Gambling Statistics Australia has just published its annual report showing Australians lost $23 billion (US$17.5 billion) in 2015 on gambling, up 8 percent from the previous year, with more than half of that bet on pokies. A smaller amount of $815 million was lost to sports betting, but that was a spike of 30 percent from the prior year.
The data comes against rising anti-gambling sentiment in the country, helped by the ascent to power of anti-gambling crusader Nick Xenophon in recent elections. The industry looks set to face increased pressure for reform, including a clamp down on sports-betting TV adverts and calls for restrictions on “highly addictive” gaming machines.
But is the recent wave of public criticism and negative press fair? How serious is problem gambling in Australia and what further measures could the industry take to alleviate concerns without damaging business?
Australians have earned the somewhat dubious reputation for being a nation of gamblers. The spend more on gambling than any other country, losing about $1,240 a head last year. While for most people having a flutter is nothing more than harmless entertainment, the issue of problem gambling has featured prominently in mainstream press of late.
Much of the attention continues to be focused on the slots-style poker machines that are a familiar fixture in bars and clubs throughout the country. There are around 200,000 poker machines, otherwise known as ‘pokies’, in Australia, with 100,000 clustered in New South Wales (NSW) alone. It is estimated 600,000 Australians play on these machines at least once a week.“We have 0.5 percent of the world’s population, and 20 percent of the world’s poker machines,” says Rohan Wenn, Director of Strategy at the Alliance for Gambling Reform. “You don’t have to be a maths whiz to see that doesn’t add up."
Tuned for addiction
Opponents say these machines, which have been around for decades in Australia, have been fine-tuned over the years to be highly addictive and extract as much money as possible from players. “The majority of Australians loathe the product,” Wenn asserts. “And it’s estimated by Australian academic researchers, that if you play once a week or more you are at serious risk of developing an addiction to poker machines.”
The Australian Productivity Commission has reported in the past that 40 percent of all losses on poker machines come from problem gamblers, or people developing an addiction to the machines. In NSW, where poker machines have been legal for 60 years, players can bet a maximum of $10 per spin every few seconds. Yet unlike horse racing where bettors are forced to wait half an hour between races, the immediacy and speed of play are what make poker machines particularly addictive, say critics. The maximum average loss rate per hour is $720 in Australia compared with $156 in New Zealand and $130 in the UK.
Dr Charles Livingstone, a gambling researcher at Monash University, says there are roughly 500,000 people in Australia with a gambling problem at Level 3+ on the Problem Gambling Severity Index (PGSI). “That is a big deal in a population of 23 million.” For Livingstone, the manner in which poker machines are concentrated in disadvantaged and low-income areas is a key factor in accentuating problem gambling. “Accessibility is the key risk factor for gambling harm, and the link between social stress, accessibility, high expenditure and harm is now well established.
“Furthermore, Australian-style machines are high impact and packed with features to render them highly addictive. And many Australian EGM [electronic gaming machine] venues, especially in New South Wales, have very large numbers of machines – 600 to 800 is common in clubs and are essentially suburban casinos. Again, large venues are linked to high expenditure and great harm.”
Moreover, it’s the knock-on effect of poker machine addiction that seems to be fuelling growing hostility among many Australians towards poker machines. Wenn says: “According to a recent study funded by the Victorian Government, for every dollar gained in poker machine revenue, around seven dollars is spent by the three tiers of government cleaning up the mess made by this deliberately addictive product – whether it is dealing with poverty, broken homes, suicide, fraud or violent crime.” He adds: “Poll after poll shows more than 80 percent of voters want pokies shut down completely or made significantly less harmful.”
Senator Nick Xenophon and Independent MP Andrew Wilkie have put their weight behind calls for bet limits to be slashed to just $1 per spin. If this ever came into force, it would be a hammer blow for this multi-billion dollar industry, not to mention the potential job losses and shortfall in tax revenues generated by the machines.
Unlike online gambling, which is regulated at a federal level, state governments oversee poker machine gambling and collect around $3.5 billion a year in taxes from poker machines. Yet the industry’s key stakeholders are bound to vociferously fight any threat to their income, particularly any significant reduction in bet limits. Furthermore, the Australian gambling lobby, spearheaded by Clubs NSW, is highly resourced and has links to the major political parties.
In response to the criticism levelled at poker machines and their potential harm, Ross Ferrar, CEO of the Gaming Technologies Association (GTA) – Australia’s poker machine lobby group – says problem gambling prevalence rates in Australia “have been on a downward trend for many years.” He also states that $1 bet limits would be the “most expensive and least effective” way to reduce the incidence of problem gambling. “A $1 maximum bet limit has already been rejected by two parliamentary inquiries, mainly because it would cost about $3.6 billion in equipment changes plus associated compensation to affected customers, employees and state governments.”
The GTA states that there are no ‘near miss’ machines in the country and that Australia and New Zealand have the slowest machines in the world that are designed and regulated to limit play speed. Additionally, Ferrar points out that the industry actively promotes responsible gambling. “The gaming industry, government and the community have been working together for years to implement responsible gaming features including clocks and currency meters on every poker machine screen, in-venue and statewide self-exclusion programs, in-venue patron care and chaplaincy programs.”
However, it is not just slots-based gambling that has come under pressure of late in Australia; the sports-betting industry and its TV advertising has also been in the spotlight. As well as concerns over the harm these adverts could be causing problem gamblers, a major worry for some is how sports-betting adverts are screened during G-rated (suitable for everyone) timeslots, exposing minors to betting. Sports-betting or gambling adverts are barred from being screened between 6am and 8.30am, and 4pm and 7pm, though bookmaker adverts can still be shown during broadcasts of NFL and AFL matches even if they are played during a G-rated slot.
Wenn says the Alliance for Gambling Reform supports the removal of this exemption to reduce the “normalisation of sport-betting in the minds of young children."
Wilkie and Xenophon are calling for the country to adopt a national approach to gambling advertising and also want a blanket ban on all betting ads during sports broadcasts, which would obviously hit TV networks hard in the pocket. Meanwhile, the Australian Association of National Advertisers (AANA) released the Wagering Advertising and Marketing Communications Code, which came into force on July 1st and sets new rules on the content of wagering advertising. The self-regulatory code stipulates that adverts cannot target minors and show people placing bets while drinking, among other rules.
With the calls for change growing louder, Australia’s gaming industry looks set for testing times.
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