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Two poker machine trusts together distributing more than $60 million a year to community groups - including in Dunedin - have urged the Dunedin City Council not to punish the industry for problem gambling.
One appeal came from the New Zealand Community Trust, the second-largest poker machine-funded trust in the country, which yesterday warned amateur sport would at ''serious risk'' without their support.
The second came from Pub Charity, a poker machine-funded charitable trust, which warned if pokie funding dried up, councils and the Government could be left to pick up the tab.
The concerns were raised as the council's hearings committee considered a second day of public submissions on a proposal to cap the number of poker machines and venues in the city at existing levels.
The move has prompted more than 600 public submissions, most of them calling for a tougher sinking lid policy instead.
On Wednesday, the committee heard from submitters including Dunedin woman Karen Hansen, a self-confessed gambling addict, who described her decade-long struggle with the pull of poker machines.
Yesterday, NZ Community Trust marketing manager Sally Ann Hughes said the trust supported a cap, but any move to reduce the number of venues or machines would not stop problem gamblers.
''An addict is an addict ... as long as there's one pokie machine left, they will find it,'' she said.
The victims of any sinking lid policy in Dunedin would be the sports clubs and community groups who relied on a share of the $37.4 million distributed by the trust across New Zealand last year, she said.
The trust had four gaming machine venues in Dunedin and last year distributed $573,000 to 56 groups across the city.
Most of the money - about 80% - went to amateur sports clubs, but recipients ranged from the Momona Hockey Club to the Otago Cricket Association and Coastguard Dunedin, she said.
The density of machines was lower in Dunedin than the national average, while the overall number of machines across the country stood at 17,943, but was declining by about 500 machines a year, she said.
''They are going down, I think, at an alarming rate. We won't have any money to give away shortly.''
At the same time, the incidence of problem gambling remained steady, but low, at 0.3% of the population, she said.
In Dunedin, 19,500 people played poker machines, but there were only 191 recorded instances of problem gamblers in 2011, which was based on enforced or voluntary exclusion orders, she said.
The social cost of problem gambling was also low compared with alcohol and tobacco, and needed to be kept in context given the benefits from poker machine grants, she said.
The trust's machines gathered $91 million last year, and distributed about 40% in grants, she said.
The rest covered a variety of costs, including government taxes and compliance costs (29%), venue hire (16%) and the cost of buying or upgrading machines (9%).
Just 6% of revenue was used to cover the trust's costs, which including 44 staff based mainly in Auckland, Wellington and Christchurch, she said.
''We don't make any profit,'' she said.
Pub Charity donations manager Graeme Ambler said his organisation also supported a cap, but warned any move to reduce gaming machine or venue numbers would hurt community groups.
The amount of money available for grants was ''heavily related'' to the number of machines in the community, he said.
The trust distributed about $28 million a year from its operations - which included four venues and 35 poker machines in Dunedin - and provided ''huge'' economic benefits to communities and the country, he said.
That was despite a 30% reduction in gaming machines nationally in the past nine years, matched by a 28% drop in revenue for the industry, he said.
Any further reduction would only push more funding demands on to councils and the government, as well as encouraging more online gambling that took money overseas, he said.
Yesterday was the second day of the three-day hearing, but featured only three submitters - including the two trusts' representatives - after other submitters failed to turn up for their allocated speaking slots.
The only other submitter to speak, former pub worker Oliver Watkins, said he had witnessed the damage caused by pokies and supported a sinking lid policy in Dunedin.
''I have worked in pubs and it's very, very disheartening to see people coming in every single day and wasting all their money on pokies, when they can't really afford to.''
The hearing will conclude on Monday.