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Gambling

by David Grant

The first European settlers bet on many games and sports – cards, boat racing and even greasy-pole fighting. By the 21st century Lotto was the most popular gamble taken by Kiwis, although more money was spent on poker machines.


Gambling in the 21st century

Expenditure

Since the first Europeans arrived in New Zealand gambling has been a prominent aspect of daily life.

In 2011 a survey found that in the previous year 56% of New Zealanders over the age of 18 bought at least one Lotto ticket, and 29% of women and 20% of men purchased an Instant Kiwi scratch card. The third most popular form of gambling was gaming machine (pokies) gambling, with 10% of men and 10% of women participating.

Total gambling turnover (the amount wagered by gamblers) rose from $1.073 billion in 1987 (equivalent to $2.084 billion in 2012) to $15.295 billion in 2011.

  • 43.5% was spent on non-casino gaming machines.
  • 22.1% was spent on casino gambling.
  • 20.5% was spent on New Zealand Lotteries Commission products, such as Lotto and Instant Kiwi.
  • 13.9% was spent on TAB (Totalisator Agency Board) racing and sports betting.

Regulation

In 2012 gambling was regulated by two acts.

The Racing Act 2003 set up the New Zealand Racing Board to manage the three racing codes – thoroughbred racing, harness racing and greyhound racing – as well as run the TAB, the sole provider of betting on racing and sport.

The Gambling Act 2003 regulated gaming machines, casinos, New Zealand Lotteries Commission products and all other gambling. Its purposes were:

  • to ensure gambling was fair and honest
  • to ensure gambling profits benefited the community
  • to prevent and minimise harm caused by gambling.

Profits

Every year a proportion of gambling profits funds a multitude of community projects. Trusts that run non-casino gaming machines in pubs and clubs distribute at least 37.12% of net profit to community groups, and casinos distribute at least 2.5%.

Lotteries Commission profits are distributed by the New Zealand Lottery Grants Board. In the 2010/11 year it paid out $124 million to community groups.

Race betting profits were returned to racing and sports.


Cards and games

Early gambling

Recreational gambling in New Zealand has been around since the earliest days of European settlement. Kororāreka (later Russell) in the Bay of Islands was the country’s first town. From the 1830s European sealers, whalers and ex-convicts, as well as some Māori, gravitated to its numerous grog shops, where they drank, sang, brawled, whored and gambled. Card games such as poker and vingt-et-un (pontoon) were particularly popular, but gambling on billiards, skittles and feats of strength was also common.

With the growth of towns and cities, working-class males played, fought and gambled inside and outside of pubs, penny-alley dens, billiard saloons and brothels.

Midnight dash

Sir Julius Vogel, the New Zealand premier between 1873 and 1876, was an inveterate gambler. While he was editor of the Otago Daily Times, he often gambled at the Dunedin Club. Frequently at midnight, or later, a newspaper messenger had to lure him from the card room and tell him the paper was about to go to press and he still had his editorial to write. Vogel would excuse himself and dash off the piece before hastening back to the card table.

Gaming elite

Towns also attracted remittance men, the spoilt offspring of wealthy British families, sent to the colonies to cure them of their reckless, extravagant ways, and supported financially by payments from home. Many continued to gamble to excess. These men often belonged to early gentlemen’s clubs where gambling on cards (including poker, whist and bridge) took place. Billiards was also a prime leisure activity. Merchants and runholders dominated this group. Such men won – or lost – thousands of pounds on these transactions.

Wages deceit

During the 1920s West Coast miners were known to have two wages sheets. The miner kept the genuine copy, and took home the falsified copy, with a smaller total pay, to show his wife. The difference was spent on drinking and gambling. When some wives learned of the deceit they began accompanying their husbands to the pay office.

Goldfields gambling

In 1861 gold was discovered in Central Otago, igniting a gold rush. As relief from their back-breaking work miners gathered in pubs to drink, gossip, play the fiddle, brawl and gamble into the small hours. Poker was their favourite game but whist, loo and forty-fives (an Irish game still played on the West Coast) were popular too. Raffles were keenly patronised and skittle alleys and billiard tables found a ready custom.

Chinese gaming

From the mid-1860s Chinese miners brought their own gambling games – principally fan-tan (which involved a croupier removing beans or pebbles four at a time and punters betting on how many would be left at the end) and pakapoo (similar to Lotto).

As Chinese moved into towns they created ‘gambling dens’, sometimes accompanied by opium smoking. Wellington’s Haining Street, Auckland’s Greys Avenue and an area round Dunedin’s Carroll Street (known as ‘the devil’s half-acre’) were Chinatowns – and gaming focal points.

Shipboard flutter

Passengers on immigrant ships often turned to gambling to relieve the boredom of travel. Working-class men in steerage gambled on cards, dice and roulette. Middle-class passengers entered lotteries, raffles and sweepstakes, betting on such things as how far a ship would travel over a specific time.

Dice and coin games

Dice games became hugely popular. In the game of hazard the operator threw two dice, wagering on what numbers would turn up. The players bet against that possibility at odds determined by the operator.

Meanwhile two-up, easily organised and played at speed, involved gamblers standing in a circle staking their money on whether two coins tossed in the air on a small board (a ‘kip’) would fall heads or tails or one of each.

Servicemen betting

Gambling patterns varied little into the 20th century. First World War soldiers gambled to while away the boredom. The most popular games were two-up (each unit had its ‘two-up king’); housie, the dice game Crown and Anchor, and cards – notably poker and pontoon.

Second World War soldiers also bet on scorpion, camel, donkey and horse racing.

Many servicemen gambled constantly and games were played intensely. A few operators made thousands of pounds out of their fellows – sometimes fraudulently.

Housie

Housie was legalised in 1959. Players bought one or more housie tickets which comprised columns of numbers from 1 to 100. A caller called out the numbers and players marked them off on their tickets. The first person to get a ‘line’ (of numbers) shouted ‘Housie!’ and won the game.

The game became New Zealand women’s most popular gambling activity. Established as a fundraising activity for worthy projects, it attracted crowds containing hundreds of mostly working-class women to hotel bars and community halls.

Card schools

During the late 20th century underground card schools operated in the main cities, run by ‘czars’ who made enormous profits from winnings and loans to feckless punters. By the 1970s there was an ethnic component to some of the larger schools. Wellington’s Greek population engaged in high-stakes poker (where cars or even restaurants could change hands); the Chinese played mah-jong, pai gow and poker. There were also countless informal ‘card schools’ that met socially and played for relatively low stakes.


Sports betting

Early horse racing

Horse racing with its associated gambling evolved as the colony’s most popular recreational activity. From the late 1870s crowds of over 30,000 could pack major race meetings. Bookmakers ran horse-race gambling until 1880 when totalisators (automated betting systems) began arriving on racetracks. Nonetheless, the bookmakers still dominated racecourse betting until they were banned outright in 1910.

For a time, bookmakers continued to thrive, despite their illegality. Renting rooms on main streets, they covered every race meeting in the country, linked to each other and to their regular punters by telegraph and telephone. This gave them an advantage as totalisator bets could not be placed from a distance.

Sweepstake swindler

Sweepstakes were big business at 19th-century horse races. The ‘prince’ of sweepstakes was Wellington barber George North. In 1881 he organised the colony’s biggest sweepstake, worth £4,000 ($624,000 in 2012 terms), on the Wellington Racing Cup. At £1 ($156) a ticket the sweep was quickly subscribed. Soon after, North boarded a steamer to San Francisco with the takings securely tucked inside his waist belt. Punters were angry at the deceit but police could do nothing.

Racing profits

The two decades after the Second World War were the peak of horse-race gambling in New Zealand. There were race meetings every day except Sunday, at any one or more of the 74 racetracks that dotted the country.

From 1921 off-course bookmakers organised themselves through the euphemistically named Dominion Sportsmen’s Association (DSA). The association’s turnover during the 1920s commonly exceeded £5 million per year ($451 million in 2012 terms).

On the racecourse the totalisator became the main source of income for racing clubs. In 1942–43 annual totalisator turnover hovered around £8 million ($653 million in 2012 terms). By 1947–48 it had increased to £24 million ($1,697 million).

Bookmaker profits off the course peaked over the same period, at around £29 million ($2.051 billion in 2012 terms) annually. Many bookmakers flaunted their wealth by purchasing homes in affluent Remuera (Auckland) or Fendalton (Christchurch) and driving late-model American cars.

The TAB

Partly to counteract the bookmakers’ influence a new government-controlled agency to manage off-course betting was created. The Totalisator Agency Board (TAB) began operations in September 1950, and opened its first agencies in Dannevirke and Feilding on 28 March 1951. They quickly became popular, driving the DSA out of business.

In 1961 the TAB made a net profit of £900,000 ($375 million in 2012 terms). This made it the country’s fifth-most profitable enterprise.

Chasing riches

In July 1970, 30,000 punters crowded the Matamata racecourse in queues that stretched more then 50 metres. They were lining up to buy one or more of 65,000 jackpot forms. After six races the sole winner of the $2 jackpot walked away with a staggering $482,687 ($7.2 million in 2012 terms). At that time it was the largest payment for the smallest investment in the nation’s history.

Sweepstakes

By the 1970s the growth of other recreational pursuits saw race meeting and TAB patronage fall off. In 1972 the government responded by allowing sweepstakes on selected horse races. The country’s first legal sweep since 1908 was run on the New Zealand Racing Cup in November. First prize was $200,000 ($2.5 million in 2012 terms). All 100,000 of the $5 tickets quickly sold out.

Jackpots drew huge crowds to some meetings until the government, frightened by the excesses, limited their amount and then banned them altogether.

By then greyhound racing had been given equalisator status (a temporary betting license). It achieved full tote and TAB betting in 1981.

Animal fighting

Gambling on animal fighting has long drawn clandestine crowds. West Coast miners trained fowl (with spurs attached to their claws) to fight in brutal contests until the weaker animal was seriously wounded or killed. Some witnesses were disgusted. Dogs, cats and rats were also put up against each other with equally gruesome results.

New Zealand Racing Board

In March 2003 the TAB merged with the Racing Industry Board to become the New Zealand Racing Board. It controlled all horse and greyhound racing along with the gambling that provided their income.

Other sports betting

The colony’s earliest sporting contests were peppered with gambling. During the 1840s men raced whaling boats, waka, dinghies, scows and skiffs, and bookmakers set odds on the outcomes. On shore the contests involved running races, quoits and skittles, greasy-pole fighting, sack racing and barrow racing.

By the 1860s rifle-shooting, ploughing, wood chopping, bare-knuckle boxing, wrestling, 24-hour walking competitions and even cricket all attracted bookmakers, sweepstake organisers and punters.

Dodgy odds

Late in the 19th century professional sport flourished and gambling on the outcomes helped sustain its popularity. Cycling and athletics were the most common. Promoters and bookmakers would deceitfully ‘ring in’ less well-performing athletes under assumed names and offer attractive bets on their victories.

Rugby was an amateur game, but it too was permeated by gambling, much of it seditious. Players took bets on the opposition and played poorly. Bookmakers also scoured the sidelines setting odds and taking bets from spectators. Only after they were banned did such practices disappear.

Modern sports betting

In 1996 betting on a wide range of sports was introduced at the TAB. The TAB’s racing television channel Trackside (on Sky Digital and Freeview) began in 1992. In 2009 it was joined by another betting channel: TAB TV (on Sky Digital). In 2012 the TAB also operated New Zealand’s only betting website.


Lotteries and raffles

The first lotteries

The New Zealand Company in London ran New Zealand’s first lottery in 1839. It asked punters to take their chances on buying a section of unseen land in Wellington. The company used similar lotteries in its other settlements.

Art unions

Colonial New Zealanders sometimes subscribed to British ‘art unions’ where they invested a guinea or more to be in the draw to win a work of art. New Zealand artists began their own art unions from the 1860s. It allowed art lovers a chance to procure a work of art that they could not otherwise afford.

By the 1870s lotteries were expanding in size and range, and were run by the likes of sports and recreational clubs, businesses and municipal authorities. However, the word ‘lottery’ had an unwanted whiff of gambling, so the term ‘art union’ was adopted as a euphemism.

These lotteries burgeoned in local communities, and 487 organisations applied to run them in 1897 alone. In July 1915 a group of businessmen ran the first national art union, with the profits going to assist wounded soldiers and their dependants. As cash prizes were banned the first prize was a £1,000 gold nugget.

During the 1920s lotteries to raise money for a wide variety of projects became a national phenomenon. Prizes included houses, cars, boats, buggies and animals. In 1925 Canterbury’s cricket and tennis associations ran the largest art union so far. The first prize was a ‘gold nugget’ worth £4,000. By then this was simply a euphemism for a cash payout. More than £20,000 was raised, funding the construction of tennis courts at Christchurch’s Wilding Park and many city cricket pitches.

Posting to Hobart

The Tasmanian Tattersalls Lotteries entered the New Zealand market in 1896. Because its prizes were bigger than those of local lotteries (first prizes in the 1900s reached £20,000) it found an enthusiastic clientele. However, due to lotteries’ illegality, euphemisms abounded. Tobacconists who sold tickets hung up the sign, ‘We post to Hobart’ outside their premises for decades.

Professional organisers

By 1930 nine or ten big art unions ran each year, each earning between £10,000 and £20,000. A key reason for their success was Neil McArthur, a young Wellington draughtsman, who had run a popular Wellington Aero Club lottery. Other organisations soon hired McArthur for his skill, and he persuaded employers’ advocate Bertie Hammond to do the books.

In January 1932 the government appointed Hammond and McArthur Company Ltd to run all national lotteries at a remuneration of £200 per lottery, with the state distributing the profits to worthy causes. It proved to be an agreeable formula, lasting 40 years.

Double bangers

In 1979, to celebrate the 50th year of national lotteries, two $3.1 million ‘Double Banger’ lotteries, the biggest ever, were run. The public response was frantic. On 15 October long queues formed outside tobacconists from 3 a.m. The tickets were gone by late afternoon. Many people missed out. Entertainer Ray Woolf drew the winning $750,000 ticket ($4.2 million in 2012) on his television show on 9 November. Viewer numbers broke all records.

Golden Kiwi lottery

In 1958 the government allowed Hammond and McArthur’s first prize to reach £10,000 ($453,000 in 2012) but that was as high as it got.

Many New Zealanders entered the Australian lottery, Tattersalls, with a prize that reached £75,000 ($3.4 million in 2012 terms). The country was losing £600,000 in overseas lottery sales every year. In response, Minister of Internal Affairs Leon Gotz allowed a regular national £30,000 ‘Golden Kiwi’ lottery with a first prize of £4,000 ($162,000). It would be state-run and organised by McArthur.

When the Golden Kiwi launched in 1961 demand was phenomenal. Queues lined the streets before daybreak to buy tickets from tobacconists. By February 1962 there had been seven Golden Kiwis, with five million tickets sold. In the first year they netted a profit of £1.4 million ($56.7 million), and the government’s take was £465,000 ($18.8 million). In 1964 the national lottery introduced ‘Mammoths’ (with a first prize of £60,000), followed by ‘Kiwi Jackpot’ and ‘Kiwi Super’ lotteries. In 1973 McArthur retired and accountant Warwick Kiddle replaced him.

When interest waned in the national lottery the prizes went up. In November 1977 Kiddle ran the country’s first $500,000 lottery. The $10 tickets sold out within a week. The lotteries funded good works and charities. In 1982–83 a record $18 million went to the arts, sports, recreation, welfare, community activities and medical/scientific research.

Raffles

For decades raffles were the most common way in which individuals, families, municipalities, clubs, schools and Catholic parishes raised money for personal or altruistic purposes.


Lotto, pokies and casinos

Lotto

By the early 1980s the insatiable demand for lottery funding led Minister of Internal Affairs Allan Highet to promote a new numbers game: Lotto. However, Prime Minister Robert Muldoon was vigorously opposed to it on the grounds that it would devastate the racing industry.

The initiative was revived after a change of government. In early 1986 the cabinet agreed to introduce it subject to a parliamentary conscience vote. In April 1987 Parliament voted 47 to 20 in favour of Lotto. The state-owned New Zealand Lotteries Commission was charged with running the venture.

The game was an immediate success. On the day of the first draw (22 July 1987) crowds packed Lotto outlets ensuring gross receipts of more than $2 million – and a first prize of $359,808 ($687,100 in 2012 terms).

Within six weeks a million New Zealanders were playing the game. By August 1989 the country had more than 1,000 Lotto outlets, and sales were exceeding $5 million weekly ($9.7 million in 2012). In its wake Golden Kiwi sales declined and the commission terminated Golden Kiwi in 1989.

Big wins

In November 2011 a Greymouth couple won an $8.4 million Lotto prize. Such was their excitement the winning ticket became soaked with sweat. ‘I wrote the numbers on the top of the ticket and started checking them off – I checked off about two, and then the winning line just seemed to leap out at me, it was surreal,’ said one of the couple. 1 The largest-ever Lotto prize (to 2012) was $36.9 million, won by a Masterton syndicate.

Scratch games

To replace the Golden Kiwi and raise money for the Auckland 1990 Commonwealth Games, the Lotteries Commission introduced Instant Kiwi scratch cards in 1989. The game’s appeal lay in its cheapness, immediacy and favourable odds, there being a one-in-seven chance of winning a prize. The $21 million Commonwealth Games fund was reached in three months. Instant Kiwi turned over $135 million in its first year.

New games

To maintain interest and increase sales the Lotteries Commission developed new games and methods of play.

  • In April 1993 Lotto Strike was introduced.
  • In October 1994 the first daily Keno began.
  • In February 2001 Powerball commenced.
  • In October 2005 the midweek Big Wednesday started, providing punters with the chance to win $2 million in cash and luxury cars, launches, travel and holiday homes.
  • From 2008 these and other games could be played on the commission’s website.

During the early 2010s multi-million dollar jackpots propelled Lotto sales to new heights. Sales for Lotto, Keno and Instant Kiwi in the 2010/11 year reached $925.9 million, of which $498.4 million went in prizes, from 26,954,853 tickets.

Billion-dollar spenders

In the 2010/11 year close to a billion dollars was spent on Lotto, Keno and Instant Kiwi. This equated to spending of $210 by every man, woman and child living in New Zealand.

Distributing profits

The system for distributing Lotto and Instant Kiwi profits was managed by the New Zealand Lottery Grants Board. It funded community initiatives that neither the government nor the private sector would provide, but which were so valued by communities that they volunteered time and labour for their realisation.

Pokies

During the late 1980s, befitting the Labour government’s deregulatory ethos, there was a dramatic expansion in the gambling landscape. In 1988 the government legalised what New Zealanders colloquially called ‘pokies’ (electronic gaming machines, sometimes called poker machines or one-armed bandits) for clubs and hotels.

Research in the 1990s found pokies were associated with more criminal activity than any other form of non-casino gambling, including misappropriation of funds, theft and fraud. In 2012 Māori Party MP Te Ururoa Flavell was concerned that venues’ profit margins were too high. He wanted greater community say over where pokie venues were located. He introduced a private member’s bill to reform the system.

Casinos

In 1989 the government allowed the introduction of casinos. Christchurch opened the first in November 1994. Auckland followed with the SkyCity casino in January 1996, and since then smaller operations have opened in Hamilton, Dunedin and Queenstown. Casino licence applications and renewals are determined by an independent statutory body, the Gambling Commission.

Footnotes

Opponents and social impact

Early opponents

Until the mid-20th century the Protestant church and women’s groups like the Women’s Christian Temperance Union were gambling’s most strident critics. Gambling ran counter to the traditional reformed Protestant abhorrence of unearned income. Many High Church Anglicans and Roman Catholics had a more liberal outlook.

Gambling’s close association with drinking and prostitution was also thought to threaten public morality. Women’s opposition often came from the misery of living with husbands who were perpetually drunk and penniless due to gambling. From 1898 church leaders formed anti-gambling leagues in the main cities to ban gambling and games of chance.

Race to ruin

In 1885 the veteran politician Sir William Fox contended that horse racing demoralised, pauperised and ruined thousands who ‘might otherwise be our best colonists.’1

Regulation

Due to its perceived detrimental effects, the Gambling and Lotteries Act 1881 banned public betting. But following a public backlash over the arrest and trial of a group of Chinese gamblers in Wellington – who many felt had been unfairly targeted – police enforcement became less assiduous and the act was often ignored. Its ineffectiveness was recognised in an 1885 amendment that allowed small racecourse sweepstakes.

By the 1900s public opposition to gambling had strengthened and in 1907 gambling was confined to racecourses. In 1910 a further amendment to the act banned bookmakers from racecourses and other sporting events. This was a high point of the anti-gambling movement, but the effect of the changes was to drive off-course gambling underground until the creation of the Totalisator Agency Board (TAB) in 1950.

Lotteries

Protestant churches also led opposition to the 1960s introduction of state-run Golden Kiwi lotteries, with many urging their members not to buy tickets and refusing to accept lottery grants. However, by the late 1970s the Presbyterian Church had conceded that buying a raffle ticket for a worthy cause caused little harm.

Stealing to gamble

Some problem gamblers turn to crime to continue gambling. In 1992 the prominent Upper Hutt lawyer Keith Edwards was sentenced to six years in jail for stealing $3–4 million in client funds to feed his gambling habit.

Problem gambling

From the 1980s opposition to gambling was motivated less by religious or moral convictions than by a desire to relieve its harmful social impacts on individuals, their families and communities. In 1988 the government funded (from a gambling levy) the creation of the Compulsive Gambling Society to help people experiencing problems with gambling. It started as a telephone counselling service and has since expanded to include face-to-face help as well as services aimed at Asian and Pacific communities. In 2001 it became the Problem Gambling Foundation of New Zealand. Other problem gambling organisations include the Gambling Helpline and the Salvation Army Oasis Centre.

Statistics

In 2012 the New Zealand Health Survey found that the proportion of New Zealand adults who took part in gambling activities declined between 2002–3 and 2011–12, from 68.7% to 52.1%. The largest fall was for Māori, whose gambling rate dropped from 72.8% to 53.3%; the smallest decline was for Asians, from 39.7% to 37.3%.

According to early-21st-century gambling research:

  • $5.2 million was spent on gambling in New Zealand every day.
  • Between 10,000 and 60,000 (0.3% and 1.8%) of New Zealand adults have gambling problems.
  • Pokie machines were concentrated in high-deprivation areas and were the most harmful form of gambling – one in five regular pokie players was likely to have a gambling problem.
  • Māori and Pacific people were more likely than other groups to be problem gamblers and suffer gambling-related harm.

Enduring attraction

While gambling harmed problem gamblers and their families and friends, most New Zealanders gambled without ill effects – other than an occasional hole in the wallet. Research has revealed the opportunity to win prizes and money was the main attraction, followed by the excitement and challenge of gaming activities.

With ‘fashion in the field’ parades at major race meetings and images of dapper ‘high rollers’ at casinos, the industry has gained a glamorous edge that attracts both regular punters and those wanting an occasional fun day or evening out.

Footnotes
    • Quoted in David Grant, On a roll: a history of gambling & lotteries in New Zealand. Wellington. Victoria University Press, 1993, p. 63. Back

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How to cite this page: David Grant, 'Gambling', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/gambling/print (accessed 23 November 2017)

Story by David Grant, published 5 Sep 2013