A challenge for Chris Tremain: get the state out of the silly business of monitoring spot draws

Dunno if this is the sort of thing that is guaranteed to earn public acclaim for Chris Tremain as it did for Crusher Collins with her crackdown on boy races.

In fact the issue is so bloody trivial, we must wonder why the government shows any interest at all.

But it gives Internal Affairs Minister Chris Tremain something to do at a weekend, obviously.

He has been tidying up, then releasing a media statement (here) calling for changes to the regulations around spot prize draws.

Spot prize draws?

These are worrying our Government?

Yep.

“When spot prizes are used at events, such as fishing competitions and fun runs, they can be classed as gambling under the Gambling Act – which means organisers have to comply with a raft of rules. In some cases those rules can be overly rigorous and I want to cut the red tape,” says Mr Tremain.

Under the Act if the prize exceeds $500 in value the competition must be run by a society (rather than an individual or a company) and any proceeds from the activity must go to authorised community purposes. If the prize exceeds $5000 in value the society running the competition needs a licence.

Let’s not be too astonished. That’s what happens when we live in a Nanny State.

But it’s heartening to see we might be in for some relaxation of those silly rules.

“Organisers say that because the primary purpose of their event isn’t gambling and the potential for harm is minimal the requirements imposed are too harsh,” says Mr Tremain.

“The Department of Internal Affairs has been working with organisations to help them comply and there have been no prosecutions. It’s a confusing and difficult space and it’s time the regime imposed on spot prizes was changed.

“A discussion document is necessary because changes to regulations are required. I am looking forward to hearing feedback from event organisers and members of the public.”

So – hands up those of you who can recall a great spot-prize scandal in the past six months.

There’s a small prize on offer for the constituent who can describe and verify the case that has done the greatest harm to innocent members of the public.

On the other hand, monitoring the spot prize business does provide employment for some Internal Affairs staff who busy themselves with the occasional crackdown.

This in turn results in the country’s lawyers doing a bit of business, explaining the law to their clients.

An example can be found here.

The organiser of New Zealand’s biggest fishing competition based in Northland has consulted lawyers to ensure the event complies with the Department of Internal Affairs regulations and has confirmed the event will go ahead next year.

Earlier this month the department launched a crackdown on competitions giving out spot prizes, warning them it constituted illegal gambling.

Fifteen organisations were sent cease-and-desist letters, informing them that events with an entry fee cannot have door giveaways, raffles or barrel draws with prizes of more than $500.

Beach and Boat Fishing Competition organiser Tony Wheeler confirmed that the two-day competition in Ruakaka held last month would go ahead as scheduled after “a major rejig” to comply with the law.

“It’s been a really massive hill to climb. After many weeks of frantically working to get compliance for the event, it has resulted in success and the 2013 event is all go. We love running the event and we are proud of the return it has given the community,” Mr Wheeler said.

“In order to comply with the regulation set out by DIA we had to give some things that normally happen up, which I still think is wrong, but so be it. The team and I understand we must comply and have worked hard to redevelop the event according to the rules and regulations as set out by the department.”

He said the event was of huge financial benefit for the local community, with $2.2 million being spent on accommodation, food, beverage, fuel, bait berley and more.

The event had returned funds of over $55,000 for local schools, clubs and charities and given over $80,000 to the local coastguard.

“I would still hope Government will get involved and look harder at what we do and help us to run events like this in the future. Businesses like these are successful because we work our tails off.”

An Internal Affairs lackey entered the fray with a public statement to explain matter (see here).

Internal Affairs Gambling Compliance Director Debbie Despard said spot prizes were still possible for a wide range of events but they had to be conducted according to the law.

Spot prize draws accompanying entry fees involved ‘chance’ and were regarded as gambling under the Gambling Act.

“Non-commercial clubs, organisations or groups can still have prize draws at their contests or tournaments. They do not require a licence from the Department of Internal Affairs if total prizes remain below $5000. If prizes exceed this limit they require a licence. This has been the case since the Gambling Act took effect in 2004,” she said.”

Ah, so things happened on Helen Clark’s watch as prime minister.

Does that surprise anyone?

Let’s hear some more.

“The Department has been working with the organiser of Ruakaka’s Beach and Boat Competition to help him comply and also wrote to a number organisations that do or may conduct prize draws, in order to ensure that they are aware of the law and to offer assistance where needed. This arose from a complaint from a gambling operator. Our focus has been on helping people understand and comply with the Gambling Act.”

So there’s not much evidence of the public being disadvantaged by what is happening in the spot draw business.

But some tosser in the gambling business has complained.

And the department has been galvanised into action.

Despard went on:

“At worst we see some organisations as needing to modify the structure of their prize draws, or to apply for a licence. We are encouraged that many organisations have contacted us for assistance. Where necessary, we have been able to help them adjust their event so that it is compliant. In many cases the event was already compliant.

“To be clear, spot prize draws are still permitted. The size of prizes is an issue because a licence is required if they exceed $5000. Only non-commercial groups clubs and societies can get licences. Commercial organisations cannot. The Act covers a wide range of gambling activities but proceeds from the likes of draws, raffles and lotteries have to benefit the community and not individuals.”

The Despard statement spelled out that there are three classes of gambling governing the operation of prize draws.

Class 1 covers the likes of office sweeps where prizes or turnover do not exceed $500 and all the profit goes in prizes. These may be conducted by individuals.

Only non-commercial organisations such as a club or society can conduct Class 2 and Class 3 gambling. Class 2 is gambling where prizes do not exceed $5000 and income from entry fees does not exceed $25,000. No licence is required. Class 3 is where prizes exceed $5000 and require a licence from the Department.

Higher risk forms of gambling such as pub and clubs gaming machines and casinos are more stringently controlled under the Gambling Act.

The smart thing to do will be to pull the state out of this nonsense.

Let’s see what Chris does.

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