Harkness Henry, Lawyers Jarrod True 0800 426 254 Jarrod.True@harkness.co.nz Harkness Henry, Lawyers gamblinglaw.co.nz

Outline Asked to comment on the regulator's performance. Share thoughts on upcoming class 4 reform. Demonstrate some of the search functions of the gamblinglaw.co.nz website.

Regulator's performance Increased communication and engagement. Quarterly catch up meetings. Proactive release of policy documents and other official information. Willingness to have open and frank discussions when views differ. Early input into regulatory change - game rule workshop.

room for improvement Greater awareness needed of the reputational damage that occurs when negative press releases are issued. Negative public perception leads to increased restrictions via government and territorial authorities. CCT example.

Mystery shopper project Results immediately distributed to the press. Referred to regularly when class 4 reform debated. Department's expectations could have been more clearly stated before project commenced.

room for improvement Delay. Reluctance to give express guidance before action taken. Need for binding ruling process?

upcoming reform Positive that the Minister wants a sustainable class 4 grant funding model. Positive that the Minister is aware of the downward trend in class 4 revenue/funding and wants to take steps to address this.

$26m on promotion and retail support. Best ad award 2011. Click to view Lotto Ad:  https://youtu.be/mLW6L7cL1vI Lotto $26m on promotion and retail support. Best ad award 2011. SkyCity TV ads. Fireworks. X Factor. Class 4 One sign or sandwich board. Click to view SkyCity Ad:  https://youtu.be/rqE1DdBAlDo

Casino gaming machines have no prize limits. $36m lotto prize.

Class 4 is limited to the physical offering.

advocate for change Increase $2.50 bet limit. Increase $500.00 machine prize limit. Increase $1,000.00 jackpot limit. Permit multi-venue linked jackpots. Permit increased advertising/promotion.

Class 4 under threat by the likes of pokies.com

need to evolve The Minister's review includes a review of online gambling. Class 4 operators should be granted a licence to operate the currently approved class 4 games online. The licence would include the right to advertise/promote.

Why class 4 operators? Matching physical games with online games utilises all the existing safeguards. Online offering could be provided by existing operators at minimal costs. Existing class 4 network could support online offering (ID validation, prize payment, joint exclusions).

Why class 4 operators? Public would be familiar with the games and have trust and confidence regarding odds and prize payments. Ability to use existing grant distribution channel. Online funds would become net proceeds and be subject to the existing set of comprehensive rules.

Why class 4 operators? No issue with venue key person conflicts. No venue payment issues. “While the rise of online gambling had worried the foundation originally, Ramsey said a feared increase in problem gambling online had not eventuated in New Zealand.” Timaru Herald 21/10/15.

Why class 4 operators? Help to keep class 4 sector sustainable. Consistent with TAB and Lotto (physical providers being given online approval). If online licences were only available to class 4 operators with three year licences, there would be a real incentive to adopt best practice.

eliminating borrowing costs $2.4m is spent each year on borrowing costs. Permitting equity funding of gambling equipment would eliminate borrowing costs. The necessary regulatory change could be made as part of the current authorised purpose return amendments.

reducing the risk of armed robberies All possible steps should be taken to reduce the amount of cash held at class 4 venues. Ability to use gaming profits to fund float. Ability to make prize payments electronically. Use of ticket-out technology.

Questions welcomed Jarrod True 0800 426 254 Jarrod.True@harkness.co.nz gamblinglaw.co.nz