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Casinos and Loan Sharks

Tag: Welfare

Madam Speaker,

The Green Party has been alarmed this week to hear new information about the prevalence of loan sharking inside New Zealand's casinos.

The Christchurch Press on the weekend did a sterling job with its revelations of the resignations of several senior staff, loan sharking in the casino's VIP lounge, and allegations of irregularities in prize draws and discrepancies over gaming returns. The Press alleged that loan sharks based at the casino were charging interest rates of 6% a week, and that there were connections with loan sharks in Macau and with the ownership of local brothels.

This was bad enough, but since then we have learned that loan sharking is endemic in casinos around the country, and even in some pokie parlous as well. For example, there are believed to be around 10 loan shark groups working at Sky City in Auckland, both on the ground floor and in the VIP lounges. It has been reported to me that the minimum loan in the VIP area is $10,000, and that some gamblers are actually introduced to the loan shark by a casino dealer. The loan shark has then visited the gambler's home to ensure that he or she has a family that can be threatened.

Any default on the loan or late payment can lead to the person or their family being seriously threatened. Loan sharks also target Asian students on the ground floor of the casino where the minimum loan is $1000 to $3000. When some of these gamblers get into trouble with their loans they risk being recruited as agents for the sharks, perpetuating the cycle.

It is reported that sometimes the dealers in the casinos are actually referring the gamblers to the loan sharks for help. I have also heard that women who get badly into debt have been forced to work in massage parlours owned by loan sharks or their associates to work off their debt.

The Green Party has serious doubts about whether the Government is taking the nature and extent of this problem seriously enough. The responsible Minister, the Hon Rick Barker, has promised that his Department will investigate accounts of loan sharking at the Christchurch Casino as recently revealed in the Christchurch Press. However, this is simply not good enough.

In relation to the pokie venues, in February of this year the Department of Internal Affairs gaming investigations unit was criticized by the Auditor General for doing too few audits of non casino gaming operators. In relation to the casinos it has also been reported, again by the Christchurch Press, that according to someone with many years of experience in the casino business, that all the Departmental inspectors do is, quote "come in, eat our food (the inspectors eat for free in the casino staff canteen) read our newspaper, and then to home not having done very much."

What is really needed is not another DIA investigation but a full public enquiry, where victims of the loan sharks — and staff and management in the casinos — will have the ability to speak out freely without fear of retribution from either the loan sharks or their employers, as the case may be.

The Green Party remains concerned that perhaps the Government doesn't realize the nature of what they are dealing with when it comes to the gambling industry. The reality is that the profitability of casinos and pokie parlours comes in large part from desperate people who will do almost anything to get more cash to keep on gambling.

All over the world gambling outlets, legal and illegal, are vulnerable to exploitation by criminals — just because we're an isolated nation in the south Pacific doesn't make us an exception. The Government must take action now to fully investigate what is happening with loan sharking and associated criminal activity in casinos and class 4 venues.

This inquiry should cover the whole gambling sector — and the whole country - not just part of it. Evidence should be invited from all affected parties, and people enabled to speak in confidence and anonymity. The Government should commit to taking all necessary actions following such an investigation to make sure abuses are brought to an end and that casino and pokie operators are conscientious and careful in adhering to the Gambling Act and associated regulations.

Dr Cullen told this House a few weeks ago that the Government has $115 million invested in Sky City. Pending the withdrawal of Government from investments of such a ubious nature, the least he and his colleagues can do is ensure this and other gambling operators foster as scrupulous a gambling environment as possible.

Read Sue's media release on this issue.
Read the Minister of Internal Affairs' responses to Sue's Oral Questions.


Parliament, General Debate
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