Why South Australia's pokies revenue is falling
Australia's $12 billion pokies industry may be booming – but in South Australia it's going backwards.
The state has just 13,000 of Australia's 200,000 poker machines but for the last few years gamblers in South Australia have been betting less and less on its poker machines. About 1000 pokies are housed in the ageing Adelaide casino with the remaining 12,000 scattered through the state's clubs and pubs.
The fall-off in gambling activity has also caused a headache for the cash-strapped state government with tax revenue from pokies falling short of forecasts.
Poker machine revenue fell 0.5 per cent to $60.7 million in September from $61 million in the year-earlier month with the state government falling short of its budget forecast in 2014-15, reaping taxes of just $287 million.
The two reasons for the drop: soft economic growth in the state because of a declining manufacturing base and a broader switch among punters to gambling online.
But could there be a third factor hobbling growth?
South Australia is the only state in Australia that prohibits gamblers from using notes in machines. That means gamblers use tokens or $1 coins ($2 coins are banned) to bet on the state's pokies.
Buckets of coins
The owner of the Adelaide casino hopes to end the practice of gamblers lugging buckets of coins to play poker machines arguing that punters should be allowed to gamble with notes in line with other Australian states and territories.
Auckland-based SkyCity Entertainment Group has started to lobby the South Australian government to consider amending the law to allow bills, arguing that coins are outdated and not a good image for the city's casino.
"It's just antiquated technology," said SkyCity chief executive Nigel Morrison. "Why should customers have to gamble with coins? When we are trying to promote an international standard casino and players walk in to the main floor they look around and think this is a B-grade or even C-grade property."
The Queensland government controversially allowed gamblers to insert $50 and $100 notes in the state's pokies in a 2013 decision from a prior $20 limit. Investment bank UBS reckons that change in limits has been a boon for casino operators like Echo Entertainment operating in the state.
Punters can still bet up to $10 a spin on South Australia's pokies, higher than most other states and territories in Australia, although this will be reduced to $5 a spin in January 2017.
Mr Morrison pointed to the removal of coin limits in Queensland and the Northern Territory in the last few years which he said had not contributed to an increase in problem gambling.
"It just doesn't seem right that South Australia should be the odd one out."
The Australian Hotels Association which represents pubs and clubs in the state said gambling growth had slowed on pokies in recent years because many of its machines were based on dated technology and punters had voted with their feet.
"The capacity to invest in new machines that you get on the eastern seaboard just isn't there in South Australia," said AHA's state manager Ian Horne. "As a result the revenue figures in South Australia for pokies have been flat for some time."
SkyCity has committed $300 million to the revamp of the city's casino and says it is enjoying a surge in revenue from VIP gamblers flying into the South Australian capital from Asia.
Source: The Sydney Morning Herald, Perry Williams, 16th December 2015
