Our most profitable gambling venues are the most harmful

The long-held suspicion that high per capita expenditure in poker machine venues leads to high rates of problem gambling can now be confirmed by new research. AAP/Tracey Nearmy

The more money spent per capita on pokies in a venue, the higher the rate of gambling problems in that venue. This is the straightforward conclusion of our research recently published in the journal Addiction. The finding is important because it confirms the proposition that any move that increases gambling losses is likely to be at the expense of the public good.

To be precise, the rate of problem gambling among venue patrons doubles as within-venue per capita poker machine spending increases from A$10 to A$150 per month, as per the figure below.

The prevalence of gambling-related harm increases with increased gambling losses in venues. Points indicate actual venues in the study. Symbols X, C and H indicate venues of type casino, club and hotel, respectively. Authors

Our study examined the rate of problem gambling among venue-goers across a sample of 62 poker machine venues. We compared this with poker machine expenditure data for individual venues, obtained from the Department of Justice.

We controlled for venue type and venue size, since we already know that larger gambling venues and casinos are likely to be more dangerous. We also used a sophisticated trade-area model to account for differences in the number of people who visit each gambling venue.

Our results are in one sense not surprising. The harms associated with gambling arise from either a loss of money or the opportunity cost of time spent gambling. As such, we should expect per capita gambling spend to be an excellent proxy measure of rates of problem gambling.

However, the gambling industry has long disputed this simple relationship. One common argument, for example, is that because poker machines are already highly accessible throughout the community, any increase in gambling expenditure is unlikely to be associated with substantially increased levels of problem gambling.

Instead, the gambling industry argues, the vast majority of new revenue would come from so-called “recreational gamblers”.

Our research suggests that this is not the case. On the contrary, a high rate of gambling expenditure within a venue’s trading area is directly associated with high incidence of problem gambling within that area.

As such, any moves that result in increased gambling expenditure may be questioned on public health grounds. Venues can increase per capita gambling expenditure in a number of ways. These include increasing the number of poker machines, relocating machines to poorer communities with a higher propensity to gamble, customising the machine mix to suit local player preferences, marketing, provision of courtesy buses and attractions such as bingo, which themselves lose money but bring in gamblers who then play the pokies.

Disturbingly, however, the expansion of poker machine gambling continues apace. Governments and regulators need to be aware that any increase in gambling losses will be accompanied by an increased burden of human suffering among gamblers.

Our findings also suggest that venues owned by highly efficient big businesses are the most implicated in generating gambling harm. For example, Australian Leisure and Hospitality Group (ALH) – co-owned by Woolworths and Bruce Mathieson – advertises itself as Australia’s “leading” pub operator of poker machines.

Research in Victoria found that 16 of the 20 highest-grossing pubs were owned by ALH, presumably because of economies of scale that increase their ability to intensify gambling in their venues. Our research suggests that these venues are likely to be among the most harmful. Big Gambling, it seems, leads to proportionately big social impacts.

We already know that the burden of problem gambling weighs heaviest on those least able to bear it. Gambling expenditure is concentrated in the most disadvantaged suburbs where poker machines suck resources out of the poorest communities.

For example, the local government area of Fairfield is the poorest in Sydney. In Fairfield in 2010-11, there was one poker machine for each 42 adults and each adult resident lost an average of $2340. Across the harbour in Ku-ring-gai and Willoughby, whose residents are among the richest 6% in Australia, there was just one poker machine per 231 adults and losses were just $270 per adult.

What we can now confirm is the long-held suspicion that high per capita expenditure means high rates of problem gambling. Disadvantaged communities like Fairfield are not only losing financial resources at an alarming rate, but they are also bearing a disproportionate burden of gambling-related human misery.

As such, stemming gambling expenditure – especially but not exclusively in disadvantaged locations – must be a high priority.

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