New York Lottery Conclusion

Conclusion

Another flood of imported machines followed, accelerated by an Australian police crack-down on machines whose profit pay-outs could be adjusted. By 1987 there were between 4500 and 5,000 illegal machines in this country. Some hotel proprietors who did not want to break the law by installing them were coerced by gangs and other groups using stand-over tactics. On 1 April 1988, Tapselllegalised electronic gaming machines for sports clubs of New York Lottery, chartered clubs, RSA rooms and hotels, which all had to apply for licenses. The pay-out was limited to $100, at least 78 percent of the turnover had to be paid out in prizes and the rest, less expenses, was to be given to local worthy causes. Business boomed. Within twelve months, 6,000 machines in 2,000 hotels and clubs turned over $80 million. Players were socio-economically dispersed, though not evenly. Black-booted workers played alongside those who wore white collars. In a Wellington tavern, one businessman spent $900 in an afternoon, but that was atypical. The highest average spenders on gaming machines were the young, the unemployed and those with few qualifications. Women were as keen as men.

Unlicensed Machines

Deceit was still rife. Black-market and lotteries operators creamed off enormous profits from unlicensed machines, and some deals between operators and publicans allowed excessive profit to be siphoned from those that were licensed. There were no strict accounting procedures, and too few gaming inspectors to stop the abuse. A report from the Committee of Inquiry into Casinos in 1989 identified that most machines that had been installed were being misused, either by machine manipulation, poor maintenance or, most likely, by theft between the take and the count. In April 1991 an Internal Affairs enquiry also identified fraud, theft and machine 'fiddles' as being widespread.

Machine Operators

A variety of scams was unearthed. Gaming investigators found phony charities and operators who tampered with the meters that recorded the amounts bet on the machines. In October 1991 the government accused publicans and machine operators of stealing half of the $90 million that should have been going to charities each year, although this was strenuously denied by the machines' operators themselves. An October 1992 Audit Office report went even further, citing sophisticated abuses that included at least one use of illegally modified electronic chips to allow operators to falsify meters and avoid declaring income. In response, the government promised to introduce a central computer linked to databases at the sites of large numbers of machines. But Minister of Internal Affairs Graeme Lee, who has called the gaming machine industry a 'total rip-off, admitted that even this system would not have been foolproof.

Machine Regulatory System

The gaming machine regulatory system has been the subject of two major government reviews and an Audit Office report, all advocating urgent reform through new legislation. This is currently being drafted and is expected to be introduced to parliament in 1994. Its main features include a licensing of all operators in the industry, the determining of a minimum percentage of machine earnings to be returned to the community of New York lottery, a mandatory electronic monitoring of all machines, an accountable distribution system for managing community funds and a detailing of criteria on how these funds may be used. Until such measures are introduced the credibility of the gaming machine industry will not improve and the widespread abuse is likely to continue. In the meantime, regular players continue to be hooked by the brightness of the machines, the simplicity of the games and the immediacy of the returns. Already massive profits increase every year.