He woke up in the morning and resolved: ‘I will not gamble today’. But his addiction took him back. Michael Demchy dropped more than one hundred thousand dollars in to pokie machines. Many other New Zealanders give up hundreds of millions of dollars more each year. LAWRENCE SMITH and AMANDA SAXTON report on a story of free will, flashing lights and what's good for the community.


It's 1.16pm on a Thursday and the gaming room of a South Auckland hotel is full. Eighteen pokie machines - with names like Foxy Fortune - chirrup, tinkle, and flash. Bursts of melody indicate success as streams of coins spew out a chute - winning back a fraction of the dollars invested can be considered a victory in pokie-land.

It's impossible to tell what time it is as there are neither clocks nor windows in the Otahuhu hotel's pokie room. That's standard for gaming rooms. So is being at full capacity. The waitress at a pub down the road says people are lined up outside waiting for her to open at 9.30am every day. She says the only "emptyish" spell is when some punters leave to pick their kids up from school.

Former pokies addict Michael Demchy, from west Auckland, knows the scene. His decades-long battle to escape it sapped his self control and made him ask: “Who’s in charge of Michael?”

“I’ve got free will, supposedly, and yet gambling cut through my free will.”

The 53-year-old says he would wake up announcing ‘today I will not gamble’, yet end up on autopilot, veering into pokie venues and feeding hundreds more dollars into the machines.

“I’d be going to see a friend or something, and I’d go off course,” he describes. “I’d go into the carpark of a bar and as I’m screaming at myself with my rational brain to walk out, I’m still walking in. And I’m still putting money in the machine. And I’m still pushing the spin button. And it’s all just happening.”

There's a huge demand for pokies - not only from punters, but from those benefiting or hoping to benefit from the more than $200 million per year of money from people like Demchy that gets reinvested into communities by gaming trusts.

Thousands of charities get funding from the trusts, including Riding for the Disabled, assorted women’s refuges, the New Zealand Canoe Polo Association, and the Sir Edmund Hillary Outdoor Education Trust.

Gaming trusts and charities take the line that gamblers do play the pokies out of free will, so there’s little ethical issue in taking their money. And where there are problem gamblers, the industry works hard to minimise the damage.

But critics argue moral jeopardy is at play. That even though only 2.5 per cent of New Zealand’s population are likely to become problem gamblers and 40 per cent of money from pokie machines finances good works, it is ethically perverse for charities to benefit from people playing machines designed to be addictive.

Visually, pokies are themed to appeal to a range of characters: those who like fast cars with Vegas showgirls, or marine creatures, or crystals in the sunset and soulful wolves are well-catered to.

A woman at the Otahuhu hotel named Margaret, who was in her 50s and originally from Samoa, split her $20 bills across multiple machines, switching seats every time a new one became available. She said she usually liked a crystal-centric pokie, but that it hadn’t been treating her well of late.

"I want to find a new lucky one," she says. She doesn't want to say how much she spends or makes on the pokies.

"It's not a problem though, I'm ok," she smiles.

Margaret is there again at 6pm.

There's a screen on a wall displaying the venue’s last jackpots. Someone won $952.10 that morning, on machine number 8, and Margaret says she knows someone who made “more than a grand” once.

Mike Cassidy, who is the manager of the Mangere Cosmopolitan Club in Auckland, says staff at his venue make a note of everyone in the gaming room at 15-minute intervals.

“If anyone is spending too much we will talk to them. If they have any problems we are able to point them in the right direction and get help,” he says.

“If we find they are not telling the truth, we have the power to exclude them, which we do.”

Demchy, who has been through extensive therapy for his addiction, says gambling led him to lie to friends, family, and colleagues in order to get money.

He reckons he’s fed “somewhere in the low six figures” into pokies and while he’s had the odd win, he hasn’t profited a cent.

“Financially my life got rather dodgy - there was a lot of robbing Peter to pay Paul,” he admits. “I wanted to go gambling to get money so solve the problems that gambling was creating.”


Public health academic Dr Charles Livingstone, who heads Monash University’s gambling and social determinants unit, is an expert on pokie machine addiction. He says the machines have been honed over 120 years to become as addictive as possible - and “really substantially alter how your brain works”.

He often gets asked 'why people would use these stupid machines?'

They don't do it to make money, he says, but to get the same dopamine rush as a cocaine addict - and to get into what's been dubbed 'the zone'.

Getting into the zone rings true for Demchy. Before hitting it, he said adrenaline would throb through his veins as he willed the machine to give him another pyramid (his lucky machines featured pharaonic symbols). Then it was “the biggest buzz you can ever have”.

“You feel invincible, you feel like nothing can touch you,” he says. “You feel like the machine is your greatest friend.”

Livingstone has a pokie machine named Dolphin Treasure, whose makers are being sued in Australia over the machine's alleged deceptiveness, in his office. He pulled it apart to learn how it worked and what, exactly, created the zone.

He says the machines exert a number of psychology 101 tricks on the mind - operant and classical conditioning for example - that teach behaviour seen in problem gamblers. He compares gamblers with lab rats, pressing buttons to get a reward.

"If you give [a rat] a reward every second time it presses the bar, it gets bored and doesn't do it anymore," he explains. But if you make that reward intermittent and unpredictable then the rat will sit there pressing the bar to exhaustion."

In a pokie machine, intermittent and unpredictable rewards get combined with the Pavlov's dog phenomenon. Rewards - be they a tasty snack or stream of coins - are paired with particular neutral stimuli: in the canine's case the sound of a bell, in the gambler's case it might be a major chord melody or slew of pyramid symbols. Pretty soon the dog salivates at the chime of a bell, and the gambler gets a dopamine rush via the melody and/or bunch of pyramids on their machine's virtual-reels.

This conditioning makes the brain fall for outcomes dubbed losses-disguised-as-wins and near-losses.

Losses-disguised-as-wins are when you bet, say, a dollar and get 30 cents back. The machine trills, lights flash, diamonds may cascade across the screen - you've won 30 cents, not lost 70! Or so players are conditioned to think, says Livingstone.

Near-losses happen when you get four out of five pyramids, for instance. It looks like you've almost won, though due to modern machines’ virtual reels you're really nowhere near. The physiological effect is very similar to a win-proper and, buoyed up by dopamine, you play on.

Livingstone found trying to figure out a machine’s odds was futile for gamblers. Virtual reels do not have an even number of symbols, equally spaced apart. There might be 30 on the first two, 35 on the next two, and 64 on the last. There could be seven pyramid symbols on the first four reels and only one on the last, giving the impression pyramids are plentiful but making it incredibly unlikely to get a line-up of five for the jackpot.

"The mere fact of the reels spinning is an illusion because as soon as you push the button, the machine knows exactly what the outcome is," Livingstone says. "The fact that it takes a couple of seconds for it to spin around and stop is just adding to that illusion, and indeed adding to the sense of pending success."

He believes pokie machines are as addictive as alcohol and drugs.

“Anyone stressed is prone to it - [for the] comforting factor, relief from the travails of the world,” he says.

By design or chance, those prone to becoming problem gamblers often have the easiest access to pokie machines — something Livingstone reckons is another unethical side to the industry.

Most of Auckland's 3,565 pokie machines are clustered in the low socio-economic south, where levels of income and employment are below the city's averages. These suburbs also house high numbers of Māori and Pacific Islanders — who the Problem Gambling Foundation say are over three times more likely to become problem gamblers than the average adult.

To illustrate: the local board areas of Manurewa and Ōrākei have roughly the same population, 82,000 and 80,000 respectively. Manurewa, in the heart of south Auckland, has 162 pokie machines that kept $3,908,000 of punters' money between July and September last year. Upmarket and leafy Ōrākei in Auckland's east, however, has less than half that number of machines and they reaped a third of Manurewa's pokie hoardings over the same period. Manurewa is made up of 33 per cent Pacific Islanders and 25 per cent Māori, while Ōrākei is just three per cent of the former and  five per cent of the latter.


If pokie machines were eliminated tomorrow, former Internal Affairs Minister Peter Dunne says there was no way the government could make up the resulting cavernous hole in community funding. He credits gaming trusts with giving many of the country's charities life in the first place; they didn't, and couldn't, exist prior to funding from pokies.

Dunne says regulating the industry was a "delicate balancing act" between minimising problem gambling and maximising the funding of good works.

"One one hand I'm sure there are people in the community who'd say it was great if the pokie industry was stamped out," he says. "But they might be the same people who'd say 'so how come my local theatre or swimming pool isn't getting support for its activities anymore?’”

Instead of hastening their demise, Dunne says pokie machines should be milked while they're still here because their future is, in fact, in jeopardy. Not only because of councils' sinking lid policies - which stop existing pokie venues from relocating or buying more machines, and ban consents for new venues — but because of changing technology.

He believes online gambling and gaming options will eventually spell the death of the physical machines in pubs, though couldn't say how long that was likely to take.

“You won't hear it spoken, but there is a feeling we should in fact make hay while the sun shines,” says Dunne.

Charitable organisations take money from gaming trusts for two simple reasons: it's legal and without it, they'd struggle or fail to function.

Wellington-based food charity Kaibosh's general manager Matt Dagger says that while he wasn’t entirely comfortable using them as a source of funds, without the trusts Kaibosh wouldn't survive.

Kaibosh redresses the imbalance between food surplus and scarcity in the capital. They take produce that would otherwise be binned - from supermarkets, orchards, and factories, for instance - and give it to community organisations. Those organisations might combat food poverty directly, or could provide budgeting advice, healthcare, or social workers - Kaibosh's rule is that they're helping New Zealand's most vulnerable towards independence.

"We have to take money from sources that at times may be …", he trails off. "Well, we have to make difficult decisions about our funding because a lot of people rely on us."

Dagger has seen how food motivates our most vulnerable: "It's the conduit that often brings people into this sphere of groups that can help them in the first place," he says.

Another recipient of pokie money is Aktive, a sport-focused charity targeting under-active Aucklanders — in Indian and Pasifika communities, for example — and supporting Auckland's regional sports trusts, which in turn support school sports.

Aktive runs programmes like HERA, which aims to get girls who face barriers to playing sports involved in physical activities. HERA would be scrapped without money from pokie machines, says chief executive Sarah Sandley.

She reiterates the utilitarian thinking behind taking money from gaming trusts versus steering clear of them in defence of problem gamblers: "It's which is the greater good?"

"Our objective is to do the best job we can to get the maximum amount of people leading healthy, happy lives in Auckland,” she says. “Also, [playing the pokies is] a lawful activity and it's highly regulated.”

In fact, says Bruce Robertson of the Class 4 (non-casino) Gaming Working Party, New Zealand has “probably the most robust problem gambling treatment system in the world”.

“Yes [problem gambling] is an issue but the regulations, the act and the industry is working very hard to ensure that the money is not coming from problem gamblers.”

He says a person can spend a lot of money on gambling without being a problem gambler.

“There are a noisy minority who are anti-gambling and get a lot of media profile. Whereas the recipients and the people that benefit from that really don’t get a lot of profile.”

The regime is different for casinos - pokie machines account for about half of SkyCity’s profit - but it makes a similar defence to charges of addiction among players at its venues.

According to SkyCity chief executive Graeme Stephens, gamblers at their casinos will experience some kind of interaction with staff every hour. And every 20 minutes or so, the machine itself tells the gambler how much they have won or lost, how long they’ve been playing and offers the opportunity of cashing out.

A lot of people come back to SkyCity repeatedly without being addicted to gambling, Stephens says.

“They wouldn’t keep coming if they just came here to lose every time and took out nothing in between. It’s a form of entertainment.”

Still, the proceeds of gambling remain off-limits for some. Islamic groups, for example, are noticeably absent from the lists of pokie machine grant recipients. President of the New Zealand Muslim Association Ikhlaq Kashkari says this is because gambling is forbidden in the Koran. His is one of a handful of organisations taking a moral stand against pokie funding.

Another is Wellington's Downtown Community Mission (DCM). Its CEO Stephanie McIntyre says working with poor and marginalised Kiwis made her believe that accepting money from gaming trusts was "contrary to the narrative of helping many of these people".

DCM aims to end homelessness in Wellington and McIntyre says the last thing she wants is for her staff to be advising a problem gambler - who's admitted to losing all of their money through pokies - while thinking 'well, their money has come directly into my wages'.

"That's just not a healthy working dynamic for us at all," she says. "Ethically, we think [pokie machines] are a flawed product because they are designed to be addictive, and therefore that their model of community funding is flawed."

McIntyre is quick to note she intends no criticism towards organisations that do take money from gaming trusts. As someone on the fundraising frontline, she says she "deeply" understands the struggle to finance good works in New Zealand. She hopes, however, to set the example that charities do not have to rely on pokies.

"It is tough," she says. "But once you've made the choice to not take pokie money … well, we've found necessity to be the mother of invention."



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