Gambling pays off ... for Australian governments
State and territory governments increasingly rely on gambling tax for revenue, which helps explain why Australia is currently going backwards on the issue despite clear evidence of a public health threat, writes Mike Steketee.
PHOTO: The gambling industry has pressed home its advantage in recent years.
(Joe Raedle/Getty Images: AFP)
Two weeks ago, the Baird Government in NSW introduced changes to make life easier for serious poker machine players.
That is part of a trend, with governments in Canberra, Queensland and the Northern Territory going down the same path. After its comprehensive demolition of the Gillard government's reforms to tackle problem gambling, the gambling industry has pressed home its advantage by extracting further concessions to increase its profits, guarantee its further expansion, and increase the misery of the estimated 115,000 mainly low-income Australians with a serious gambling addiction - one mostly caused by the pokies.
However, there are signs of pushback. The Alliance for Gambling Reform has been formed to co-ordinate the activities of church and community groups who speak for the 70 per cent of Australians who said in 2011 that gambling should be more tightly controlled.
Separately, Neil Lawrence, the ad man who created the Kevin 07 campaign, has left a significant legacy after his sudden death this week in the Maldives: a powerful documentary, scheduled to be shown on the ABC, revealing how pokies are specifically engineered to encourage addiction.
In the meantime, as a result of the most recent changes, gamblers in NSW clubs can now store $5,000 in an account or a smart card - a 25-fold increase from the previous standard limit of $200. As well, they can receive up to $5,000 of their winnings in cash, whereas previously amounts over $2,000 had to be paid by cheque or electronic funds transfer.
Monash University's Charles Livingstone, an authority on gambling issues, says it is hard to fathom why a player would want $5,000 so readily at hand unless they had a very serious issue with poker machine gambling. He describes the other measure - raising the threshold for cheques or EFT to $5,000 - as "a recipe to ensure that problem gamblers ... simply pour their winnings back into the machine ASAP".
But wait, that's not all. In what the government argues is a counter-balance, there is a reduction from $10,000 to $7,500 in the maximum amount pokie players can insert and store in machines and an increase from three to six months in the minimum period problem gamblers can ban themselves from venues. If that looks like tokenism, that is because it is.
Livingstone told me that the reduction from $10,000 to $7,500 is meaningless:
This is supposed to be a harmless entertainment. Why on earth would you need to put $7,500 in a poker machine in a club or pub if it were genuinely merely harmless fun? The only impact of this is to make money laundering slightly more difficult, but only slightly.
He describes self-exclusion as a useful strategy for a small number of people, but says it is far more honoured in the breach than in the observance.
The changes stem from a pre-election commitment by the NSW Liberals and Nationals to secure the support of Clubs NSW, the most powerful part of the lobby that mounted an expensive campaign to torpedo the Gillard government's plans for gambling reform. The measures are spelled out in a memorandum of understanding that also includes a promise to "retain existing gaming machine operating conditions", with any proposals for change requiring "rigorous assessment" and consultation.
In other words, don't dare lift a finger without telling us or we'll hit you with another campaign. Needless to say, the public were not party to this agreement.
There are some common themes in the backsliding by governments. In Queensland, the Newman government also changed the rules to allow winnings of up to $5,000 to be paid in cash. Previously, jackpots could only be paid out by cheque and the cheque could not be cashed at the gambling venue for at least 24 hours - tougher rules than those that used to apply in NSW. Like the Baird Government, the Newman government justified this and a raft of other changes in the name of reducing red tape.
Livingstone and his Monash University colleague Louise Francis had a different explanation in a report last year commissioned by the Anglican Church:
This is clearly in the interests of EGM [electronic gaming machine or poker machine] venue operators and against the interests of people experiencing issues with gambling... In our opinion, this is a wholly detrimental measure that cannot be justified on 'red tape reduction' principles. Instead it appears intended to increase the likelihood that EGM users, especially problem gamblers who win substantial amounts, will, in all likelihood, lose those funds at the same venue.
The Queensland changes also increase the number of poker machines allowed under a club licence from 280 to 500, with a maximum of 300 at one venue. Livingstone and Francis said the likely effect would be to increase the average size of venues with poker machines and that it was well established that larger establishments generated more revenue per machine. "There is significant potential for exacerbating gambling related harm in vulnerable communities as a result of increasing allowable machine numbers in venues," they said.
Last December, the Northern Territory Government announced an increase in the number of poker machines allowed in hotels from 10 to 20 and in clubs from 45 to 55. What of the $150,000 donation by the Australian Hotels Association to the governing Country Liberal Party before the last election? We have the word of Gaming Minister Peter Styles that it did not influence the Government's decision.
These measures are on top of the Abbott Government's repeal last year, with Labor's support, of the few measures that survived the onslaught from the clubs on the Gillard government. They included limits on withdrawals from ATMs, the installation of so-called pre-commitment technology on replacement poker machines so as to allow players to nominate beforehand the maximum amount they were prepared to lose, and a trial of a mandatory pre-commitment scheme.
Together, these decisions represent a big step in the wrong direction at a time when studies by the Productivity Commission and others have confronted us with the reality of problem gambling - bankruptcies, family break-ups, crime and suicide. Addiction to gambling is as much a public health issue as smoking or drug addiction. What governments have done is akin to re-introducing smoking in restaurants and bars.
Total gambling expenditure per head in Australia grew after inflation from $577 in 1986-87 to $1,179 in 2011-12. That meant total gambling losses of $20.5 billion in 2011-12, 84 per cent of it on gaming, with the rest on racing and sports betting. Considering Australians spend more per head on gambling than any other country, why are governments encouraging further growth of a harmful industry?
Because government policy on gambling is compromised on multiple fronts. State and territory governments increasingly have relied on it for revenue, with their takings almost doubling after inflation to $5.5 billion in the 25 years to 2011-12.
With the growth of the industry has come the increase in the power of the clubs and hotel lobbies, and that power has included making political donations. In the Northern Territory, the Australian Hotels Association gave the same amount - $150,000 - to the Labor Party before the last election as to the Country Liberal Party.
The last time there were meaningful measures to control gambling was in Victoria more than five years ago. They included a $5 maximum bet - a change Livingstone says was introduced without industry opposition. He adds that a $1 maximum would reduce the harmful effects of gambling, given that 80 per cent of problem gambling stems from poker machines.
Among the politicians, only independents like Nick Xenophon and Andrew Wilkie are prepared these days to stand up to the gambling lobby. Wilkie put a bill for $1 bets, among other measures, before Parliament last November but the Abbott Government refused to allow it to come up for debate.
Xenophon plans to introduce into the spring session of Parliament a bill to apply restrictions to online gambling. This is emerging as a threat, even while the much larger one from poker machines remains to be tackled.
Source: ABC News - The Drum, Mike Steketee, July 17th 2015
