Tuesday, August 16, 2022

Politicians rattle anti-gambling cages as state elections loom


Upcoming elections in South Australia and Tasmania are providing another opportunity for anti-gambling crusaders to target the industry, prompting concern a hostile operating environment will restrict growth.

Voters in both states will go to the polls this month, with political parties in each pushing for a ban on pokies in bars and clubs to alleviate problem gambling. South Australia is of particular concern, where the minority party of a prominent anti-gambling crusader, is giving the major groups a run for their money.

“First, in South Australia, Nick Xenophon, who has long been a strong anti-gambling advocate, has a real chance to share power with one of the major parties after the forthcoming State election,” said David Green, founder of Newpage Consulting.

Xenophon was an Upper House independent who started a "No Pokies" party in South Australia in the 1990s, before becoming a Federal Senator and moving to Canberra.

“The fact that he is now back, and commanding a significant voter following, is bad news for the gambling industry,” Green said, adding South Australia relies heavily on license fees and taxes from gaming.

Recently Xenophon appears to have softened his no pokies pledge, saying he wants to reduce their number, rather than an all out ban. He wants to cut the total count over the next five years to about 8,000 from 12,100 currently. However, he still plans to introduce measures opposed by the industry, such as capping each spin at $1 and removing EFTPOS access near machines.

"Our policies will be a key negotiating plank to keep the next government of [South Australia] accountable on such an important issue, should we have the seats in parliament to influence that change," he was cited as saying by local media.

In Tasmania, Labour opposition leader Rebecca White has added to this furore by announcing that under a potential Labour Government, no pokies will be allowed outside of casinos in Tasmania. The move would see around 2,300 poker machines stripped out of venues across the state over the next five years. However, industry expects don’t expect her to succeed.

“She is currently facing a well-funded campaign from the ruling party, and backed by the gaming industry, which wants to maintain the status-quo. At this stage, her chances of winning and getting her way with the pokies appear slim,” said Sudhir Kale, the founder of GamePlan Consultants.

“The issue of slots and gambling-related harm is almost always a topic of debate and discussion in Australia, particularly in Tasmania and South Australia. The debate invariably intensifies during federal and state elections with promises and counter-promises made to voters,” Kale said.

“Usually, regardless of the outcome of elections, a lot of the proposed  "reforms" to reduce gambling harm rarely see the light of day by way of implementation. Thus far, the discussion in this round of debates seems confined to poker machines, and I do not see it being parlayed into online or sports betting.”

Still, the political pressure has been intense, with another salvo being fired on political donations to reduce the lobbying power of the sector.

The Alliance for Gambling Reform has called for a complete ban on political donations from the gaming industry, after recent disclosures found that more than A$1.5 million ($1.18 million) was donated to major political parties in 2016/17, local media reports.

According to analysis by the AGR, in 2016/17, there were 20 seperate gambling industry donations to the federal Labor Party, totalling $330,650, while the Coalition received almost $1 million in donations. Crown Resorts, Tabcorp, Clubs NSW, Clubs Australia and the Australian Hotels Association were revealed as major gambling donors.

Tim Costello, director of the Alliance, said that gambling harm will continue in Australia until the “political funding tap is completely turned off.”

Costello added that there is a good chance that the reported numbers are understated, with current rules stating that only donations over $13,200 need to be disclosed. Costello also said that a large amount of the donations were focused in NSW, calling the state the most "pokies-captured jurisdiction.”

The  mounting regulatory pressure is taking its toll on the industry, especially in the online sector. Amendments to the Interactive Gambling Act, passed last year effectively ban all online gambling apart from sports betting and lotteries. It further prohibits in-play betting and from February this year banned online bookmakers from offering credit betting.

Last year, ads during live sports tournaments were banned, while operators licensed in the Northern Territory were recently told to stop accepting and paying out bets in cryptocurrencies. The changes have triggered an exodus of foreign bookies from the country.

UK bookmaker William Hill in late February reported a pretax loss of GBP74.6 million (US$104.2 million) for 2017 after slashing the value of its Australian business and became the latest to say it was considering throwing in the towel. It joins the likes of Vera&John, PokerStars and 888poker to name but a few.

“Given the credit betting ban in Australia and the likely introduction of a point of consumption tax in a number of states, it is clear that profitability will increasingly come under pressure,” William Hill said.

Although land-based casinos have not been targeted, Star Entertainment in its latest results announcement gave a cautious outlook, in part due to “any uncertainty related to the regulatory environment.”

Politics is not helping.

“There is no evidence that Australia has a greater prevalence or severity of problem gambling than other mature gambling jurisdictions...it is more a case of industry opponents picking their time to rattle political cages. Now is such a time, at least in SA and Tasmania,” Green says.


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