Faced with falling revenue and rising compliance costs, the $1 billion charitable gaming trust industry is scaling back the number and size of grants to community organisations in desperate need of cash.
Figures released by the Department of Internal Affairs reveal gaming machine spending for the first three months of this year fell $22 million - or almost 10% - when compared with the previous quarter.
Lion Foundation chief executive Phil Holden, of Auckland, said the recession meant people were spending less discretionary income on gaming machines and "it is putting pressure on the funding pool".
The introduction of player information displays (PIDs) meant the trust had to spend $7 million to update its 2000 gaming machines across the country before a July 1 deadline and that would have a major impact on grants, he said.
The trust had cut its usual grant to the New Zealand Symphony Orchestra as it received government assistance, preferring to fund community organisations hit hard by the recession, Mr Holden said.
By law, trusts were obliged to return 37.12% of gaming profits in grants to the community, but the recession coupled with compliance costs would see the Lion Foundation returning 38% this year, down from 45% last year.
Southern Trust chief executive Karen Shea, of Dunedin, said the trust was faced with an increasing number of organisations applying for grants as traditional funding streams - from corporates and community trusts - felt the pinch.
Pub Charity chief executive Martin Cheer, of Wellington, said the $1 billion gaming industry had spent "hundreds of millions" in compliance costs, which could have gone to the local community.
"There is less in the pot and less to come out," he said.
The number of gaming machines had dropped from 25,600 in 2004 to 20,000 machines in 2009, forcing a reduction in the number of grants available to community organisations.
Problem Gambling Foundation spokesman David Coom said the recession meant more organisations were after gaming trust funds, but it was pleasing organisations such as the Salvation Army and the Methodist Mission were refusing gaming trust money.
CanTeen Otago-Southland team leader Sharon Conaboy said a grant of $4600 from Pub Charity helped 40 CanTeen members attend a summer camp earlier this year and "we are acutely aware funding will be harder to get".
"We will still put the same amount of applications in, but we expect to be declined more given the state of the economy."
Kevin Haunui, general manager of the Funding Information Service - which collects and distributes information about funding to the voluntary sector - said the challenge for gaming trusts was how they would respond to the "challenge of funding, because this is the time when it is most needed".
