Lotto warned $25M online Bingo plan could create more harm
This is the second story in an investigative series on Lotto. Look out for more next week.
Lotto is being urged to drop plans to launch an online Bingo game, with a member of its expert advisory panel saying it could increase gambling harm in Māori and Pasifika communities.
By Guyon Espiner for rnz.co.nz
The warning comes as documents obtained for RNZ's investigation into Lotto show it already has major holes in its engagement strategy with Māori and Pasifika, who are two to three times more likely to suffer gambling harm.
Lotto wants to introduce online Bingo by early 2023, and in a submission to the Minister of Internal Affairs seeking approval, says it aims to make an extra $25 million from the game in the first year.
But Maria Bellringer, director of Auckland University of Technology's Gambling and Addictions Research Centre and a member of Lotto's expert advisory panel, wants the company to ditch the idea.
Bellringer said online Bingo is a form of "continuous gambling" where players can immediately reinvest their winnings, unlike a lottery draw where gamblers wait hours or days for the result.
As online gambling could be done with ease and in secret it was "highly associated" with problem gambling. "So you've already put two problematic or potentially risky behaviours together."
Bellringer said Bingo also featured strongly as a social, cultural and fund raising activity in Māori and Pasifika communities.
"I really feel that making Bingo highly accessible by putting it online, is going to increase the risk of harm for Māori and Pacific communities," she said.
Māori are three times more likely to be moderate-risk or problem gamblers than non-Māori and Pasifika 2.5 times more likely, according to the Health Promotion Agency's 2020 Health and Lifestyles Survey.
Bellringer was interviewed as part of an RNZ investigation into Lotto, which has unearthed hundreds of pages of official documents from the state gambling company.
Among those documents are Lotto's submission to the Minister of Internal Affairs Jan Tinetti, seeking permission to launch the game.
In the submission, released under the Official Information Act, Lotto's Chief Executive Chris Lyman acknowledges some communities are more vulnerable to gambling harm.
"Lotto NZ recognises the research and data showing that Pacific peoples, Māori, some Asian communities and people on lower incomes disproportionately experience gambling harm," he wrote.
"We know that Bingo is a familiar game among Pasifika communities around New Zealand, and is adopted for socialising, entertainment, and one-off fundraising efforts."
To "better protect Pacific people from potential gambling harm" Lotto would include Bingo as "a topic for discussion" within its responsible gambling programme for this community.
"With regards to Bingo, Lotto NZ will also ensure that our games do not have features that specifically or deliberately appeal to Pasifika communities - for example, via the design of the theme or artwork on Bingo games."
Under the Gambling Act Minister Tinetti has the power of veto and has pushed pause on Lotto's online Bingo plans, while she considers a review of the entire online gambling sector, which has exploded in recent years.
Lyman is frustrated with the delay, according to the minutes of a Lotto stakeholders meeting in June 2022.
"Lotto has a Bingo product ready to go but the Minister has put that on hold pending the Online Gambling Review," Lyman said. "Lotto is disappointed the Online Gambling Review has not progressed further, which is holding up Lotto's ability to move forward. We need legislation that is up to date."
The Minister indicated to RNZ she was cool on the idea.
The Government is expanding Mana Ake to provide more school-based mental wellbeing support to years 1-8.
"At the front of my mind all the time is harm minimisation. I've seen too many issues that have happened with gambling. I've seen too many families that have been hurt and harmed," she said.
"I have been quite open with Lotto that I will not be making any decisions around online Bingo until we've looked at the whole of the regulatory regime for online gambling."
RNZ's investigation into Lotto has found large gaps in the company's engagement strategy with Māori and Pasifika communities.
Lotto's corporate affairs documents show that in 2021 just one out of 174 staff one was Māori.
"I'm not proud of that," Lyman told RNZ. "It's not good and we're not happy with that situation. It's not going to be an easy fix but we are committed to fixing it."
Lotto also set up an expert advisory panel with no Pasifika representative, a gap the panel itself recognised at its first meeting in October 2019.
Minutes from the meeting show the panel advised the company of a "possible gap by not having any members that specifically represented the perspective or voice of Pacific or Asian communities, with the Pacific community being seen as particularly vulnerable".
The documents show that in March 2022 it was still looking for a Pasifika representative for the panel, although Lotto said this had now been resolved.
Lotto has known for several years that its messages on safe gambling were not getting through to communities at higher risk of gambling harm.
A Lotto Corporate Social Responsibility memo from August 2021 reveals the company conducted research into the effectiveness of its safe gambling resource materials, called Play Smart.
"The key take outs were that the current Play Smart materials are not resonating with Pasifika communities," the document says.
The chief executive himself acknowledged "the need to do better in managing harm minimisation with Māori and Pasifika communities," according to minutes of a September 2020 Lotto stakeholders' meeting.
Despite those shortcomings Lotto is eager to launch online Bingo.
Lyman told RNZ New Zealanders were already playing the game on offshore websites and it would be safer for them to play Lotto's version - which would also return some of that money to the community.
"It's a game that's being played by Kiwis through offshore, unregulated sites. That troubles me. I think that we could provide that service to those New Zealanders onshore, for a regulated site where there are harm controls," Lyman said. "We're not trying to create a market here. There is a market already. Hundreds of thousands of Kiwis are playing Bingo offshore."
Lotto's submission to the Minister says that online Bingo "offers a commercially attractive potential player base, which would allow us to maximise profit growth for contribution to New Zealand communities".
Lotto hopes to make $25 million in the first year, based on capturing 25 percent of the existing online Bingo market in New Zealand, which it says would generate an extra $2.7 million for distribution as lottery grants.
The submission says the maximum jackpot within any Bingo room would be $100,000, which would position it as "a small maximum jackpot game".
It says that using a risk assessment tool, called Gam-Gard, would put its online Bingo game "at the low end of the medium risk range," and with additional safeguards could be reduced to a "low risk" product.
Lotto said it was worried by the growth of offshore gambling and estimated New Zealanders' spent about $510 million on those sites in 2020.
The Department of Internal Affairs (DIA) said offshore gambling was a key focus of the Online Gambling Review - a three year project it had just handed over to its Minister, Jan Tinetti.
"Compared to most other forms of gambling in New Zealand, we have virtually no oversight of how well harm minimisation standards apply to those people who are gambling online," Suzanne Doig, DIA's general manager of policy, told RNZ.
Lotto's safety measures for online gambling include spending limits of $150 a week and $500 a month and restricting gambling hours to between 6.30am and 11pm (extending to midnight on Wednesdays and Saturdays).
But Lotto is also eager to expand its online offerings beyond Bingo.
In the company's submission to the Online Gambling Review it said it wanted to introduce online casino games.
Doig said the DIA had not received a formal application from Lotto for this but would have concerns as "casino games online are the highest risk form of online gambling".
She questioned "whether it's appropriate for Lotto - as a Crown Entity, as the state gambling provider - to be going into the highest risk end of the market".
Tinetti said reducing harm from online gambling was a "key priority" in her portfolio.
"I'm very concerned about online gambling in general and Lotto definitely comes in as part of that," she said. "We don't want to be the fun police. We know that people get pleasure out of engaging in these providers. But at the same time, we want to ensure that we're not creating a situation where people are experiencing more harm."
Lotto has offered gambling online since 2008 but sales have surged in recent years - from 19 percent of total sales in 2019 to about 45 percent now.
About 1.4 million people now have an online Lotto account, compared with 845,000 in 2019.