback we received and includes new investment in treatment and support, improving prevention and early intervention initiatives, and improving the effectiveness of support for those experiencing gambling harm."
In response to criticism from the commission on the agency's operating costs, the spokesperson said operating costs at the ministry had risen from $3.5 million to $5.2m under the new levy period, and that the Gambling Act required that some part of the levy was used to implement its strategy.
Hughes said several problem gambling organisations supported an increase in the levy, with The Problem Gambling Foundation's chief executive Melissa Thompson telling the commission the increase was relatively modest in relation to the growth in spending from gambling products.
The Problem Gambling Foundation could not be reached for comment.
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