Windfall possible for community groups

Community groups stand to gain millions of dollars in extra funding if the minimum rate of return from gaming machine societies is increased.

Department of Internal Affairs deputy secretary Keith Manch told the Otago Daily Times it was "of concern" that some gaming machine societies were not returning as much as others.

Under current regulations, societies are required to return a minimum of 37.12% from gaming machine proceeds, measured by their turnover less prizes, taxes, levies and operating costs, to the community.

"It is of concern if societies aren't maximising their return as required - the fact that some societies can return more than the minimum indicates higher returns are possible," Mr Manch said.

A Department of Internal Affairs report shows rates of returns range from the ILT Foundation, of Invercargill, returning 66.33%, to the Mt Wellington Foundation Ltd, of Auckland, returning 26.52%.

More than half of the 49 societies authorised to raise money from gaming machines for authorised community purposes recorded a rate of return less than 40%.

Asked if there were plans to raise the minimum rate of return, Mr Manch said the department would report to the Government at the end of 2011 on the issue.

Any change would require an amendment to the Gambling Regulations 2004.

The Southern Trust chief executive, Karen Shea, of Dunedin, said there had been talk about "putting it up closer to 40%", with gaming societies likely to bear the costs of any increase.

Returning more than the minimumwas about cutting costs and running as leanly as possible, he said.

Any increase in the minimum rate would result in a multimillion-dollar boost for community groups, she said.

For the year ending 2008, The Southern Trust returned 38.73% to the community.

This figure would have been higher closer to 40% if it was not for the more than $10 million the society paid to make sure its gaming machines were compliant, she said.

Any increase to the minimum rate of return was likely to come at the expense of the societies themselves, rather than from gaming duty, problem gambling levy, or payments to venues.

However, gaming societies should be able to exceed the minimum requirements, she said.

For the year ending September 30, non-casino gaming machine revenue was $880 million, with about $270 million returned to the community.

Societies based in Otago or Southland and their rate of return to the community include the ILT Foundation (66.33%), Lions Club of Ohai-Nightcaps (49.17%), St Kilda Community Sports Society (40.02%), The Southern Trust (38.73%), The Bendigo Valley Sports and Charity Foundation (38.30%), Caversham Foundation (37.20%), and the Southern Victorian Charitable Trust Inc (37.13%).

The Minister of Internal Affairs, Nathan Guy, could not be contacted yesterday.

 

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