Stop Predatory Gambling

Addictive Nature of Slots Forces Australia to Consider a Policy Change

by Brent

According to a 2010 Australian Productivity Commission Report, 60% of total poker machine losses in the country were lost by problem gamblers.

Now, the Australian government is considering major reforms of predatory gambling policies in the country. This includes reducing the amount of money people can bet at the slots (referred to as “pokies” in Australia) and the amount the can be won. A public health official in the country claims that, “Australia’s pokies permit bets of up to $10 per spin every two or three seconds, allowing insertion of up to $10,000 a time.” The Australian Productivity Commission Report recommends an overhaul of the machines’ technology to only allow for maximum bets of $1 and maximum prizes of $500.

If such a policy were implemented, the number of problem gamblers would decrease. It would a good first step in addressing the addictive nature of slots and the predatory business model of the industry. Read the full article below from the Australian Broadcasting Corporation.

Public health and vested interests: carpe diem
by Charles Livingstone

In the face of an agreement between Andrew Wilkie and Prime Minister Gillard, for the introduction of pokie pre-commitment, the pokie lobby argues that mandatory pre-commitment is expensive, unproven, and won’t help problem gamblers.

The problems of pokie gambling are not trivial. They include financial distress and ruin, bankruptcy, fraud, embezzlement, and theft and misappropriation of the funds, property and income of family, friends, employers and others. Gambling problems are also strongly associated with crime generally, family breakdown, divorce, the neglect and abuse of children, mental and physical illness, depression and anxiety, and not infrequently include suicide. The children of regular and problem gamblers are themselves significantly more likely to have a gambling problem than those of non-gamblers, and poker machine venues are most strongly concentrated in poorer suburbs.

The Productivity Commission put the proportion of money lost by problem and at-risk gamblers at 60 per cent of total poker machine losses. In Australia, where pokies take $12 billion per year out of the pockets of gamblers, this means $7.2 billion per year comes from the pockets of people in trouble. For every problem gambler, up to 10 others are affected: children, husbands, wives, partners, employers, neighbours, family or friends. A million or more innocent people in Australia, every year.

Eighty per cent of gambling problems in Australia derive from pokies, because Australia’s pokies permit bets of up to $10 per spin every two or three seconds, allowing insertion of up to $10,000 a time. And they’re everywhere. It’s this combination that makes pokies so harmful. Ubiquitous, continuous, and toxic.

Powerful vested interests oppose pokie reform, including state governments, powerful corporations like Crown, Woolworths, Tattersall’s, and Tabcorp, and the mega clubs of New South Wales.

Until now, hardly any responses to gambling problems in Australia have focused on the cause of the problem, which is unsafe, highly-accessible poker machines. Pokies are designed to make you want to keep playing them, and to relieve you of your money, at a very rapid rate. You can easily blow your entire week’s wages in 20 minutes. They are voracious and ubiquitous and cunning and clever, and since most people don’t use them, most people don’t know how dangerous they are. Pokie gamblers are frequently poor, often ashamed, and not politically organised. These are not the characteristics of an effective lobby group. On the other hand, pokie operators are swimming in cash, have a keen interest in promoting their wares, and are exceptionally well-connected, especially in NSW.

The Parliament’s Joint Select Committee on Gambling Reform, chaired by Wilkie, focused on two technical measures to reduce harm. One way to make pokies less harmful is to reduce the amount it costs to play one, and the Wilkie committee’s report proposes low-impact pokies, accessible without a pre-commitment card, with maximum bets of $1, and maximum prizes of $500. Such machines would significantly reduce average losses. Trials on modified machines in 2001 indicated that ‘recreational’ or entertainment-focused gamblers mostly didn’t notice such modifications.

The second response relates to pre-commitment, which could be introduced by retro-fitting pokies to accept a smartcard-based system (at a cost of between $1,000 and $2,000 per machine), with player information stored on the card. If effectively implemented, the system would permit users to nominate their pre-set limits well away from the gaming room. Critics have suggested that problem gamblers will simply set unrealistic limits. But even the most intensely affected gambler frequently has lucid moments when they battle with their habit, and their recovery will be greatly assisted by this technology. Those beginning to struggle with a gambling problem will be helped to manage it, and even regular untroubled gamblers, who often report excessive spending, will almost certainly find their spending much easier to predict and control.

Pre-commitment systems have been technically trialled in two Australian states and they work. The problem is in uptake – only small numbers of people use them if they’re voluntary. In Norway, slot machines were replaced with a (so far) small number of new gaming terminals with a statutory daily limit of about $100, and gambling expenditure has declined, including amongst heavy slots gamblers, who have clearly not migrated to other gambling forms. In Nova Scotia, a recent trial of pre-commitment demonstrated that although effective, voluntary systems are unlikely to be taken up, and the evaluation report argues for the system to be mandatory. Support for the use of a card-based pre-commitment system was higher amongst problem and high-risk gamblers in this trial than amongst low-risk players; most high risk players felt that the pre-commitment system would help them set effective limits and reduce their spending.

The pokie lobby now argues that we need a trial of pre-commitment before implementing it. In order to tell us something we don’t already know, a trial of pre-commitment would require either all, or a very significant part of, an Australian jurisdiction. This would be needed to avoid ‘leakage’. The obvious choice would be Tasmania. But it appears that Tasmania’s monopoly pokie operator has told the Tasmanian government it won’t cooperate in a trial.

A trial would also involve a lengthy period of negotiation, installation, operation, and evaluation, with industry arguing that nothing should be done until all this was concluded, argued, dissected, and countered. This delay would be significant, at least three years. During that three years, industry would also pocket upwards of $36 billion in gambler’s losses, and problem and at-risk gamblers would lose $21.6 billion, hundreds of thousands of people would develop a gambling problem, and so on.

In Australia, we have a proud record of public health innovation, frequently involving taking on vested interests. We have done it with tobacco. We did it with gun control, with the justified outrage after the Port Arthur horror providing impetus to introduce the widest ranging, and most successful, gun reforms ever attempted anywhere. We also did it with seat belts. Until Victoria made them compulsory, no-one else had tried it.

The Roman poet Horace offered some perspective on the difficulties of public health reforms. ‘Carpe diem quam minimum credula postero’, he wrote: ‘pluck the day when it is ripe, trusting little in the future’.

Pokie gambling is very much an Australian problem. The Wilkie reforms offer an Australian solution, and there is plenty of evidence indicating that they’ll work. Whether decried as a political fix by vested interests and their cheer squads or not, the Wilkie reforms are reasonable, achievable and fair. We should get on with implementing them.

Charles Livingstone is Deputy Head of the Department of Health Social Science at Monash University. He is on twitter @CLdeFootscray.