tag:theconversation.com,2011:/au/topics/poker-machines-2808/articlesPoker machines – The Conversation2023-06-30T04:58:56Ztag:theconversation.com,2011:article/2087492023-06-30T04:58:56Z2023-06-30T04:58:56ZAustralia has a strong hand to tackle gambling harm. Will it go all in or fold?<figure><img src="https://images.theconversation.com/files/534967/original/file-20230630-25-kpnylj.jpg?ixlib=rb-1.1.0&rect=8%2C979%2C5973%2C3000&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>A ban on all gambling advertising within three years has attracted the <a href="https://www.theguardian.com/australia-news/2023/jun/28/ads-for-online-gambling-should-be-banned-in-australia-within-three-years-inquiry-recommends">most attention</a> of the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Social_Policy_and_Legal_Affairs/Onlinegamblingimpacts/Report/List_of_recommendations">31 recommendations</a> made by the Australian parliamentary inquiry into online gambling, which reported this week.</p>
<p>But equally significant are the recommendations to adopt public health principles to prevent gambling harm, to appoint a national online regulator, and for Australian to lead the development of international agreements that “aim to reduce gambling harm and protect public policy and research from gambling industry interference”.</p>
<p>If implemented, the recommendations will advance gambling regulation by several orders of magnitude. </p>
<p><a href="https://link.springer.com/article/10.1007/s10389-020-01437-2">Preventing harm</a> is a better goal than the current practice of ignoring harms until they become overwhelming. Building a fence at the top of the cliff, rather than providing a fleet of ambulances at the bottom, seems sensible. </p>
<p>Many countries are grappling with regulating unlicensed <a href="https://researchportal.helsinki.fi/en/publications/blocking-measures-against-offshore-online-gambling-a-scoping-revi">online gambling operators</a> registered in places like Curaçao and the Isle of Man. The only way to effectively address this is via <a href="https://www.coe.int/en/web/pompidou/-/the-recording-of-the-webinar-on-behavioural-addictions-facilitated-by-information-and-communication-technologies-risks-and-perspectives-is-now-availab">international agreements</a>. </p>
<p>And as with many other harmful commodity industries, gambling operators <a href="https://www.lisbonaddictions.eu/lisbon-addictions-2022/presentations/5-ways-gambling-industry-pursues-influence-policymakers">advance their interests</a> through political influence. They have enthusiastically utilised the tactics honed by the tobacco industry – <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1360-0443.2010.03137.x">lobbying</a>, <a href="https://www.abc.net.au/news/2021-10-14/how-the-gambling-industry-cashed-in-on-political-donations/100509026">political donations</a> and influencing <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7434195/">research outcomes</a> through funding. </p>
<p>All these aspects need addressing. For example, the inquiry recommends imposing a levy on the gambling industry to fund research. </p>
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<h2>Phasing out advertising</h2>
<p>The proposals to prohibit all inducements to gamble come in four phases.</p>
<p>The first would ban all social media and online advertising. Radio advertising during school drop-off times would also be prohibited.</p>
<p>In the second phase, broadcast advertising for an hour either side of sporting broadcasts would be banned (as Opposition Leader <a href="https://www.theguardian.com/australia-news/2023/may/13/peter-dutton-cranks-up-pressure-on-labor-to-further-restrict-gambling-ads">Peter Dutton has argued for</a>). </p>
<p>The third stage would prohibit all broadcast advertising for gambling between 6am and 10pm.</p>
<p>Finally, three years on, all gambling advertising would be gone from our screens.</p>
<p>Not many people will miss it. A 2022 survey by the <a href="https://australiainstitute.org.au/post/polling-research-give-junk-food-gambling-ads-the-punt/">Australia Institute</a> found 70% support for such restrictions. The evidence suggests this would be beneficial to young people, since exposure to advertising increases the likelihood of gambling as adults, <a href="https://www.theguardian.com/society/2020/mar/27/children-more-likely-to-become-gamblers-due-to-high-volume-of-betting-ads">with significant harm</a> for some.</p>
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<h2>Important precedents</h2>
<p>The recommendations would set important precedents that can be readily applied to other forms of gambling. These include the principle of establishing a public health-oriented harm prevention policy, a national regulatory system, and enhancing consumer protections to potentially include a universal pre-commitment system. </p>
<p>If online gambling can be better regulated – and it can – why not casinos and pokies? Casino inquiries in <a href="https://www.parliament.nsw.gov.au/la/papers/Pages/tabled-paper-details.aspx?pk=79129">New South Wales</a>, <a href="https://www.rccol.vic.gov.au/">Victoria</a>, <a href="https://www.justice.qld.gov.au/initiatives/external-review-qld-operations-star-entertainment-group">Queensland</a> and <a href="https://www.wa.gov.au/government/publications/perth-casino-royal-commission-final-report">Western Australia</a> have certainly demonstrated the need. So has the <a href="https://www.crimecommission.nsw.gov.au/inquiry-into-money-laundering-in-pubs-and-clubs">NSW Crime Commission</a>’s 2022 inquiry into money laundering in pubs and clubs. Notably, poker machines are estimated to be responsible for <a href="https://akjournals.com/view/journals/2006/12/1/article-p182.xml">51% to 57% of the total problems</a> arising from gambling. Race and sports wagering account for 20%.</p>
<h2>Industry will resist</h2>
<p>The <a href="https://www.abc.net.au/radio/programs/pm/gambling-ads-ban-called-an-over-reach-/102538120">online gambling industry</a> will do all it can to thwart these initiatives, along with <a href="https://www.smh.com.au/business/companies/wagering-tv-bodies-slam-proposed-gambling-ads-ban-afl-wary-of-impact-20230628-p5dk4j.html">broadcasters</a> and some <a href="https://www.theage.com.au/sport/afl/scourge-of-the-gambling-epidemic-teal-mp-attacks-afl-over-gambling-ads-20230302-p5coym.html">sports</a> businesses. </p>
<p>Certainly Australia’s unenviable record of being world leaders in <a href="https://www.abc.net.au/news/2018-11-20/australians-worlds-biggest-gambling-losers/10495566">gambling losses</a> will be threatened if the recommendations are implemented. </p>
<p>The report <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Social_Policy_and_Legal_Affairs/Onlinegamblingimpacts/Report/Chapter_2_-_A_national_strategy_on_online_gambling_harm_reduction">acknowledges</a> wagering service providers have “successfully framed the issue of gambling harm around personal responsibility while diminishing industry and government responsibility”. </p>
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<p>There is too much potential for the gambling industry to be involved in the development of gambling regulation and policy in Australia. </p>
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<p>Submissions from the gambling industry reflected this. </p>
<p>For example, <a href="https://responsiblewagering.com.au/">Responsible Wagering Australia</a>, which represents wagering companies such as Bet365, Betfair, Entain, Sportsbet, Pointsbet and Unibet, suggested the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Social_Policy_and_Legal_Affairs/Onlinegamblingimpacts/Submissions">industry was focused on limiting harm</a>, and mindful of the risks of “problem gambling”. </p>
<p>Indeed, the inquiry’s original terms of reference were about “online gambling and its impacts on problem gamblers”. </p>
<p>The committee changed this to the “impacts on those experiencing gambling harm”. Its report reflects this change, and the majority of submissions and evidence given in <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Social_Policy_and_Legal_Affairs/Onlinegamblingimpacts/Report/B_Public_hearings">13 public hearings</a> overwhelmingly in favour of improved regulation of online gambling product</p>
<p>In the report’s forward, chair Peta Murphy writes:</p>
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<p>I am proud to say this Committee has delivered a unanimous report that says, ‘enough is enough’. </p>
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<p>Gambling harm imposes <a href="https://responsiblegambling.vic.gov.au/resources/publications/the-social-cost-of-gambling-to-victoria-121/">enormous costs</a> on the community, and on those affected, including families. Examples of these effects are prominent in the committee’s report. Many are harrowing.</p>
<p>There is some way to go before Australia joins Italy, Spain, Belgium and The Netherlands in taking action against gambling interests. But delay means more harm to more people. </p>
<p>The Australian government now has an excellent road map to demonstrate its commitment to the health and wellbeing of Australians. Adopting the inquiry’s recommendations should be a high priority.</p><img src="https://counter.theconversation.com/content/208749/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government and the Foundation for Alcohol Research and Education, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Finnish Alcohol Research Foundation, the Ontario Problem Gambling Research Committee, the Turkish Red Crescent Society, and the Problem Gambling Foundation of New Zealand. He was a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Lancet Public Health Commission into gambling, and of the World Health Organisation expert group on gambling and gambling harm. He made a submission to and appeared before the HoR Standing Committee on Social Policy and Legal Affairs inquiry into online gambling and its impacts on those experiencing gambling harm.</span></em></p>If implemented, the recommendations of Australia’s online gambling inquiry will advance regulation by several orders of magnitude.Charles Livingstone, Associate Professor, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1933122022-10-28T04:53:48Z2022-10-28T04:53:48ZPubs and clubs – your friendly neighbourhood money-laundering service, thanks to 86,640 pokies<figure><img src="https://images.theconversation.com/files/492250/original/file-20221028-53112-lf1bpj.jpg?ixlib=rb-1.1.0&rect=0%2C298%2C4235%2C2228&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Billions of dollars in proceeds of crime are being funnelled through clubs and pubs in New South Wales, <a href="https://www.crimecommission.nsw.gov.au/final-islington-report.pdf">according to</a> the NSW Crime Commission. Predictably, the industry is claiming it’s not an issue and solutions are too difficult.</p>
<p>Laundering money through a local club or hotel involves loading cash into one of the state’s <a href="https://www.liquorandgaming.nsw.gov.au/resources/gaming-machine-data">86,640 poker machines</a>, then cashing out and claiming the money as winnings.</p>
<p>This is not a preferred method for most organised criminals, the crime commission says. Sophisticated criminals have other methods. But it is still a sizeable proportion of the estimated $20 billion in criminal proceeds laundered in NSW each year.</p>
<p>In Queensland, you can put only $100 into a poker machine at one time. In Victoria the limit is $1,000. In NSW, newer machines allow $5,000, and older machines up to <a href="https://www.theguardian.com/australia-news/2022/jul/14/nsw-poker-machine-laws-may-increase-risk-of-money-laundering-says-commission">$10,000</a>. For supposedly harmless suburban fun it’s hard to understand why such sums are allowed.</p>
<p>The findings of the NSW Crime Commission’s <a href="https://www.crimecommission.nsw.gov.au/final-islington-report.pdf">inquiry into money laundering via clubs and hotels</a> follow scandalous money-laundering revelations from casino inquiries in <a href="https://theconversation.com/not-suitable-where-to-now-for-james-packer-and-crowns-other-casinos-154938">NSW</a>, <a href="https://theconversation.com/illegal-dishonest-unethical-and-exploitative-but-crown-resorts-keeps-its-melbourne-casino-licence-170625">Victoria</a>, Western Australia and Queensland.</p>
<p>Those inquiries found Crown Resorts and Star Entertainment allowed hundreds of millions of dollars to pass through their casinos, in contravention of anti-money-laundering regulations.</p>
<p>Both companies were found not fit to hold their licences. Crown has been fined <a href="https://www.abc.net.au/news/2022-05-30/crown-casino-fined-80-million-dollars-china-union-pay/101111660">$80 million</a> in Victoria. Star has been fined <a href="https://www.abc.net.au/news/2022-10-16/star-casino-set-to-be-fined-100-million/101541354">$100 million</a> in NSW, and had its licence suspended. </p>
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<p>Both have been required to undergo extensive “renewal”. They have agreed to adopt cashless gaming to better protect against money laundering.</p>
<p>It’s therefore unsurprising the NSW Crime Commission’s principal recommendation is to introduce a cashless system for all electronic gaming machines in NSW. Also unsurprising is that the industry is focused on why it shouldn’t.</p>
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<h2>Cashless gambling recommended</h2>
<p>The NSW Crime Commission’s report recommends a cashless gambling system for pubs and clubs the same as for casinos – consistent with the identification requirements of Australia’s <a href="https://www.legislation.gov.au/Details/C2021C00243">Anti-Money Laundering and Counter-Terrorism Financing Act</a>.</p>
<p>Electronic gaming cards would record amounts loaded and withdrawn, times, turnover, and losses/wins. The maximum amount of cash able to be loaded on to a player’s account in a single day would be $1,000.</p>
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<img alt="Older electronic gaming machines in NSW allow you to 'load up' to $9,999." src="https://images.theconversation.com/files/491840/original/file-20221026-4274-h5s605.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/491840/original/file-20221026-4274-h5s605.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/491840/original/file-20221026-4274-h5s605.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/491840/original/file-20221026-4274-h5s605.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/491840/original/file-20221026-4274-h5s605.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/491840/original/file-20221026-4274-h5s605.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/491840/original/file-20221026-4274-h5s605.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Older electronic gaming machines in NSW allow ‘load up’ to $9,999.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<p>Josh Landis, the chief executive of ClubsNSW (which represents most of the state’s 1,200 licensed clubs) <a href="https://www.abc.net.au/sydney/programs/breakfast/breakfast/14090002">has said</a> that such technology has not been trialled, and was uncosted and unproven.</p>
<p>But Crown Resorts and Star Entertainment are implementing such systems. Similar systems have been operating successfully in Norway <a href="https://nla.gov.au/nla.obj-571970219/view">since 2009</a>, and in Sweden <a href="https://aifs.gov.au/resources/policy-and-practice-papers/pre-commitment-systems-electronic-gambling-machines">since 2013</a>. </p>
<p>Victoria has already implemented a card-based <a href="https://www.yourplay.com.au/">precommitment system</a>, incorporating most necessary characteristics. Every poker machine in the state is linked to this system. Its flaw is that it is voluntary, allowing those who wish to clean dirty money, or avoid a limit, <a href="https://www.justice.vic.gov.au/safer-communities/gambling/evaluation-of-yourplay-final-report">to simply opt out</a>. </p>
<h2>It’s not just about money laundering</h2>
<p>Money laundering isn’t the only reason to introduce cashless gaming systems.</p>
<p>On any day in NSW, <a href="https://www.responsiblegambling.nsw.gov.au/__data/assets/pdf_file/0008/881279/NSW-Gambling-Survey-2019-report-FINAL-AMENDED-Mar-2020.pdf">hundreds of thousands of people</a> are experiencing significant gambling harm, mostly using poker machines. Many hundreds of thousands more – <a href="https://www.tandfonline.com/doi/abs/10.1080/14459795.2017.1331252">partners, children, employers</a> – are also harmed as a consequence. </p>
<p>A pre-commitment system incorporating all the features of the NSW Crime Commission’s cashless model would stop money laundering and also help those struggling to control their gambling. For those who want to stop it would provide a truly effective gambling self-exclusion system. </p>
<p>The Tasmanian government <a href="https://www.abc.net.au/news/2022-09-16/tasmania-pokies-gambling-limits-reform-explained/101446788">has promised to implement</a> a statewide system by 2024.</p>
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Read more:
<a href="https://theconversation.com/responsible-gambling-a-bright-shining-lie-crown-resorts-and-others-can-no-longer-hide-behind-162089">Responsible gambling – a bright shining lie Crown Resorts and others can no longer hide behind</a>
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<h2>A matter of political commitment</h2>
<p>The real test here isn’t technology. It’s political will. </p>
<p>NSW Premier Dominic Perrottet has expressed concern at the <a href="https://www.smh.com.au/politics/nsw/premier-says-pokies-taxing-on-the-misery-of-others-vows-to-do-better-20221002-p5bmjz.html">exploitation of vulnerable people</a> via gambling. Opposition leader Chris Minns has <a href="https://www.theage.com.au/politics/nsw/coalition-labor-set-to-be-wedged-on-cashless-gaming-card-as-crossbench-pushes-for-reform-20221027-p5bteh.html">said the crime commission’s report is concerning</a> but will not commit to a cashless card. </p>
<p>ClubsNSW and the Australian Hotels Association are two of Australia’s most powerful lobby groups. According to an <a href="https://www.abc.net.au/news/2021-11-23/how-gambling-industrys-biggest-political-donors-influence-votes/100592068">ABC investigation</a>, they have doled out about a third of $40 million in political donations disclosed by gambling-related organisations over the past two decades.</p>
<p>Since 2010, ClubsNSW has signed <a href="https://www.smh.com.au/national/nsw/the-million-dollar-men-who-run-the-clubs-industry-20221011-p5bowp.html">memorandums of understanding</a> with incoming governments to protect its members interests.</p>
<p>In the first six months of 2022 (the <a href="https://nswgov.sharepoint.com/sites/GamingMachineReports/Shared%20Documents/Forms/AllItems.aspx">most recent data</a> available), people in NSW lost $4 billion using pokies – $2.4 billion in clubs, $1.6 billion in pubs. This is 23% more than the same period in 2019, before pandemic restrictions. </p>
<p>Yet according to the Australian Hotels Association, the industry is on “<a href="https://www.afr.com/chanticleer/why-a-pokie-crackdown-will-have-pub-owners-nervous-20221026-p5bt48">on its knees</a>” and being told to introduce “an unproven, untested, un-costed and unnecessary cashless system”.</p>
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Read more:
<a href="https://theconversation.com/4-gambling-reform-ideas-from-overseas-to-save-australia-from-gambling-loss-and-harm-165387">4 gambling reform ideas from overseas to save Australia from gambling loss and harm</a>
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<p>In NSW, gambling operators are not permitted to donate to state political campaigns. But ClubsNSW (and its member clubs) can because they are “<a href="https://www.elections.nsw.gov.au/Funding-and-disclosure/Political-donations/Unlawful-political-donations/Prohibited-donors">not for profit</a>”.</p>
<p>If this continues, political parties will be open to the allegation that they, like clubs, are benefiting from the proceeds of crime.</p>
<p>Pokie operators have billions of reasons to assert this is no big deal. Politicians should take a different view.</p><img src="https://counter.theconversation.com/content/193312/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government and the Foundation for Alcohol Research and Education, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Finnish Alcohol Research Foundation, the Ontario Problem Gambling Research Committee, the Turkish Red Crescent Society, and the Problem Gambling Foundation of New Zealand. He was a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Lancet Public Health Commission into gambling, and of the World Health Organisation expert group on gambling and gambling harm. </span></em></p>The NSW Crime Commission says cashless gambling cards are needed to stop billions of dollars of ‘dirty money’ being funnelled through NSW pokie venues,Charles Livingstone, Associate Professor, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1706252021-10-26T06:42:18Z2021-10-26T06:42:18Z‘Illegal, dishonest, unethical and exploitative’ – but Crown Resorts keeps its Melbourne casino licence<figure><img src="https://images.theconversation.com/files/428421/original/file-20211026-15-2sc4rz.jpg?ixlib=rb-1.1.0&rect=44%2C528%2C4899%2C2273&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The report of Victoria’s Royal Commission into Melbourne’s casino has been <a href="https://content.royalcommission.vic.gov.au/sites/default/files/2021-10/The%20Report%20-%20RCCOL%20-%2015%20October%202021.pdf">made public</a>. It has found the behaviour of the casino’s operator, Crown Resorts to be “disgraceful”, with practices that have been “variously illegal, dishonest, unethical and exploitative”. </p>
<p>But royal commissioner Ray Finkelstein has also decided the <a href="https://theconversation.com/crown-resorts-is-not-too-big-to-fail-it-has-failed-already-165659">economic effects</a> of Crown losing its licence, the impact on innocent parties, and the company’s belated attempts at rehabilitation mean it should keep its casino licence – at least for now.</p>
<p>The Victorian government has <a href="https://www.parliament.vic.gov.au/file_uploads/Government_response_to_Crown_Royal_Commission_report_QYfCym70.pdf">accepted this recommendation</a>. It will appoint a “special manager” – <a href="https://www.vicbar.com.au/profile/6231">Stephen O'Bryan QC</a>, a former commissioner with the state’s anti-corruption commission – to oversee the casino’s operations over the next two years.</p>
<p>After two years O'Bryan will prepare a report for the new gambling regulator the Victorian government will establish in response to the deficiencies identified with the Victorian Commission for Gambling and Liquor Regulation. The new beefed-up regulator, to be known as the <a href="https://www.premier.vic.gov.au/new-regulator-strengthen-casino-oversight">Victorian Gambling and Casino Control Commission</a>, will then decide if Crown keeps its licence. </p>
<p>The government has also announced it will repeal provisions enabling Crown to be compensated for any regulatory changes affecting its business. It will also increase the maximum penalty for breaches of the Casino Control Act from A$1 million to A$100 million. </p>
<p>This is all good. But all these things should, of course, have been in place far earlier. </p>
<p>It is the failure of regulation, and the politics that sit behind it, that made the Crown Melbourne debacle possible, and perhaps inevitable. </p>
<p>As with other gambling businesses, Crown’s <a href="https://theconversation.com/gambling-lobby-gives-big-to-political-parties-and-names-names-73131">political influence</a> has been significant, and a key feature of its business model. </p>
<p>Politically and socially <a href="https://theconversation.com/gambling-industry-finds-plenty-of-political-guns-for-hire-to-defend-the-status-quo-70124">well connected directors and staff</a> were recruited, clearly with an eye to their ability to influence governments. Their aim, it seems, was to make Crown too big to be regulated. They seem to have succeeded.</p>
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Read more:
<a href="https://theconversation.com/crown-resorts-is-not-too-big-to-fail-it-has-failed-already-165659">Crown Resorts is not too big to fail. It has failed already</a>
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<h2>Recommendations kicked down the road</h2>
<p>Beyond the government’s headline announcements, some of Commissioner Finkelstein’s key recommendations have been kicked down the road – until next year, at least. These include those addressing money laundering, and changes to the operator’s structure. The latter relate to reductions in maximum shareholdings, and the independence of the board and senior management. </p>
<p>Also deferred is any response to the recommendations focused on gambling harm prevention and minimisation. Many in favour of gambling reform will be encouraged by Finkelstein’s focus on these. The government says it accepts all his recommendations, but exactly how it will act on them requires “further detailed analysis and consultation”.</p>
<p>Finkelstein focused on the harms of gambling, finding that:</p>
<blockquote>
<p>Crown Melbourne had for years held itself out as having a world’s best approach to problem gambling. Nothing can be further from the truth.</p>
</blockquote>
<p>His recommendations to improve Crown’s paltry “responsible gambling” program are far reaching and significant. They include implementing a comprehensive pre-commitment system, requiring gamblers to establish accounts and set limits of time and money. This would establish an effective self-exclusion system for the first time, in which those struggling with gambling would be able to ban themselves from gambling without the possibility of easily revoking that arrangement.</p>
<p>Australia’s Productivity Commission recommended a pre-commitment system in its 2010 <a href="https://www.pc.gov.au/inquiries/completed/gambling-2010/report">report</a> on gambling. The Gillard government was set to implement that recommendation, but ClubsNSW spearheaded <a href="https://insidestory.org.au/the-lobby-group-that-got-much-more-bang-for-its-buck/">a successful campaign</a> to sink the plan. </p>
<p>The gambling lobby will no doubt be keenly interested in how the Victorian government responds to Finkelstein’s recommendation, which goes further than the Productivity Commission by recommending a default loss limit and regulated breaks in use. </p>
<h2>Reversing the ‘responsible gambling’ discourse</h2>
<p>Finkelstein’s report recommends the casino also have “a duty to take all reasonable steps to prevent and minimise harm from gambling”. This effectively reverses the “responsible gambling” discourse which puts the onus on gamblers – and arguably blames them for harming themselves. Such a change, if well implemented, has the potential to finally make harm prevention a high priority in gaming regulation.</p>
<p>The report also recommends that casino data be made available for proper research purposes. It points out the importance, and difficulty, of obtaining such data. Without it, evaluating the casino’s personal and social impacts is virtually impossible. This too would be a big step forward in harm prevention and reduction efforts. It could also help with anti money-laundering endeavours.</p>
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<strong>
Read more:
<a href="https://theconversation.com/responsible-gambling-a-bright-shining-lie-crown-resorts-and-others-can-no-longer-hide-behind-162089">Responsible gambling – a bright shining lie Crown Resorts and others can no longer hide behind</a>
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<h2>A blueprint for wider regulation</h2>
<p>Assuming its board and executives have the nous to clean up the business to the necessary standard, Crown Resorts will get to keep its Melbourne casino. This will shock many, given what has transpired.</p>
<p>Political will is needed. The outcome may be that a powerful and harmful gambling business is cleaned up. Or the situation may revert to <a href="https://www.tandfonline.com/doi/abs/10.1080/14459790701601810">business as usual</a> – the default position for gambling regulation. This depends on what the Victorian government does with the recommendations on which it has postponed action. </p>
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Read more:
<a href="https://theconversation.com/casino-operator-crown-plays-an-old-business-trick-using-workers-as-human-shields-165815">Casino operator Crown plays an old business trick: using workers as human shields</a>
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<p>Most of the money <a href="https://responsiblegambling.vic.gov.au/resources/gambling-victoria/expenditure-on-gambling-victoria-and-australia/">Victorians</a> (and <a href="https://responsiblegambling.vic.gov.au/about-us/news-and-media/latest-edition-australian-gambling-statistics-2019/">Australians</a>) gamble away is through poker machines in local clubs and pubs. The Finkelstein royal commission has provided an important blueprint to tackle that gambling harm, too. The Victorian government could lead the way by extending Finkelstein’s recommendations to all gambling businesses. No business, or sector, should be too big to be regulated.</p><img src="https://counter.theconversation.com/content/170625/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government and the Foundation for Alcohol Research and Education, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Finnish Alcohol Research Foundation, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He was a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens.</span></em></p>Whether the Victorian royal commission leads to a more responsible gambling industry depends on the recommendations the state government has kicked down the road.Charles Livingstone, Associate Professor, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1656592021-08-08T21:05:22Z2021-08-08T21:05:22ZCrown Resorts is not too big to fail. It has failed already<figure><img src="https://images.theconversation.com/files/414964/original/file-20210806-5434-1q71het.jpg?ixlib=rb-1.1.0&rect=0%2C653%2C4592%2C2151&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Nils Versemann/Shutterstock</span></span></figcaption></figure><p>Crown Resorts was very sorry it had done so many wrong things in running its Melbourne casino, the company’s
senior counsel, Michael Borsky, <a href="https://www.afr.com/companies/games-and-wagering/crown-melbourne-ceo-stands-down-20210803-p58fcj">last week</a> told Victoria’s Finkelstein royal commission. </p>
<p>But his main point was to argue that Crown should keep running the casino, because cancelling or suspending its licence would not be in the public interest.</p>
<p>His submissions — responding to the arguments made by the counsel assisting the commission, Adrian Finanzio, for why Crown should be stripped of its licence — emphasised allowing the company to get on with reforming as the best course of action. At worst, Borsky argued, an independent supervisor or monitor with broad powers could be be appointed to direct the company’s activities.</p>
<p>Crown’s spin is that the public interest is mostly about maintaining the employment of the 11,600 people who work at the sprawling Melbourne casino and entertainment complex. It argues Victoria’s tourism industry would be endangered, should the licence be lost, and it is important to keep the revenue the casino provides to Victoria’s treasury flowing. </p>
<p>But based on the evidence, this seems a very optimistic take. </p>
<p>The commission has heard a litany of revelations about Crown’s malfeasance and improper conduct across a range of areas. </p>
<p>Last month royal commissioner Ray Finkelstein observed that everywhere he looked in the company there was evidence of <a href="https://theconversation.com/illegal-improper-unacceptable-revelations-about-crowns-casino-culture-just-get-worse-164084">inappropriate or unlawful behaviour</a>. Last week he compared Crown Resorts to <a href="https://www.theguardian.com/australia-news/2021/aug/03/crown-asks-royal-commission-for-trust-to-run-melbourne-casino">a car thief</a> who promises to stop stealing cars when apprehended. He suggested it was certainly not in the public interest for a decade of malfeasance to be rewarded.</p>
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Read more:
<a href="https://theconversation.com/responsible-gambling-a-bright-shining-lie-crown-resorts-and-others-can-no-longer-hide-behind-162089">Responsible gambling – a bright shining lie Crown Resorts and others can no longer hide behind</a>
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<h2>Finkelstein’s options</h2>
<p>Several paths are open to Finkelstein. He can recommend Crown Resorts lose its licence. He could recommend the company be granted some further opportunity to rehabilitate itself. Perhaps under supervision. A manager could be appointed until Crown achieves its reform agenda, or the business is sold. Some combination of all these might be possible.</p>
<p>But on the prospect of Crown reforming itself, Finanzio made the case that Crown could never again be trusted. </p>
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Read more:
<a href="https://theconversation.com/illegal-improper-unacceptable-revelations-about-crowns-casino-culture-just-get-worse-164084">Illegal, improper, unacceptable: revelations about Crown's casino culture just get worse</a>
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<p>The inevitability of any of the dire consequences painted by Crown if it loses its casino licence is also a question Finkelstein has kept open. Someone else might operate the casino, he has suggested. Given the profitability of the casino, why wouldn’t someone else want it?</p>
<p>But Crown doesn’t have much else to argue for why it should be allowed keep its casino licence. </p>
<p>It began spruiking these arguments to the state government more than a month ago, in a <a href="https://www.rccol.vic.gov.au/sites/default/files/2021-07/RC415%20Letter%20from%20ABL%20to%20Minister%20for%20Consumer%20Affairs%20Gaming%20and%20Liquor%2C%202%20July%202021%2C%20tendered%206%20July%202021.pdf">July 2 letter</a> to the Victorian minister for gaming. That letter has been interpreted by Finkelstein <a href="https://www.afr.com/chanticleer/crown-jumps-the-gun-with-crazy-finkelstein-ambush-20210708-p587zb">and others</a> as an attempt to short-circuit the royal commission’s findings. </p>
<p>Indeed, the whole point of the casino is to contribute to Victoria, as successive governments have argued.</p>
<p>So what, exactly, is this contribution?</p>
<h2>What Crown Melbourne gives …</h2>
<p>In 2018-19 (Crown’s last “normal” year of operation) <a href="https://www.abs.gov.au/statistics/economy/government/taxation-revenue-australia/2018-19">ABS data</a> shows the Melbourne casino contributed $268 million in gambling taxes to Victoria’s tax revenue. This amounts to 0.8% of state tax revenue (which was $29.2 billion in that year). </p>
<p>Overall, gambling taxes contributed 8.4% of state tax revenue. Poker machine gambling in pubs and clubs contributed 3.8% ($1.12 billion). </p>
<p>Crown Melbourne employs about 11,600 people. That’s about 0.32% of Victoria’s 3.45 million employes as of <a href="https://www.abs.gov.au/statisics/labour/employment-and-unemployment/labour-force-australia/mar-2021">March 2021</a>. It contributes about $30 million of the total $6.3 billion the state collects in payroll taxes. That’s about 0.45% of total payroll taxes, about 0.1% of total state tax revenue. </p>
<p>Thus, at the upper range, Crown contributes about 0.9% of state tax revenue.</p>
<h2>… and what it takes</h2>
<p>Of course 11,600 jobs are significant, as is $300 million a year in taxes.</p>
<p>But what is also significant is Crown’s disproportionate contribution to the <a href="https://responsiblegambling.vic.gov.au/resources/publications/the-social-cost-of-gambling-to-victoria-121/#:%7E:text=The%20research%20categorised%20the%20types,distress%2C%20depression%2C%20suicide%20and%20violence&text=%24600%20million%20%E2%80%93%20lost%20productivity%20and%20other%20work%2Drelated%20costs">$7 billion</a> in annual costs attributable to gambling harm in Victoria. </p>
<p>The casino also significantly contributes to the <a href="https://responsiblegambling.vic.gov.au/resources/publications/victorian-population-gambling-and-health-study-20182019-759/">36,000</a> Victorians who are, at any one time, directly affected by serious gambling problems, and to the estimated <a href="https://www.tandfonline.com/doi/abs/10.1080/14459795.2017.1331252?journalCode=rigs20">216,000</a> children, partners, employers and others connected to those gamblers who also suffer significant harm.</p>
<p>If Crown were to be placed into independent management, no one need lose their job — with the possible exception of a few board members and executives — and revenue would continue flowing to the state.</p>
<h2>Business as usual is not an option</h2>
<p>Whatever happens, business as usual at the casino cannot continue. </p>
<p>If effective responsible gambling interventions are put in place and properly observed, revenue will inevitably decline. If Crown’s permit to operate 1,000 “unlimited” poker machines is withdrawn or reduced (as it should be), revenue will decline. If it goes cashless and <a href="https://www.asgam.com/index.php/2021/03/09/crown-resorts-to-eliminate-all-indoor-smoking-at-australian-casinos-%0Aby-end-of-2022/">eliminates indoor smoking</a>, revenue will decline. If criminal syndicates can no longer use the casino to launder money, revenue will decline. </p>
<p>These impacts are the least that can be expected from a reasonable review of casino operating practices in Victoria. A new operator may also impose their own operational requirements, and look to reduce the workforce.</p>
<p>Crown is not and has never been a magic pudding, producing something from nothing. What it has done is transfer large sums to shareholders from many ordinary people (and a few, often criminally connected, high rollers). </p>
<p>The consequences of this have been considerable, in harm to gamblers and their families, to the integrity of Australia’s attempts to stop criminals laundering money, and to stamping out <a href="https://www.theage.com.au/national/crown-s-conclusion-the-buck-stops-with-the-andrews-government-20210804-p58fph.html">political corruption</a>.</p>
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Read more:
<a href="https://theconversation.com/how-sydneys-barangaroo-tower-paved-the-way-for-closed-door-deals-161816">How Sydney's Barangaroo tower paved the way for closed-door deals</a>
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<p>Whatever the royal commission recommends, the profitability of the casino will be affected, with consequences for the jobs and tax revenue it provides. </p>
<p>But the gains — involving a reduction in gambling harm, a strengthening of the rule of law, and the reinforcement of effective regulatory systems — are worth a great deal more.</p><img src="https://counter.theconversation.com/content/165659/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government and the Foundation for Alcohol Research and Education, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Finnish Alcohol Research Foundation, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He was a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens.</span></em></p>Crown Resorts’ contribution to Victoria is at the core of its attempts to keep its casino licence. But the costs of it keeping the casino may well be greaterCharles Livingstone, Associate Professor, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1620892021-06-04T02:17:30Z2021-06-04T02:17:30ZResponsible gambling – a bright shining lie Crown Resorts and others can no longer hide behind<p>This week the Victorian Royal Commission into Crown Resorts’ Melbourne casino heard from Sonja Bauer, Crown Melbourne’s general manager for responsible gambling. Her evidence revealed a series of deficiencies in the way Crown goes about its “responsible gambling” practices. </p>
<p>These include allowing a patron at the casino to gamble for <a href="https://thenewdaily.com.au/finance/2021/06/02/patron-crown-gambled-34-hours-straight-royal-commission/">34 hours straight</a>, and regularly letting people gamble for <a href="https://thenewdaily.com.au/news/2021/06/02/crown-problem-gamblers/">12 hours or more</a> before suggesting they take a break.</p>
<p>Bauer told the commission Crown Melbourne employed 12 staff as responsible gambling liaison officers. Their job is to monitor gamblers for signs of gambling harm. </p>
<p>Commissioner Ray Finkelstein (a former Federal Court judge) wondered how 12 staff could monitor a casino – one of the world’s biggest, with more than 2,600 gaming machines and 540 gaming tables – that attracted an average 64,000 visitors a day.</p>
<p>“I’m just trying to work out how a handful of people can look out for people suffering from gambling problems,” <a href="https://7news.com.au/news/crime/crown-withholds-responsible-gaming-papers-c-2984633">he told Bauer</a>. “It can’t be done. It is physically, humanly impossible.” </p>
<p>The 12 officers are, at least, an improvement from the seven employed up until 2019. That increase was brought about by the Victorian Commission for Gambling and Liquor Regulation’s <a href="https://www.vcglr.vic.gov.au/sites/default/files/sixth_review_of_the_casino_operator_and_licence.pdf">2018 review</a> of Crown Melbourne. </p>
<p>The review reported the seven officers spent most of their time dealing with breaches of <a href="https://www.gamblinghelponline.org.au/making-a-change/self-exclusion">self-exclusion orders</a> – by which people who recognise they have a gambling problem voluntarily ask gambling venues to keep them out – or queries about revoking self-exclusion. In 2017 and 2018 the officers identified an average of just 112 patrons a week exhibiting signs of potential gambling harm. </p>
<h2>An odd way to minimise harm</h2>
<p>The Victorian gambling regulator requires Crown Melbourne to operate with a “<a href="https://www.vcglr.vic.gov.au/sites/default/files/crown_melbourne_limited.pdf">responsible gambling code of conduct</a>”. This code states the casino will intervene when people display signs of harmful gambling. It advises that patrons will have access to the “YourPlay” system, to allow them to set limits on time and money spent gambling. </p>
<p>YourPlay has not been an overwhelming success in pubs and clubs, as a <a href="https://apo.org.au/sites/default/files/resource-files/2020-02/apo-nid277096.pdf">2019 evaluation</a> found. There has been significant uptake at the casino, however. This is because using it in conjunction with Crown’s loyalty program means gamblers can access the casino’s 1,000 unrestricted poker machines. These allow for unlimited bets, and can be operated continuously. </p>
<p>That’s why Crown was giving patrons plastic “picks” to jam the buttons of machines, so they could play without pushing the buttons. </p>
<p>The Victorian gambling regulator <a href="https://www.abc.net.au/news/2019-03-27/regulator-takes-action-against-crown-casino/10945328">banned this practice</a> after it was drawn to the regulator’s attention, but it did not impose a penalty. </p>
<h2>Not fit for purpose</h2>
<p>These arrangements seems like a strange way to minimise harm. In fact, “responsible gambling” has come under <a href="https://theconversation.com/australia-has-a-long-way-to-go-on-responsible-gambling-101320">significant criticism</a> in recent years.</p>
<p>Gambling operators adopted <a href="https://link.springer.com/content/pdf/10.1007/s10899-010-9214-0.pdf">the concept</a> to defend themselves against concern over the rising tide of gambling harm. This followed widespread gambling liberalisation in the latter part of the 20th century. </p>
<p>However, it is increasingly seen as <a href="https://www.sciencedirect.com/science/article/pii/S0033350620300822">not fit for purpose</a>. It is not concerned with preventing harm, and it frequently fails to minimise it. </p>
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Read more:
<a href="https://theconversation.com/australia-has-a-long-way-to-go-on-responsible-gambling-101320">Australia has a long way to go on responsible gambling</a>
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<p>A review I and colleagues did in 2014 found <a href="https://www.anzsog.edu.au/resource-library/research/what-is-the-evidence-for-harm-minimisation-measures-in-gambling-venues">little if any evidence</a> to support most responsible gambling “interventions”. Although there is evidence to support the idea that gamblers experiencing harm can be identified via observation, there is no evidence that intervening produces benefits. </p>
<p>And, of course, an intervention needs to occur – which the evidence from <a href="https://www.tandfonline.com/doi/full/10.1080/16066359.2017.1314465">venue observations</a> and from the royal commission this week suggests is very unlikely.</p>
<p>Crown Melbourne has 25 times more poker machines than the next largest Victorian venue. We know big venues are the most harmful. Crown should, arguably, have the most active harm prevention and minimisation system in the country. It doesn’t. Its approach to harm prevention and minimisation appears as well considered and implemented as its approach to money laundering.</p>
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Read more:
<a href="https://theconversation.com/size-really-does-matter-big-pokie-venues-are-the-most-dangerous-16350">Size really does matter: big pokie venues are the most dangerous</a>
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<h2>Treat this as a public health issue</h2>
<p>How can Crown Resorts, along with other gambling venues, stop the appearance, if not the reality, of being harm production factories?</p>
<p>Public health principles can readily be adopted to prevent and reduce gambling harm. Just as with the COVID-19 pandemic, tobacco control and motor vehicle injury reduction – in all of which Australia has been world-leading – public health can prevent gambling harm. </p>
<p>This means the “responsible gambling” mantra has to come to an end. </p>
<p>As colleagues and I argued in <a href="https://responsiblegambling.vic.gov.au/documents/640/Livingstone-identifying-effective-policy-interventions-June-2019.pdf">a 2019 report</a> prepared for the Victorian Responsible Gambling Foundation, public health can identify multiple “strategies, policies and interventions likely to prevent or minimise harm associated with gambling”.</p>
<p>First among these is a major overhaul of how gambling harm is viewed. Up to this point gambling harm has been seen as synonymous with the concept of the “problem gambler”. This term is stigmatising and effectively blames individuals, which of course <a href="https://www.tandfonline.com/doi/abs/10.1080/14459790701601810">suits an industry</a> eager to deflect responsibility. </p>
<p>Legislation should focus on the harms of gambling and how to prevent them. There are myriad effective ways to achieve this, including:</p>
<ul>
<li>cashless gambling systems based on accounts (as is to be <a href="https://www.theguardian.com/australia-news/2021/mar/16/rsl-and-leagues-clubs-to-trial-alternative-to-nsw-governments-gaming-card">trialled in NSW</a>, and operates in <a href="https://churchilltrustapp.secure.force.com/api/services/apexrest/v1/image/?Id=0697F00000lcW8MQAU&forceDownload=Yes">Norway</a>)</li>
<li>adopting statewide and effective self-exclusion systems</li>
<li>improving transparency of data about gambling activities at the casino and elsewhere</li>
<li>a better resourced and adequately powered regulator</li>
<li>distancing of gambling interests from political parties and government.</li>
</ul>
<p>Crown Resorts has been in the spotlight through the Victorian royal commission, the <a href="https://www.wa.gov.au/government/perth-casino-royal-commission">West Australian royal commission</a> into its Perth casino and the NSW Independent Liquor and Gaming Authority’s <a href="https://theconversation.com/its-hard-to-see-how-crown-resorts-can-be-found-fit-and-proper-to-run-sydneys-barangaroo-casino-150379">inquiry into its fitness</a> to operate the Barangaroo casino. But all forms of gambling can impose harms – none more so than poker machines. </p>
<p>Effective regulation can prevent harm. We know what to do. Ditching “responsible gambling”, the emptiest of empty vessels, would be a great start.</p><img src="https://counter.theconversation.com/content/162089/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government and the Foundation for Alcohol Research and Education, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Finnish Alcohol Research Foundation, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He was a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens.</span></em></p>Evidence to the Victorian Royal Commission into Crown’s Melbourne casino shows the emptiness of ‘responsible gambling’ strategies.Charles Livingstone, Associate Professor, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1328762020-04-01T02:06:13Z2020-04-01T02:06:13ZMost community bids to block pokies fail – the law is stacked against them too<p>Most Australians know you never end up winning on the pokies. What Australians might not know is that the odds of winning a case against a poker-machine proposal in their local neighbourhood are very poor too. My <a href="http://researchbank.rmit.edu.au/view/rmit:162956">recent study</a> shows the Victorian Commission for Gambling and Liquor Regulation (VCGLR) approved almost 90% of poker-machine licence applications that came before it.</p>
<p>Although the commission must consider the views of the local council when making decisions, <a href="https://www.abc.net.au/news/2020-03-03/city-of-casey-decision-on-new-pokies/12018258">council opposition rarely stops a proposal</a>. These cases are hard to fight and win. They are very expensive and demanding. Should a Victorian council brave the fight, the <a href="http://researchbank.rmit.edu.au/view/rmit:162956">odds of losing are as high as 80%</a>.</p>
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Read more:
<a href="https://theconversation.com/pokies-sport-and-racing-harm-41-of-monthly-gamblers-survey-81486">Pokies, sport and racing harm 41% of monthly gamblers: survey</a>
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<p>Not all councils have the resources or appetite for such a battle. This is a problem for councils and communities. Their frustration about the lack of local influence on regulatory decision-making adds to their concerns about gambling harm in their community.</p>
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<img alt="" src="https://images.theconversation.com/files/323444/original/file-20200326-133007-1ly88nm.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/323444/original/file-20200326-133007-1ly88nm.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/323444/original/file-20200326-133007-1ly88nm.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/323444/original/file-20200326-133007-1ly88nm.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/323444/original/file-20200326-133007-1ly88nm.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/323444/original/file-20200326-133007-1ly88nm.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/323444/original/file-20200326-133007-1ly88nm.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Even when councils oppose an application for a poker-machine venue, the applicant wins up to 80% of the time.</span>
<span class="attribution"><span class="source">Peter Hermes Furian/Shutterstock</span></span>
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<h2>There’s a reason councils rarely win</h2>
<p>The question is why are these cases so hard to win? Especially when the Victorian regulatory system – under the <a href="http://www5.austlii.edu.au/au/legis/vic/consol_act/gra2003190/">Gambling Regulation Act 2003</a> and the <a href="http://www5.austlii.edu.au/au/legis/vic/consol_act/paea1987254/">Planning and Environment Act 1987</a> – specifically acknowledges the importance of local influence on the distribution of poker machines.</p>
<p>Regulatory and quasi-court procedures are notoriously complex and resource-demanding; this includes poker-machine regulation. However, less attention and scrutiny have been given to the assumptions and principles underpinning gambling policy and procedures. This is the source of councils’ difficulty in winning a case against poker machines.</p>
<p>The VCGLR approves poker machine licences if it <a href="http://www5.austlii.edu.au/au/legis/vic/consol_act/gra2003190/s3.3.7.html">considers</a> the “net economic and social impact of approval will not be detrimental to the well-being of the community”. This “<a href="https://www.vcglr.vic.gov.au/sites/default/files/key_factors_in_deciding_egm_applications_-_2019_1.pdf">no net detriment test</a>” involves a guesstimate of potential costs and benefits in relation to a proposal’s overall community impact.</p>
<p>The premise is that harm can be absorbed into benefits to serve the community as a whole – the majority of people. It’s a utilitarian approach to gambling policy that implies social harm can be costed. This means the nation’s joy of gambling can outweigh vulnerable people’s misery.</p>
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Read more:
<a href="https://theconversation.com/how-flashing-lights-and-catchy-tunes-make-gamblers-take-more-risks-105852">How flashing lights and catchy tunes make gamblers take more risks</a>
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<p>Essentially, the VCGLR’s task is (indirectly) to estimate “how many happy gamblers does it take to make up for suicide, bankruptcy, domestic violence?”. All these <a href="https://responsiblegambling.vic.gov.au/resources/publications/the-social-cost-of-gambling-to-victoria-121/">social harms</a> have been <a href="https://responsiblegambling.vic.gov.au/resources/publications/assessing-gambling-related-harm-in-victoria-a-public-health-perspective-69">associated with gambling</a>. </p>
<p>This is crudely put, but it’s the social contract we enter into when accepting a cost-benefit approach to gambling policy.</p>
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Read more:
<a href="https://theconversation.com/areas-with-more-poker-machines-have-higher-rates-of-domestic-violence-66982">Areas with more poker machines have higher rates of domestic violence</a>
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<p>Apart from the ethical dilemma involved here, the cost-benefit approach to assessing poker-machine applications is highly problematic for local councils. </p>
<p>Social harm is notoriously difficult to cost. That makes it difficult to argue and easier to dismiss. The concerns that are most important to local communities cannot effectively be tabled on the regulatory agenda. </p>
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Read more:
<a href="https://theconversation.com/new-research-shows-pokie-operators-are-not-nearly-as-charitable-as-they-claim-124085">New research shows pokie operators are not nearly as charitable as they claim</a>
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<h2>The utilitarian approach is harmful</h2>
<p>Victoria’s regulatory system keeps the public debate focused on utility. The ethical basis of poker machines is neither addressed nor debated. </p>
<p>Getting better at costing gambling harm is not going to solve this problem for local councils. An assessment of utility implies the most vulnerable or disadvantaged members of a community must accept the harm burden of gambling so others can have more in the form the freedom to gamble and redistributed benefits - for example through state taxes derived from foker machine gambling. </p>
<p>Most of these poker machine taxes are drawn from these lower socio-economic areas. The inferior social and economic infrastructure of the <a href="https://theconversation.com/who-wins-from-big-gambling-in-australia-22930">disadvantaged areas</a> where <a href="https://link.springer.com/article/10.1023%2FA%3A1016847305942">pokies tend to be concentrated</a> adds to the injustice. </p>
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Read more:
<a href="https://theconversation.com/who-wins-from-big-gambling-in-australia-22930">Who wins from 'Big Gambling' in Australia?</a>
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<p>The broad distribution of poker machines and associated <a href="https://theconversation.com/pokies-sport-and-racing-harm-41-of-monthly-gamblers-survey-81486">high levels of harm</a> are evidence of the failure of this cost-benefit approach. Regulatory decision-making isn’t properly assessing the real cost and harm poker machines cause. </p>
<p>The current approach fails to give enough weight to local concerns and meaningful participation and representation. As a result, the system falls short of meeting public expectations of fair and just regulation.</p>
<p>If councils and communities are to get a fairer go, a different policy approach is needed. It needs to be able to better consider the impacts of poker machines on local communities and social justice more generally. It’s time to rethink the use of cost-benefit analysis as the basis for gambling policy - and social policy more broadly. </p>
<p>Gaming regulation across Australia currently protects a very fragile justification for poker machines as legitimate social and economic infrastructure. It serves the gambling industry and state interests better than the well-being of local communities. </p>
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Read more:
<a href="https://theconversation.com/vital-signs-why-governments-get-addicted-to-smoking-gambling-and-other-vices-115254">Vital Signs: why governments get addicted to smoking, gambling and other vices</a>
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<img src="https://counter.theconversation.com/content/132876/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mette Hotker does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How many happy gamblers, jobs and profits does it take to make up for the suicides, bankruptcies and domestic violence? Regulators must make cost-benefit guesstimates when considering applications.Mette Hotker, Lecturer in Social Planning, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/931892018-03-13T10:33:18Z2018-03-13T10:33:18ZFactCheck: would pokies reform in South Australia wipe out ‘many’ of 26,000 jobs?<figure><img src="https://images.theconversation.com/files/209872/original/file-20180312-30994-1tzmw8n.jpg?ixlib=rb-1.1.0&rect=4%2C3%2C1017%2C706&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Australian Hotels Association (South Australia) has campaigned against the SA Best party's proposed poker machine reforms.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/threthny/4853564182/in/photolist-8oTMx5-5QFRFa-4wy4pE-bA8vTo-bD7Z7u-4wy3QQ-9BUVPQ-6wLx96-KcQZ4j-4wy4tG-8sHLLK-AWggWg-4wtUrH-4EStJF-4NA64S-8j1Nea-8ypaEx-7DTtwD-asQgRY-7Zi8H3-brw3CQ-asQgTm-p8WtE-p8TF8-p8JR3-p8KL9-p8JkF-4ESu6c-4wy5f3-dMW9LX-4wy5by-8Fdwbz-6ezmJt-4wtTtg-4wy3M5-nepi4-8kr4kt-9bZVNf-4wtUki-BTuBzv-4wy4cU-7snQNm-8J8PhA-fr6Gnu-Kf9kF5-JjtovB-Ki4J3k-4wy48q-4wtT8z-4wtTMB">Threthny/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><blockquote>
<p>This plan will decimate hotels across South Australia, wiping out many of the 26,000 jobs it directly creates.</p>
<p><strong>Australian Hotels Association (South Australia) chief executive Ian Horne, <a href="https://www.theguardian.com/australia-news/2018/feb/19/sa-best-gambling-policy-deal-maker-and-deal-breaker-nick-xenophon-says">quoted in The Guardian</a>, February 21, 2018</strong></p>
<p>… a majority of pub employees (over 26,000 in SA!) will likely lose their jobs.</p>
<p><strong><a href="https://cdn.theconversation.com/static_files/files/32/Lonsdale_Letter.pdf?1520471911">Letter</a> signed by the McCallum family, owners of The Lonsdale Hotel, February-March, 2018</strong> </p>
</blockquote>
<p>SA Best leader Nick Xenophon has said that if his party wins the balance of power in this Saturday’s South Australian state election, poker machine reform would be “a key issue in any negotiations” about the formation of the next government. </p>
<p>Among other reforms, Xenophon has <a href="https://sabest.org.au/state-policies/gambling-reform/">proposed</a> a reduction in the number of poker machines in some pubs by 50% over five years, and the introduction of a $1 maximum bet per spin for machines in all venues other than the Adelaide casino. </p>
<p>The South Australian branch of the Australian Hotels Association (AHA SA), led by chief executive Ian Horne, says the SA Best policy would “decimate hotels across South Australia, wiping out many of the 26,000 jobs it directly creates”. </p>
<p>A <a href="https://cdn.theconversation.com/static_files/files/32/Lonsdale_Letter.pdf?1520471911">letter signed</a> and shared by the owners of one Adelaide hotel went further, saying “a majority” of 26,000 South Australian pub employees would “likely lose their jobs”.</p>
<p>Is that right?</p>
<h2>Checking the source</h2>
<p>In response to a request for sources to support the claim made in the Lonsdale Hotel letter, Keith McCallum referred The Conversation to the AHA SA. </p>
<p>A spokesperson for the AHA SA pointed The Conversation to a <a href="https://cdn.theconversation.com/static_files/files/38/Ferrier_Hodgeson_Newsletter_February_2018.pdf?1520737924">February 2018 newsletter</a> from Ferrier Hodgson Adelaide partner David Kidman, and the <a href="http://www.nowaynick.com.au/">‘No Way Nick’ website</a>, authorised by AHA SA chief executive Ian Horne.</p>
<p>The Conversation asked the AHA spokesperson to quantify what the association meant by “many” jobs, but did not receive a response to that question.</p>
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<h2>Verdict</h2>
<p>The claim made by Australian Hotels Association of South Australia that proposed poker machine reforms would wipe out “many of the 26,000 jobs” in the South Australian hotel industry appears to be grossly exaggerated.</p>
<p>The Australian Hotels Association did not provide modelling or evidence to show how “many” jobs might be affected.</p>
<p>The number of gaming related jobs in South Australian hotels in 2015 was around 3,000. In the same year, less than 20% of the South Australian hotel industry’s revenue came from gaming. </p>
<p>The reforms proposed by SA Best aim to reduce the number of poker machines in some hotels, and reduce maximum bet limits, rather than removing the machines entirely. </p>
<p>Based on these factors, the Australian Hotels Association claim greatly overstates potential job losses.</p>
<p>In addition, at least some of the money not spent on poker machines would be spent on other recreational activities.</p>
<p>This means that potential job losses due to poker machine reforms may be partially offset by increases in employment elsewhere in the economy – or even within the same hotels.</p>
<hr>
<h2>What changes is SA Best proposing?</h2>
<p>Among a suite of reforms, the SA Best party <a href="https://sabest.org.au/state-policies/gambling-reform/">wants</a> to reduce the number of poker machines in pubs with 10 or more machines by 10% each year over the next five years. This reduction wouldn’t apply to not-for-profit community clubs or the Adelaide Casino. </p>
<p>SA Best is also proposing the introduction of a $1 maximum bet per spin and a maximum win of $500 for machines in pubs and and not-for-profit community clubs. </p>
<p>SA Best leader Nick Xenophon said these reforms would reduce the number of poker machines in South Australia from <a href="http://www.ahasa.com.au/__files/f/19639/Economic_Contribution_of_the_Hotel_Industry_in_South_Australia.pdf">around 12,000</a> to around 8,000, and reduce potential personal losses on pokies in pubs and community clubs from around $1,200 an hour to around $120 per hour.</p>
<p>The policy includes a poker machine buyback scheme, a “jobs fund” to assist affected employees, and the possibility of compensation for smaller poker machine operators.</p>
<h2>Would ‘many of 26,000 jobs’ be wiped out?</h2>
<p>First of all, let’s look at how many people work in the hotel industry in South Australia, and how many of those jobs are related to gaming. </p>
<p>This information is not available from the Australian Bureau of Statistics.</p>
<p>However, in January 2016, the South Australian Centre for Economic Studies published a <a href="http://www.ahasa.com.au/__files/f/19639/Economic_Contribution_of_the_Hotel_Industry_in_South_Australia.pdf">report</a> that examined the economic contribution of the hotel industry in South Australia. </p>
<p>The report was commissioned by the AHA SA, but it adopts a sound statistical approach to measuring employment in the hotel sector.</p>
<p>According to that report, a total of 26,250 staff were employed in hotels in South Australia in 2015. Of those, 3,048 were classified as gaming staff (or 11.6% of total employment).</p>
<p>Of the 26,250 people employed across the industry, the majority were casual staff (rather than permanent or part-time staff).</p>
<p>The SA Best proposal is to reduce poker machine numbers and maximum bets in some venues, as opposed to removing pokies entirely. So it’s clear that not all 3,000 gaming staff would be at risk.</p>
<p>However, the AHA SA is arguing that reduced revenue from pokies would threaten other jobs. </p>
<p>According to the same <a href="http://www.ahasa.com.au/__files/f/19639/Economic_Contribution_of_the_Hotel_Industry_in_South_Australia.pdf">report</a>, in 2015, 17% of the South Australian hotel industry’s annual revenue came from gaming. Around 80% of revenue came from liquor sales, food and beverage sales and accommodation.</p>
<p>So even in light of reduced gaming revenue, assertions that “many” or “the majority” of 26,000 pub employees would be affected appear to be unsubstantiated. </p>
<iframe src="https://datawrapper.dwcdn.net/fN5nA/3/" scrolling="no" frameborder="0" allowtransparency="true" width="100%" height="400"></iframe>
<h2>Jobs may be shifted elsewhere</h2>
<p>To understand what might happen if Xenophon’s proposed reforms were introduced, we need to take two factors into account.</p>
<p>On the one hand, if less money is spent on poker machines, then the number of hours requested to service gaming activities decreases. This could result in less demand for labour, and hence a potential reduction in the number of those roles.</p>
<p>On the other hand, money not spent on gaming could be redirected to other recreational activities – like going to cafes, restaurants and cinemas – or to the retail sector. This would mean that new jobs would be created in other parts of the economy. </p>
<p>Spending diverted to food and beverage sales and other forms of entertainment could also see new jobs created within the same venues.</p>
<p>Another <a href="https://www.adelaide.edu.au/saces/docs/the-south-australian-gambling-industry.pdf">report conducted in 2006</a> by the South Australian Centre for Economic Studies, commissioned by the South Australian Independent Gambling Authority, found that following the introduction of electronic gaming machines in South Australia, employment in hotels did increase. </p>
<p>However, most of this increase came at the expense of other businesses, like cafes and restaurants. This shows that there is a strong substitution effect in employment between gaming activities and other recreational activities. </p>
<p>Having been published in 2006, the exact numbers in the report are dated. But the qualitative argument is unlikely to have changed. This conclusion is also supported by <a href="https://www.socialactionresearchcentre.org.au/wp-content/uploads/Removing-poker-machines-from-hotels-and-clubs-in-Tasmania-Economic-Considerations.pdf">more recent studies</a>.</p>
<p>In summary, while some of the 3,000 gaming-related jobs in the hotel industry may be lost as a result of the proposed poker machine reforms, claims that “many” or “the majority” of 26,000 jobs would be lost are grossly exaggerated, and not supported by available evidence or existing research. <strong>– Fabrizio Carmignani</strong></p>
<h2>Blind review</h2>
<p>I agree with the conclusions of this FactCheck.</p>
<p>The assertions that “a majority” or “many” of the 26,000 jobs in the South Australian hotel industry would be lost if the proposals put forward by SA Best were to be implemented are gross exaggerations.</p>
<p>They might not be quite as gross an exaggeration as the <a href="https://theconversation.com/factcheck-are-around-5-000-jobs-at-risk-if-pokies-are-removed-from-pubs-and-clubs-in-tasmania-91149">analogous assertions</a> made in Tasmania during that state’s recent election campaign, but they are an exaggeration, nonetheless. <strong>– Saul Eslake</strong></p>
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<p><strong>The Conversation is fact-checking the South Australian election. If you see a ‘fact’ you’d like checked, let us know by sending a note via <a href="mailto:checkit@theconversation.edu.au">email</a>, <a href="http://www.twitter.com/conversationEDU">Twitter</a> or <a href="http://www.facebook.com/conversationEDU">Facebook</a>.</strong></p>
<p><strong>The Conversation thanks <a href="https://theconversation.com/the-conversation-is-fact-checking-the-south-australian-election-and-we-want-to-hear-from-you-92809">The University of South Australia</a> for its support.</strong></p>
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<span class="caption">The Conversation FactCheck is accredited by the International Fact-Checking Network.</span>
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<p><em>The Conversation’s FactCheck unit was the first fact-checking team in Australia and one of the first worldwide to be accredited by the International Fact-Checking Network, an alliance of fact-checkers hosted at the Poynter Institute in the US. <a href="https://theconversation.com/the-conversations-factcheck-granted-accreditation-by-international-fact-checking-network-at-poynter-74363">Read more here</a>.</em></p>
<p><em>Have you seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at <a href="mailto:checkit@theconversation.edu.au">checkit@theconversation.edu.au</a>. Please include the statement you would like us to check, the date it was made, and a link or a photo if possible.</em></p><img src="https://counter.theconversation.com/content/93189/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Fabrizio Carmignani received funding from the Australian Research Council for a project on the estimation of the linear continuous piecewise model and its application in macroeconomics.</span></em></p><p class="fine-print"><em><span>Saul Eslake does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Australian Hotels Association of South Australia claims poker machine reforms proposed by Nick Xenophon’s SA Best party would wipe out ‘many of the 26,000’ jobs in the hotel industry. Is that right?Fabrizio Carmignani, Professor, Griffith Business School, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/922982018-03-04T02:54:21Z2018-03-04T02:54:21ZHodgman rides Tasmanians’ disdain for minority government to a second term in office<figure><img src="https://images.theconversation.com/files/208781/original/file-20180303-65541-vtrnwv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Tasmanian election result was an emphatic win for Will Hodgman, but he lost a fair bit of skin along the way.</span> <span class="attribution"><span class="source">AAP/Julian Smith</span></span></figcaption></figure><p>In an era of single-term governments and growing electoral volatility in Australia, the return of Will Hodgman’s Liberal government at Saturday’s Tasmanian election with <a href="http://www.abc.net.au/news/elections/tas-election-2018/results/">more than 50% of the primary vote</a> is significant – and will have national implications.</p>
<p>The Turnbull government will take comfort from a result that demonstrates voters – even in left-leaning Tasmania – are prepared to re-elect a competent Liberal government that has delivered strong economic and employment growth.</p>
<p>It was a strong result for the Liberals. However, the outcome was shaped as much by Tasmania’s distinctive political practices and local issues as it was by national trends.</p>
<p><a href="https://theconversation.com/removing-pokies-from-tasmanias-clubs-and-pubs-would-help-gamblers-without-hurting-the-economy-90019">Pokies</a>, housing, hospitals, and – at the 11th hour – <a href="https://www.theguardian.com/australia-news/2018/mar/02/tasmanian-liberal-government-promises-to-soften-gun-laws">watering down gun laws</a> might have been the specific issues that dominated the campaign, but the decisive factor was Tasmanians’ enduring apprehension about minority government.</p>
<p>The legacies of Labor-Green minority government of the early 1990s and between 2010 and 2014 cast a long shadow during the 2018 campaign. Both periods are associated with economic decline, rising unemployment, and budget cuts. </p>
<p>While there is little evidence to suggest minority government has been a cause of poor economic outcomes in Tasmania – it is more that these governments were unlucky and found themselves in charge after national downturns – the fact remains that Tasmanians have a strong preference for majority government.</p>
<p>Given this history, undecided Tasmanian voters tend to back the major party that’s most likely to form majority government. This was evident in both 2006 and 2014, and was always going to be a feature of the 2018 campaign given memories of the 2012-13 recession in Tasmania are still fresh in voters’ minds. And the Liberal government, which was elected in 2014, has delivered strong economic growth. </p>
<p>It is this bandwagon effect that helps explain why support for the government increased by ten points over the course of the campaign, rather than going to minor parties – as has been the case elsewhere.</p>
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<a href="https://theconversation.com/liberals-romp-to-emphatic-victory-in-tasmanian-election-92180">Liberals romp to emphatic victory in Tasmanian election</a>
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<h2>What now for the Liberals?</h2>
<p>The final result was an emphatic win for Hodgman. But it is also fair to say he lost a bit of skin along the way, due to the Liberals’ big-budget, brutally effective advertising campaign seeming to have been <a href="http://www.abc.net.au/news/2018-02-24/labor-will-win-against-cashed-up-liberals-tas-party-pres-says/9481524">funded by gaming interests</a>.</p>
<p>The reality is that Tasmania remains deeply divided on pokies and the means the gaming industry uses to protect its interests.</p>
<p>Tasmanians voted for political and economic stability on Saturday, but an overwhelming majority <a href="http://kevinbonham.blogspot.com.au/2018/03/tasmania-2018-commissioned-pokies.html">support Labor’s policy</a> of phasing pokies out of pubs and clubs over a five-year period.</p>
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Read more:
<a href="https://theconversation.com/removing-pokies-from-tasmanias-clubs-and-pubs-would-help-gamblers-without-hurting-the-economy-90019">Removing pokies from Tasmania's clubs and pubs would help gamblers without hurting the economy</a>
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<p>The pokies debate is far from over. Hodgman must commit to open and transparent government, and subject his gaming policies to full parliamentary scrutiny in an attempt to regain the electorate’s trust. Opposition parties also have a role to play, and must be willing to compromise to find some middle ground.</p>
<h2>The election’s losers</h2>
<p>The result wasn’t a disaster for Labor. </p>
<p>Rebecca White, after securing the Labor leadership only a year ago, performed strongly during the campaign and has consolidated her credentials as a future premier. That she will be leading a stronger opposition bolstered by handful of up-and-coming new MPs also bodes well for Labor’s future.</p>
<p>The real losers in the election were the Greens and Jacqui Lambie. </p>
<p>In contrast to their success in inner-Melbourne and Sydney, the Greens have been struggling in Tasmania in recent years. The explanation for their decline in their former heartland can be attributed to the legacies of the last government, the absence of a high-profile local environmental issue, and that Labor, under White, has championed many of their core progressive causes.</p>
<p>Lambie and her party could have been the wildcard of this election, but she has had a tough summer and will have to fight hard to salvage her political career. Had Lambie herself run as a candidate on Saturday, it’s likely she would have been elected – and could have held the balance of power in the lower house. </p>
<p>Strangely, given that personalities and name recognition are so important in Tasmanian elections, she ran a ticket of grassroots candidates under her Jacqui Lambie Network banner that, as expected, failed to secure any serious support.</p>
<h2>Lessons for the future</h2>
<p>As the dust settles, we can draw a few conclusions from the Tasmanian election result.</p>
<p>Above all else, Tasmanians are a pragmatic bunch and are prepared to reward a government that delivers political stability and good economic outcomes.</p>
<p>The campaign also highlighted the power of sectional interests – be they mining, gaming or other actors – in Australian politics. The collective health of our democracy depends on curbing the influence of these groups at both the state and federal level.</p>
<p>Given the distinctive dynamics of Tasmanian politics, not too much can be read into the swing away from minor and protest parties and back to the majors. Perhaps the real test of the national political mood will come in South Australia on Saturday week.</p><img src="https://counter.theconversation.com/content/92298/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Eccleston does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Pokies, housing, hospitals and gun laws might have been the specific issues that dominated the campaign, but the decisive factor was Tasmanians’ enduring apprehension about minority government.Richard Eccleston, Professor of Political Science; Director, Institute for the Study of Social Change, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/925842018-03-01T06:20:43Z2018-03-01T06:20:43ZWoolies is just one of many gambling companies using spying and other techniques to lure gamblers<figure><img src="https://images.theconversation.com/files/208429/original/file-20180301-152555-9zt4j8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Gamblers feel connected to the machine as hospitality keeps them playing for longer. </span> <span class="attribution"><span class="source">Gary Knight/flicr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Woolworths is reported to be <a href="https://www.smh.com.au/business/companies/clear-breach-watchdogs-to-probe-woolworths-pokies-pubs-20180228-p4z266.html">instructing staff</a> to ply gamblers with food and drink and to keep dossiers on the private lives. And while Woolworths has been singled out for systematically requiring these kind of practices from their staff, the company is <a href="https://doi.org/10.1080/16066359.2017.1314465">hardly alone in putting profits ahead of gambler’s well-being</a>. </p>
<p>Poker-machine operators have good reason to treat their customers like this. Their primary goal is to take as much money from their customers as possible, and with poker machines, this means easing gamblers “into the zone”.</p>
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Read more:
<a href="https://theconversation.com/factcheck-are-around-5-000-jobs-at-risk-if-pokies-are-removed-from-pubs-and-clubs-in-tasmania-91149">FactCheck: are 'around 5,000 jobs' at risk if pokies are removed from pubs and clubs in Tasmania?</a>
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<p>“The zone” is the term that frequent poker-machine gamblers often use to describe the altered state they enter into when gambling on pokies. The experience of entering the zone - and even the term itself - has been independently described by gamblers in studies in <a href="https://doi.org/10.1080/16066350500338161">Australia</a> and the <a href="https://press.princeton.edu/titles/9156.html">United States</a>.</p>
<p>Gamblers describe it as an out-of-body experience. As <a href="https://press.princeton.edu/titles/9156.html">one gambler put it</a>: </p>
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<p>You aren’t really there, you’re with the machine and that’s all you’re with. </p>
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<p>Or in the words of another gambler:</p>
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<p>I feel connected to the machine when I play, like it’s an extension of me, as if physically you couldn’t separate me from the machine.</p>
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<p>But the zone is also an expensive state to access. <a href="https://www.pc.gov.au/inquiries/completed/gambling-2009/report">Gambling on pokies costs</a> - on average - around A$120 per hour, or up to A$1,200 per hour if machines are played to their maximum capacity.</p>
<p>It’s when their customers are in the zone that poker-machine venues are at their most profitable.</p>
<h2>Easing gamblers into ‘the zone’</h2>
<p>Poker-machines are specifically engineered to ease people into the zone and to keep them there, according to <a href="https://press.princeton.edu/titles/9156.html">emerging evidence</a>. But in order for people to enter the zone, people must play the machines, and preferably play uninterrupted. This is where the tactics of venues like Woolworths loom large.</p>
<p>Venues use a wide range of tactics to get gamblers in through the door and in front of machines. </p>
<p>First of all, poker-machine venues are located in convenient locations, near to high traffic transport routes, shopping centres and the like. This facilitates frequent visits, and venues try to decrease the <a href="https://theconversation.com/too-close-to-home-people-who-live-near-pokie-venues-at-risk-20771">distance from your home to the closest poker-machine venue</a>.</p>
<p>For the same reasons, gambling venues are open very long hours. Operators want poker machines to be available should you need somewhere to go at 3am.</p>
<p>Indeed, poker-machine operators also go to extraordinary lengths to make their venues feel comfortable and welcoming. Operators have known for decades that the venue environment is crucial to facilitate profitable gambling. A cottage industry of research has sprung up in recent years to better help casino managers understand what sort of venues will keep gamblers feeling at ease.</p>
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Read more:
<a href="https://theconversation.com/no-pokies-xenophon-goes-for-some-pokies-but-does-his-gambling-policy-go-far-enough-92038">'No pokies' Xenophon goes for 'some pokies', but does his gambling policy go far enough?</a>
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<p>For example, a <a href="https://www.researchgate.net/profile/Nerilee_Hing/publication/260418885_Servicescape_features_and_preferred_gambling_venue/links/02e7e53113e14a17cf000000/Servicescape-features-and-preferred-gambling-venue.pdf">2011 study of pokie venue gamblers in Australia</a> found there were certain gambler-friendly qualities of the venue which could be improved on to attract more gamblers. These included free refreshments; attentive customer service; safety and security; loyalty programs; and comfortable seating. </p>
<p><a href="https://www.amazon.com/Designing-casinos-dominate-competition-international/dp/0942828445">Casino design manuals</a> go into great detail about how the manipulation of casino atmospheres can encourage people to stay and play. These manuals state that lighting should be steady and even, and should be angled away from gamblers faces. </p>
<p>Smells are said to affect gamblers’ <a href="https://doi.org/10.1016/j.ijhm.2010.10.003">decisions to continue gambling or leave</a>, and so venues regulate them. Special attention is given to keeping out bad odours. In casinos, even architectural decisions such as ceiling height are calibrated to <a href="https://doi.org/10.1016/j.ijhm.2010.10.003">maximise gamblers’ “cognitive satisfaction”</a>.</p>
<p>Ambient music shouldn’t be too loud or too soft, and should be deflected, reverberating off walls rather than directed into gamblers faces. And music coming from the poker machines themselves shouldn’t be too jarring lest it distract the gambler, or <a href="http://iga.sa.gov.au/sites/default/files/public/basic_page_attachments/20/109/1782961943/Relevance-and-role-of-gaming-machine-games-and-features-on-problem-gamblers-2008-web.pdf">attract too much attention to a win</a>.</p>
<p>All these amount to providing what <a href="https://link.springer.com/article/10.1007/s11469-009-9256-7">one study has termed “social accessibility”</a>, the degree to which venues provide safe, friendly and easy places to visit - and to stay. The relationship with venue staff is central to this, as one problem gambler from the same study put it, “[In] all my preferred venues they [the staff] know me quite well”. It is this social accessibility that appears to be being manipulated by unscrupulous operators.</p>
<p>On a grander scale, US casinos use big data to devise tailored marketing strategies which will pull people back in. Recent court findings have shown that US casino giant Caeser’s values its <a href="https://www.wsj.com/articles/in-caesars-fight-data-on-players-is-real-prize-1426800166">customer database</a> at more than US$1 billion dollars. </p>
<p>While Australian pubs and clubs are not allowed to promote poker machines directly, they are able to cross-promote other events that might serve as vehicles to bring patrons into the venue, and thus facilitate a gambling session. </p>
<p>Venues also offer a place where children are encouraged to come and play. Not only does this facilitate the gambling of their parents and carers, but hearing or seeing adults gamble may serve to normalise the practice for the next generation. In particular, new research has found that marketing, especially of family-friendly events, <a href="https://doi.org/10.3109/16066359.2015.1093121">is influential in shaping children’s and adults’ perceptions of gambling venues and products</a> and thereby increase the likelihood that children will gamble when they grow up.</p>
<h2>When good hospitality becomes harmful</h2>
<p>All of these measures are designed to make gamblers as comfortable and relaxed in venues as possible. So why is this a problem? </p>
<p>In short, poker machines are highly addictive and cause a <a href="https://www.pc.gov.au/inquiries/completed/gambling-2009/report">great deal of harm</a>. Subtle manipulation of gambling venues are tested and tweaked by operators to maximise the chance that someone will come in, play the poker machines, and keep on playing. </p>
<p>What may look like good hospitality, is in effect a subtle - or in the case of Woolworths not so subtle - attempt to keep people gambling after the point at which they would otherwise have stopped.</p>
<p>The <a href="https://www.smh.com.au/business/companies/clear-breach-watchdogs-to-probe-woolworths-pokies-pubs-20180228-p4z266.html">Woolworths revelations</a> demonstrate once again that poker-machine venues can’t be trusted to self-regulate in the best interests of their patrons.</p>
<p>Industry practices such as <a href="https://doi.org/10.1080/16066359.2017.1314465">codes of conduct</a> - and the “responsible gambling” mantra - are simply inadequate when venues have a business model reliant on harmful levels of gambling.</p><img src="https://counter.theconversation.com/content/92584/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Francis Markham has received funding from, or been employed on projects that received funding from, the Australian Research Council, the Community Benefit Fund of the Northern Territory, the ACT Gambling and Racing Commission and the Australian Department of the Prime Minister and Cabinet. He has had his travel expenses to speak at an international conference paid for by the Alberta Gambling Research Institute, an organisation that is funded by the provincial government of Alberta. He is a member of the Public Health Association of Australia, a not-for- profit organisation whose activities include advocacy on public health issues including gambling.</span></em></p><p class="fine-print"><em><span>Martin Young has previously received research funding from the Australian Research Council, Gambling Research Australia, and several state government departments. His research is currently funded by the Community Benefit Fund of the Northern Territory Government. In addition to his SCU position, he a Visiting Fellow, Fenner School of Environment and Society, ANU.</span></em></p>Pokies companies want to keep their customers “in the zone”, that’s why they spend so much to keep tabs on them.Francis Markham, Research Fellow, College of Arts and Social Sciences, Australian National UniversityMartin Young, Associate Professor, School of Business and Tourism, Southern Cross UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/920382018-02-20T23:22:22Z2018-02-20T23:22:22Z‘No pokies’ Xenophon goes for ‘some pokies’, but does his gambling policy go far enough?<figure><img src="https://images.theconversation.com/files/207017/original/file-20180219-116327-1xls5ni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The evidence behind Nick Xenophon's proposed gambling reforms in South Australia is reasonably strong. </span> <span class="attribution"><span class="source">AAP/Morgan Sette</span></span></figcaption></figure><p>SA-Best, led by high-profile former senator Nick Xenophon, has announced its <a href="https://sabest.org.au/media/sa-best-gambling-reform-policies-will-dramatically-reduce-pokies-addiction-and-community-harm/">gambling policy</a> ahead of next month’s South Australian election. Xenophon has backed away from the “no pokies” policy that characterised his earlier approach to gambling reform. However, the evidence behind his party’s proposed suite of measures is reasonably strong. </p>
<h2>What’s in the policy?</h2>
<p>Key aspects of SA-Best’s proposal are:</p>
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<li><p>a five-year plan to cut poker machines numbers in South Australia from 12,100 to 8,100;</p></li>
<li><p>a reduction in maximum bets to A$1, from the current $5;</p></li>
<li><p>a reduction in maximum prizes from $10,000 to $500;</p></li>
<li><p>removing particularly addictive features such as <a href="https://theconversation.com/poker-machines-and-the-law-when-is-a-win-not-a-win-49580">“losses disguised as wins”</a>;</p></li>
<li><p>prohibition of political donations from gambling businesses; and</p></li>
<li><p>the removal of EFTPOS facilities from gambling venues.</p></li>
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<p>The policy would also empower the state’s <a href="http://iga.sa.gov.au/">Independent Gambling Authority</a> to implement and evaluate these proposals. </p>
<p>The policy is targeted at commercial hotel operators; clubs, “community hotels” and the casino are exempt from the reduction provisions. </p>
<p>There are also proposals to cut trading hours from 18 to 16 per day, with the introduction of a seven-year pokie licence for venues, from January 1, 2019. Increased resources would go to counselling and support for those with gambling problems.</p>
<p>Notably absent from the policy is the introduction of a <a href="https://aifs.gov.au/agrc/sites/default/files/publication-documents/agrc-precommitment-limit-setting.pdf">pre-commitment</a> system, which would enable pokie users to decide in advance how much they want to spend. Along with $1 maximum bets, this was a key recommendation of a <a href="https://www.pc.gov.au/inquiries/completed/gambling-2009/report">Productivity Commission inquiry</a> in 2010.</p>
<p>The policy has attracted the <a href="https://www.theshout.com.au/australian-hotelier/xenophons-gaming-policy-blasted-aha-sa/">expected response</a> from the gambling industry. The Australian Hotels Association argued the changes would “rip the guts” out of the gambling industry and attack the “26,000 jobs” it claims the industry directly creates.</p>
<h2>Does evidence support SA Best’s policies?</h2>
<p>We’ve known for some time that <a href="https://theconversation.com/a-1-maximum-bet-on-pokies-would-reduce-gambling-harm-22931">reducing maximum bets</a> is likely to reduce the amount wagered by people experiencing severe gambling problems. This in turn reduces the harm they suffer.</p>
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<a href="https://theconversation.com/a-1-maximum-bet-on-pokies-would-reduce-gambling-harm-22931">A $1 maximum bet on pokies would reduce gambling harm</a>
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<p>Reducing maximum prizes reduces “<a href="https://aifs.gov.au/agrc/publications/how-electronic-gambling-machines-work/structural-characteristics-egms">volatility</a>”, meaning pokies may have more consistent loss rates.</p>
<p>Reducing access to pokies is also an important intervention, since easy access is a <a href="https://theconversation.com/too-close-to-home-people-who-live-near-pokie-venues-at-risk-20771">key risk factor</a> for developing a gambling problem. Reducing the number of machines, and the hours they are accessible, support this. </p>
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Read more:
<a href="https://theconversation.com/too-close-to-home-people-who-live-near-pokie-venues-at-risk-20771">Too close to home: people who live near pokie venues at risk</a>
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<p>However, <a href="https://www.adelaide.edu.au/saces/docs/study-of-the-impact-of-caps-on-electronic-gaming-machines.pdf">very substantial cuts in pokie numbers</a> are needed to meaningfully reduce harm. A cut of the magnitude SA-Best proposes may not be sufficient to prevent those with serious gambling habits from readily accessing pokies. This is because pokies are rarely fully utilised at all times of the week.</p>
<p>Removing <a href="https://www.responsiblegambling.vic.gov.au/__data/assets/pdf_file/0007/26881/Thomas-A-Evaluation-of-the-removal-of-ATMs-Victoria-Sept-2013.pdf">easy access to cash</a> has also been identified as an important harm-reduction intervention. This had a positive initial effect in Victoria (especially among high-risk gamblers), when ATMs were removed from pokie venues in 2012.</p>
<p>The harms associated with gambling generally affect <a href="http://www.tandfonline.com/doi/abs/10.1080/14459795.2017.1331252?journalCode=rigs20">far more people</a> than just the gambler. The <a href="http://www.problemgambling.sa.gov.au/professionals/news_and_events/news-items/release-of-the-2012-gambling-prevalence-study-in-south-australia?a=13625">most recent study</a>, from 2012 indicates that 0.6% of the SA adult population is classified as at high risk of gambling harm, 2.5% are classified as at moderate risk, and another 7.1% at low risk.</p>
<p>Based on <a href="http://www.censusdata.abs.gov.au/census_services/getproduct/census/2016/communityprofile/4?opendocument">census data</a>, this equates to about 8,000 South Australians experiencing severe harm from gambling. Another 33,100 are experiencing significant harm, and about 94,000 are experiencing some harm.</p>
<p>However, each high-risk gambler affects six others; each moderate-risk gambler affects three others; and each low-risk gambler one other. So, the problems of each high-risk gambler affect another 47,660 South Australians. These are children, spouses, other relatives, friends, employers, the general community via the costs of crime, and so on. </p>
<p>Another 99,300 are affected by moderate-risk gambling, and another 94,000 by low-risk gambling. All up, this amounts to 241,000 people.</p>
<p>Of these, 190,000 are affected at high or significant levels. <a href="http://www.responsiblegambling.vic.gov.au/__data/assets/pdf_file/0007/28465/Browne_assessing_gambling-related_harm_in_Vic_Apr_2016-REPLACEMENT2.pdf">These harms include</a> financial disaster and bankruptcy, divorce or separation, neglect of children, intimate partner violence and other violent crime, crimes against property, mental and physical ill-health, and in some cases, suicide.</p>
<p>Most gambling problems (around 75%) <a href="https://www.pc.gov.au/inquiries/completed/gambling-2009/report/gambling-report-volume1.pdf">are related to pokies</a>, and by far the greatest expenditure goes through them. Nothing has changed in this regard since the Productivity Commission identified this in 2010.</p>
<p>In this context, SA-Best’s policy has substantial justification.</p>
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Read more:
<a href="https://theconversation.com/removing-pokies-from-tasmanias-clubs-and-pubs-would-help-gamblers-without-hurting-the-economy-90019">Removing pokies from Tasmania's clubs and pubs would help gamblers without hurting the economy</a>
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<h2>Does it go far enough?</h2>
<p>The <a href="http://www.abc.net.au/news/2018-01-20/greens-target-xenophon-with-policy-to-ban-pokies-angering-hotels/9344960">South Australian Greens</a>, like their <a href="http://www.abc.net.au/news/2017-10-16/greens-to-force-tas-labor-hand-on-pokies-policy/9055102">counterparts in Tasmania</a> and the Tasmanian Labor Party, want to get all pokies out of pubs and clubs. They argue gambling’s social and economic costs are far in excess of the benefits. </p>
<p>For Tasmania, the costs of gambling can be estimated at about <a href="http://www.tai.org.au/content/estimating-revenue-share-farrell-group-and-other-gambling-industry-participants-gambling">$342 million per year</a>. This is more than three times as much as the total tax take from all gambling in the state.</p>
<p>A similar calculation for South Australia suggests its overall costs of problem gambling are more than $1.6 billion per year. This is more than four times the total taxes from gambling the South Australian government <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/">derived in 2015-16</a> ($380.3 million).</p>
<p>With a cost-benefit ratio like that, some strong measures could well be called for. Xenophon says the proposals encapsulated in his party’s policy are the start. However, Tasmanian Labor has set the new benchmark for pokie regulation – removing them entirely from pubs and clubs.</p>
<p>It is remarkable that a party traditionally in lockstep with – and <a href="https://theconversation.com/gambling-lobby-gives-big-to-political-parties-and-names-names-73131">substantially supported by</a> – the gambling industry has adopted such a position. Perhaps the harms have become too much to ignore?</p>
<p>How these policies might be implemented, amid the resistance they will face from a well-heeled and <a href="http://insidestory.org.au/the-lobby-group-that-got-much-more-bang-for-its-buck/">often-influential</a> gambling industry, presents an intriguing prospect over coming months.</p><img src="https://counter.theconversation.com/content/92038/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens.</span></em></p>Nick Xenophon says the proposals encapsulated in his party’s gambling policy for the South Australian election are just the start of a wider push for reform.Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/911492018-02-20T19:11:02Z2018-02-20T19:11:02ZFactCheck: are ‘around 5,000 jobs’ at risk if pokies are removed from pubs and clubs in Tasmania?<blockquote>
<p>The gaming industry estimates that around 5,000 jobs are at risk if electronic gaming machines are removed from pubs and clubs.</p>
<p><strong>– Excerpt from the Tasmanian Liberals’ <a href="https://www.tas.liberal.org.au/sites/default/files/Future%20of%20%20Gaming%20Tas.pdf">Future of Gaming in Tasmania</a> policy document, February 2018</strong> </p>
</blockquote>
<p>The future of electronic gaming machines – commonly known as poker machines or “pokies” – in Tasmanian pubs and clubs has become a key battleground in the state’s upcoming election.</p>
<p>The incumbent Tasmanian Liberals <a href="https://www.tas.liberal.org.au/sites/default/files/Future%20of%20%20Gaming%20Tas.pdf">have promised</a> to end the monopoly on poker machine licenses <a href="http://www.smh.com.au/federal-politics/political-news/no-risk-the-family-who-owns-tasmanias-gambling-industry-20180202-h0slct.html">currently held by the Federal Group</a>, and put the licenses for non-casino machines to public tender in 2023.</p>
<p>Meanwhile, Tasmania’s opposition Labor Party <a href="http://taslabor.com/poker-machines-pubs-clubs-five-years-majority-labor-government/">has promised</a> to remove poker machines from pubs and clubs by 2023, offering A$50 million to assist venues make the transition. </p>
<p>In a document outlining its policy, the Tasmanian Liberal party cited “gaming industry” estimates that “around 5,000 jobs are at risk if electronic gaming machines are removed from pubs and clubs”.</p>
<p>Are those estimates correct?</p>
<h2>Checking the source</h2>
<p>The Conversation contacted Tasmanian Premier Will Hodgman’s office to request sources and comment to support the claim, but did not receive a response.</p>
<p>Nonetheless, we can test the statement against publicly available data.</p>
<hr>
<h2>Verdict</h2>
<p>The claim promoted by the Tasmanian Liberal Party that “around 5,000 jobs are at risk if electronic gaming machines are removed from pubs and clubs” is an exaggeration – and a significant one. </p>
<p>Finding precise employment figures for the gambling industry is difficult.</p>
<p>But data recently released by the Tasmanian Government Department of Treasury and Finance estimated that in 2017, there were 370 full time equivalent jobs related to poker machines and keno in hotels and clubs in Tasmania. </p>
<p>Even when we consider that the number of people employed would be higher than an estimated 370, because some people work part time, the claim that a change in legislation would place “around 5,000 jobs” at risk is a significant overstatement. </p>
<hr>
<h2>How do we count jobs in the gambling industry?</h2>
<p>Finding employment figures for the gambling industry is difficult, because generally the government doesn’t collect detailed employment data for this sector. </p>
<p>The most reliable source for jobs figures, at this stage, is the <a href="http://www.treasury.tas.gov.au/Documents/Vol%201%20-%20SEIS%202017%20-%2022%20DECEMBER%202017%20-%20FINAL.pdf">Fourth Social and Economic Impact Study of Gambling in Tasmania</a> report, released by the Tasmanian Government Department of Treasury and Finance in December 2017.</p>
<p>This report provides comprehensive employment estimates using information received from stakeholders in the gambling industry, including industry associations, local governments and the Tasmanian Liquor and Gaming Commission. </p>
<p>The authors of this report did note that the full time employment estimates are “based on limited industry employment data and stakeholder insights”, and warned that “caution must be used when quoting these figures”.</p>
<h2>What did the report find?</h2>
<p>That study estimated that in 2017, the <em>total</em> gambling industry in Tasmania employed approximately 1,086 full time equivalent jobs across the state. According to the report, this was approximately 0.5% of total full time equivalent employment in Tasmania.</p>
<p>About one third of those jobs (370) were related to pokie machines and keno in hotels and clubs.</p>
<p>The Australian Bureau of Statistics <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/10F4D9EEA573B5ADCA257D240011D39D?opendocument">defines</a> ‘hotels’ as pubs and similar venues, so we’ll use the terms interchangeably in this FactCheck.</p>
<p>One “full time equivalent” job is equivalent to 38 hours of employment a week, or 1,748 hours a year. So the number of people employed in the gambling industry is likely to be higher than 1,086 – because some people will work part time. </p>
<p>But given that there are 370 full time equivalent jobs in hotels and clubs related to pokies and keno, saying that “around 5,000 jobs” would be at risk if pokies were removed from pubs and clubs is an overstatement – even accounting for the difference between full time equivalent roles and the number of people employed. </p>
<p>Even if we consider the number of 1,086 full time equivalent roles for the <em>entire</em> Tasmanian gambling industry, to say around 5,000 jobs would be at risk is a significant overestimation. </p>
<h2>Redirecting the money spent on pokies</h2>
<p>The Treasury report found that in May 2017, there were 3,596 poker machines in casinos, clubs and hotels in Tasmania, including 36 on board the Spirit of Tasmania ships.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=286&fit=crop&dpr=1 600w, https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=286&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=286&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=359&fit=crop&dpr=1 754w, https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=359&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/207020/original/file-20180219-116368-17z8ave.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=359&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">EGMs = Electronic gaming machines.</span>
<span class="attribution"><a class="source" href="http://www.treasury.tas.gov.au/Documents/Vol%201%20-%20SEIS%202017%20-%2022%20DECEMBER%202017%20-%20FINAL.pdf">Economic Impact Study of Gambling in Tasmania</a></span>
</figcaption>
</figure>
<p>Neither the Tasmanian Liberal or Labor parties are proposing to remove poker machines from casinos. So, excluding casinos, we can see that 89 hotels held licenses for 2,248 poker machines, while seven clubs held licences for 127 poker machines.</p>
<p>According to the report, in the 2015-16 financial year, A$191 million was spent on pokies in Tasmania. That A$191 million figures is for pokies alone, and doesn’t include race wagering, gaming in casinos, keno, lotteries, sports betting and online gambling.</p>
<p>It’s important to keep in mind that even if some jobs were lost in the gambling industry as a result of the change in legislation, other jobs would be created elsewhere in the economy.</p>
<p>This is because at least part of the spending on gambling in hotels and clubs could be expected to be redirected to other activities. As mentioned earlier, in the 2015-16 financial year, A$191 million was spent on pokies in Tasmania. </p>
<p>If pokies were removed from pubs and clubs, some of this spending would likely go to gambling in a casino, or to online gambling. But another part would likely go to other forms of spending, which in turn could generate additional income and jobs in the rest of the economy.</p>
<p>A study <a href="https://www.socialactionresearchcentre.org.au/wp-content/uploads/Removing-poker-machines-from-hotels-and-clubs-in-Tasmania-Economic-Considerations.pdf">published in July 2017</a> by Professor John Mangan at the University of Queensland specifically examined these ‘spillover’ effects for the Tasmanian economy.</p>
<p>Mangan’s analysis suggested that removing pokies from hotels and clubs would be beneficial to the Tasmanian economy, and could increase employment in Tasmania. <strong>– Fabrizio Carmignani</strong></p>
<h2>Blind review</h2>
<p>I agree with the conclusion of this FactCheck. Based on the most authoritative available estimate of gaming-related employment in Tasmanian hotels and clubs, which this FactCheck uses, it is impossible to take seriously the assertion that the removal of poker machines from them in five years’ time could cause the loss of around 5,000 jobs.</p>
<p>That would imply that for every job directly attributable to the presence of pokies in hotels and clubs, more than 13 jobs were created indirectly in Tasmania. And if that were really true, then the installation of poker machines would have to be the most effective form of job creation ever devised, anywhere – which is nonsensical. <strong>– Saul Eslake</strong></p>
<hr>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Conversation FactCheck is accredited by the International Fact-Checking Network.</span>
</figcaption>
</figure>
<p><em>The Conversation’s FactCheck unit is the first fact-checking team in Australia and one of the first worldwide to be accredited by the International Fact-Checking Network, an alliance of fact-checkers hosted at the Poynter Institute in the US. <a href="https://theconversation.com/the-conversations-factcheck-granted-accreditation-by-international-fact-checking-network-at-poynter-74363">Read more here</a>.</em></p>
<p><em>Have you seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at <a href="mailto:checkit@theconversation.edu.au">checkit@theconversation.edu.au</a>. Please include the statement you would like us to check, the date it was made, and a link if possible.</em></p><img src="https://counter.theconversation.com/content/91149/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Fabrizio Carmignani has received funding from the Australian Research Council for a project on the estimation of the multivariate linear continuous model and its applications in macroeconomics.</span></em></p><p class="fine-print"><em><span>Saul Eslake does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Tasmanian Liberal party is promoting gaming industry estimates that ‘around 5,000 jobs’ would be at risk if poker machines were removed from pubs and clubs in Tasmania. Are the estimates correct?Fabrizio Carmignani, Professor, Griffith Business School, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/900192018-01-16T19:13:01Z2018-01-16T19:13:01ZRemoving pokies from Tasmania’s clubs and pubs would help gamblers without hurting the economy<figure><img src="https://images.theconversation.com/files/202014/original/file-20180116-53295-9sst7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Money gambled on pokies is frequently diverted from other, often more productive purposes, such as mortgage repayments, rent or other entertainment.</span> <span class="attribution"><span class="source">AAP/Julian Smith</span></span></figcaption></figure><p>Debate over poker machines is at the centre of the lead-up to this year’s Tasmanian state election. <a href="http://www.abc.net.au/news/2017-12-13/poker-machines-to-be-out-of-pubs-clubs-under-tasmanian-labor/9254442">Labor’s promise</a> to remove pokies from Tasmania’s pubs and clubs by 2023 if it wins government has been met with both praise and fierce criticism from lobby groups.</p>
<p>Announcing the Liberals’ gaming policy recently, <a href="http://www.abc.net.au/news/2018-01-09/tas-liberals-gaming-policy-announced/9314398">Premier Will Hodgman said</a>:</p>
<blockquote>
<p>Unlike Labor, we believe that Tasmanians should be able to choose how to spend their money, not be dictated to by the government.</p>
</blockquote>
<p>Amid claim and counter-claim, what are the facts on pokies in Tasmania? And what do we know about the impact of Labor’s policy of removing the machines from pubs and clubs?</p>
<h2>Ownership and location of pokies in Tasmanian pubs and clubs</h2>
<p>Tasmanian pubs and clubs <a href="http://www.treasury.tas.gov.au/liquor-and-gaming/legislation-and-data/gambling-industry-data/gaming-and-wagering-industry-data">house 2,365 pokies</a>. In 2016-17, those who used them lost A$110 million.</p>
<p>Like most jurisdictions that have pokies in clubs and pubs, Tasmania’s are concentrated in areas of social stress. In fact, disadvantage predicts the extent of pokie losses <a href="https://theconversation.com/tasmanias-pokie-problem-stress-and-disadvantage-exploited-more-than-anywhere-else-in-australia-73525">far more in Tasmania</a> than in other Australian states and territories.</p>
<hr>
<p><em><strong>Further reading: <a href="https://theconversation.com/tasmanias-pokie-problem-stress-and-disadvantage-exploited-more-than-anywhere-else-in-australia-73525">Tasmania’s pokie problem: stress and disadvantage exploited more than anywhere else in Australia</a></strong></em></p>
<hr>
<p>This may be largely attributable to the ownership arrangements in Tasmania, where one company – the Federal Group, <a href="https://theconversation.com/how-one-family-used-pokies-and-politics-to-extract-a-fortune-from-tasmanians-73193">owned by the Farrell family</a> – holds the licence for all pokies in pubs and clubs, and the state’s two casinos. Ownership of the licences means Federal has excellent data, and can decide where to locate pokies to maximise profit.</p>
<p>Federal also entirely <a href="http://www.treasury.tas.gov.au/liquor-and-gaming/legislation-and-data/gambling-industry-data">owns and operates 12 pubs</a> through its subsidiary, Vantage Hotel Group. Each venue operates 30 pokies. Australia Leisure and Hospitality Group, a subsidiary of Woolworths, operates another five venues, each also with 30 pokies.</p>
<p>Six of these 17 venues are in Glenorchy, a hotspot for pokie gambling. Pokies in Glenorchy make 1.6 times the state average – $74,589 per machine, compared to $46,486 across pubs and clubs in Tasmania. No other local government area even comes close to that figure. These losses translate to $560 per adult per year, compared to a Tasmanian average of $272.</p>
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<p>Glenorchy and some other local government areas have previously been <a href="http://www.treasury.tas.gov.au/Documents/20150109SEISVolume2FINALREVISEDCHANGES.PDF">described as “low income”</a>, and are reported as having a problem gambling rate of 1.1%, compared to the state average of 0.6%. It’s little wonder, then, that the rate of losses is also more than twice the state average.</p>
<hr>
<p><em><strong>Further reading: <a href="https://theconversation.com/how-one-family-used-pokies-and-politics-to-extract-a-fortune-from-tasmanians-73193">How one family used pokies and politics to extract a fortune from Tasmanians</a></strong></em></p>
<hr>
<p>It’s no accident that pokies in Tasmania are located in areas of significant social and economic stress. People who get hooked on them are likely to be seeking relief from life’s stresses – whether that’s caused by poverty, social exclusion, or difficult personal circumstances.</p>
<h2>How widespread is harm from gambling in Tasmania?</h2>
<p>The most recent published <a href="http://www.treasury.tas.gov.au/Documents/Vol%202%20-%20SEIS%202017%20-%2022%20DECEMBER%202017%20-%20FINAL.pdf">survey of gambling activity</a> in Tasmania reports that 0.6% of the state’s adult population can be classified as “problem gamblers”. Another 1.4% were classed as “moderate-risk” gamblers, the next-lowest category. </p>
<p>All these people not only experience some degree of harm from gambling, but their gambling also affects others. Moderate-risk gamblers on average affect <a href="http://www.tandfonline.com/doi/full/10.1080/14459795.2017.1331252">three other people</a>, while the gambling of those in the more severe category affects six others.</p>
<p>We can use these data to develop some sense of how widespread the harm from gambling is in Tasmania.</p>
<p>Tasmania’s adult population is <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/3235.0Main%20Features402014?opendocument&tabname=Summary&prodno=3235.0&issue=2014&num=&view=">estimated to be</a> around 405,000. Applying data from the gambling survey, Tasmania has around 2,430 problem gamblers, each of whom affects another six people (children, spouses, employers, friends and neighbours). That’s around 14,580 other people. </p>
<p>There’s 5,670 moderate-risk gamblers, each affecting three other people: roughly another 17,010 people. Low-risk gamblers comprise 4.8% of the adult population – around 19,440 people – and each of these will affect one other. And the <a href="https://www.responsiblegambling.vic.gov.au/__data/assets/pdf_file/0007/28465/Browne_assessing_gambling-related_harm_in_Vic_Apr_2016-REPLACEMENT2.pdf">harms of gambling</a> are <a href="https://aifs.gov.au/agrc/publications/impact-gambling-problems-families/what-are-impacts-gambling-problems-families">significant</a>.</p>
<p>All up, those harmed by gambling in Tasmania at any one time amounts to more than 78,000 people, or more than 15% of the state’s total population. This is almost certainly both an underestimate, and overwhelmingly attributable to pokies – given the vast majority of problem gamblers use pokies, almost entirely in pubs and clubs.</p>
<h2>The potential impacts of Labor’s policy</h2>
<p>The Tasmanian government received about <a href="http://www.treasury.tas.gov.au/liquor-and-gaming/legislation-and-data/gambling-industry-data/gaming-and-wagering-industry-data">$31.2 million in 2016-17</a> from pokies in pubs and clubs. That amounts to 3% of Tasmanian <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5506.02014-15?OpenDocument">state tax revenue</a>. </p>
<p>However, if pokies were removed from pubs and clubs, the money spent on gambling would not disappear. And it’s likely that revenue would flow to Treasury from other expenditures. </p>
<p>Gambling doesn’t create money from nothing. In fact, money gambled on pokies is frequently diverted from other, often more productive purposes, such as mortgage repayments, rent or other entertainment. Many of these other uses provide at least the same level of economic benefit, while not being associated with harm.</p>
<p>Gambling expenditure of $1 million <a href="http://www.treasury.tas.gov.au/Documents/Soc-Economic-Impact-Study-Vol1.pdf">creates about 3.2 jobs</a>. The same expenditure on sales of liquor and other beverages equates to 8.3 jobs. And spending $1 million on sales of food and meals generates 20 jobs.</p>
<p>Most of the changes that would result from Labor’s policy would be felt by the minority of pubs whose business model has been built around the steady stream of pokie revenue. This includes some large corporations mentioned earlier. </p>
<p>Of the 343 “general” (or pub) licences, 89 (25.9%) have pokies. Of the 197 licensed clubs, a very modest seven (3.6%) operate pokies. The operators of these establishments would have until 2023 to reorganise their affairs, and would be assisted by a <a href="http://taslabor.com/phasing-out-poker-machines/">government package</a> to do so.</p>
<p>Pokies are highly addictive <a href="https://aifs.gov.au/agrc/publications/how-electronic-gambling-machines-work">for many reasons</a>, but importantly because they’re high impact, almost continuous, and everywhere. If social space is saturated with pokies, they’ll be used. If used, they are likely to addict a significant proportion of those who use them.</p>
<p>Some of those currently hooked on pokies may move to other forms of gambling if pokies are not available, such as those available via the internet. However, when slot machines were similarly phased out in Norway, <a href="http://onlinelibrary.wiley.com/wol1/doi/10.1111/add.13172/abstract">the result was</a> a decline in gambling expenditure, and in harmful gambling. There was no evidence of other gambling forms substituting for expenditure on slot machines. </p>
<p>Without exposure to the highly intense form of gambling that pokies provide, the strong likelihood is a substantial reduction in harm across a variety of areas. It is also likely to lead to growth in other types of economic activity that don’t create these problems.</p><img src="https://counter.theconversation.com/content/90019/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens.</span></em></p>Disadvantage predicts the extent of poker machine losses far more in Tasmania than in other Australian states and territories.Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/838712017-09-12T06:13:54Z2017-09-12T06:13:54ZCan a federal court case against pokies succeed where politics has failed?<p>Maurice Blackburn <a href="https://www.mauriceblackburn.com.au/about/media-centre/media-statements/2017/landmark-trial-against-pokies-industry-set-to-begin/">today launched</a> a federal court case against poker machine manufacturer Aristocrat Technologies Australia and casino owner Crown Melbourne Limited. The case could decide whether the design and operation of poker machines can deliberately deceive players about their chances of winning. </p>
<p>If this case is successful then it will have ramifications for the entire industry. While the plaintiff, Ms Guy, is not seeking damages and is targeting only one casino and one poker machine manufacturer, a precedent could be set for every poker machine in the country.</p>
<p>The gambling industry is a <a href="https://theconversation.com/gambling-lobby-gives-big-to-political-parties-and-names-names-73131">major contributor</a> to Australian political parties and has thus far defeated efforts to reform poker machines. It makes a lot of sense for those in favour of gambling reform to turn to the legal system.</p>
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<a href="https://theconversation.com/three-charts-on-australias-addiction-to-poker-machines-78353">Three charts on: Australia's addiction to poker machines</a>
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<p>Australians <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/">lost A$11.59 billion</a> gambling in 2014-2015 alone. This averages out to A$633 per adult. However, the true figures are far more concerning. Only 8% of Australian adults typically use pokies regularly, meaning these regular users lose between <a href="https://theconversation.com/three-charts-on-australias-addiction-to-poker-machines-78353">A$1,500 and A$3,500 each year</a>. </p>
<p>One of the reasons that we seem to be willing as a nation to tolerate such losses – and the <a href="https://theconversation.com/pokies-sport-and-racing-harm-41-of-monthly-gamblers-survey-81486">resulting social harms</a> – is due to the idea that gambling is a free choice.</p>
<p>Our laws are largely based on this idea of informed and rational consumers who make free choices in a marketplace. But this case is being brought under <a href="http://posh.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/caca2010265/sch2.html">Australian Consumer Law</a>, which recognises that consumers are not always rational. </p>
<h2>The key arguments</h2>
<p>While you may assume that the odds are always against people who play poker machines, Maurice Blackburn is alleging that certain aspects of the design of the “Dolphin Treasure” poker machine mislead consumers as to the true nature of these odds. These include:</p>
<p>• <em>The oversized reel</em> – Maurice Blackburn alleges that when playing Dolphin Treasure all five reels on the screen appear to be the same size. However, one of the reels is actually significantly bigger than the other four, making it far less likely that it will return a high-value symbol. </p>
<p>• <em>The starving of the reels</em> – Similarly, Maurice Blackburn says the symbols are not distributed evenly across the five wheels in Dolphin Treasure. Maurice Blackburn has likened this to “playing a game of cards without knowing the deck has four aces of spades, three queen of hearts and seven tens of diamonds”. The uneven distribution of symbols makes lining them up (and therefore winning) far less likely than you would naturally assume.</p>
<p>• <em>Onscreen information</em> – Maurice Blackburn also alleges that the Dolphin Treasure machine gives players misleading information about the likely returns from playing the machine. The lawyers say the machine tells players that the returns start at 87%, but that this figure bears no relation to how much an individual might lose per spin or session. Instead, this is a theoretical statement based on the expected return over millions of spins.</p>
<p>• <em>Losses disguised as wins</em> – Finally, Maurice Blackburn is arguing that by displaying lights and sounds for a partial return on a spin, the machines mislead players into feeling as though they are winning when they have, in fact, lost money.</p>
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Read more:
<a href="https://theconversation.com/losses-disguised-as-wins-the-science-behind-casino-profits-31939">Losses disguised as wins, the science behind casino profits</a>
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<h2>Why sue under the consumer law?</h2>
<p>The Australian Consumer Law provides a strong legal foundation for this case. Unlike traditional contract law, consumer law recognises that many consumers do not behave rationally, that we often make choices based on first impressions and poor information, and that businesses exploit this fact. </p>
<p>Previous cases give some idea of how the courts have applied this logic.</p>
<p>In <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2013/54.html?stem=0&synonyms=0&query=title%28%222013%20HCA%2054%22%29">one case</a> the High Court found that an ordinary and reasonable person gives only “perfunctory” attention to advertising material and, therefore, many will only absorb the “general thrust”.</p>
<p>Similarly, <a href="https://jade.io/article/509235">a recent case</a> about Nurofen “Special Pain” products focused on the impact of first impressions. While the ingredients are plainly listed on the packaging, and a consumer could have compared boxes of “back pain” and “tension headache” medication and discovered they were identical, the Federal Court found that most consumers would simply rely on the name of the product and its (unfounded) claim to target specific pain. </p>
<p>In the Nurofen case the Federal Court imposed a penalty of A$6 million and a further compensation payout of $3.5 in a <a href="http://nurofenclassaction.com.au/">class action</a> earlier this year. This indicates that consumers are entitled to rely on these first impressions and businesses do not have free rein to exploit this.</p>
<p>This is why section 18 of the Australian Consumer Law provides protection against misleading and deceptive conduct – even where consumers could have discovered the truth had they dug a little deeper. It also provides protection against unconscionable conduct, which in this case relates to the plaintiff’s claim that the poker machines are designed to be addictive.</p>
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Read more:
<a href="https://theconversation.com/poker-machines-and-the-law-when-is-a-win-not-a-win-49580">Poker machines and the law: when is a win not a win?</a>
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<h2>What are the implications?</h2>
<p>While Ms Gay is not seeking damages, if her case is successful it will open the way for the ACCC to take action against the entire poker machine industry. The potential penalties from this could be significant. </p>
<p>Penalties and damages awarded in consumer law cases have traditionally been far lower than those awarded in competition law cases. However, this has changed over the last 12 months, spearheaded by the A$6 million penalty in the Nurofen case. </p>
<p>In this case, the court emphasised the importance of imposing penalties that are high enough to ensure “other ‘would-be wrongdoers’ think twice and decide not to act against the strong public interest”. The ACCC has since made it clear it intends to <a href="https://www.accc.gov.au/speech/advocacy-for-the-consumer">take up this call</a> and to ensure penalties are seen as more than just a cost of doing business. </p>
<p>In this new environment, a successful case against the poker machine industry would be one to watch.</p><img src="https://counter.theconversation.com/content/83871/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cristy Clark is a member of the NSW Greens.</span></em></p>A court case against a poker machine manufacturer and casino operator could set a precedent for every poker machine in Australia.Cristy Clark, Lecturer in Law, Southern Cross UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/783532017-06-26T20:09:37Z2017-06-26T20:09:37ZThree charts on: Australia’s addiction to poker machines<figure><img src="https://images.theconversation.com/files/174657/original/file-20170620-24885-ggjhtd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Pokie losses in Australia's pubs and clubs increased fourfold between 1990 and 2000.</span> <span class="attribution"><span class="source">AAP/Paul Jeffers</span></span></figcaption></figure><p>Australia has <a href="http://gamingta.com/australia-has-2-4-of-the-worlds-gaming-machines/">more poker machines per person</a> than any country in the world, excluding casino-tourism destinations like Macau and Monaco. It has nearly 200,000 machines – one for every 114 people.</p>
<p>This startling statistic resulted from a wave of pokie liberalisation during the 1990s that saw them introduced into pubs and clubs in every state and territory – except Western Australia.</p>
<p>To track the social impacts of this expansion, state and territory governments have commissioned surveys to measure the levels of gambling consumption and gambling-related harm. In total, more than 275,000 Australians have been interviewed in 42 studies of this kind since 1994. </p>
<p>We recently conducted <a href="https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-017-4413-6">an analysis</a> of these studies to build a nationwide picture of how pokie gambling has changed across Australia over the past 25 years. We linked the participation rates reported by the surveys with government data on <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/">actual poker machine expenditure in pubs and clubs</a> for each jurisdiction – converted into 2015 dollars to account for inflation. </p>
<p>The expenditure data exclude poker machines in casinos; these data are not disaggregated for government reporting purposes.</p>
<p>Consequently, the figures we present here should be considered minimums – especially in Tasmania and the Northern Territory, where a large proportion of pokies are located in casinos. WA is excluded from the expenditure analysis because it has no pokies outside Burswood Casino.</p>
<h2>A recent gradual decline in pokie losses</h2>
<p>Nationally, pokie losses in pubs and clubs increased fourfold between 1990 and 2000 before plateauing at around A$860 per adult per year in 2005. Since 2005, there has been a consistent gradual decline in gambling losses across the various jurisdictions. Throughout this period, pokie losses per adult in New South Wales have remained around 50% higher than the national average. </p>
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<p>The biggest contributor to the decline since 2005 has been tobacco control, not gambling policy. The introduction of indoor smoking bans across Australia in the 2000s <a href="http://doi.org/10.1136/jech.2006.051557">hit pokie revenues</a> quite hard. </p>
<p>It is also likely that caps on pokie numbers – which have been relatively stable since 2000 – <a href="http://doi.org/10.4309/jgi.2013.28.2">played a role</a> in limiting pokie expenditure.</p>
<p>However, this should give no reason for complacency. The decline in pokie revenue is slowing, and possibly beginning to reverse in NSW, the NT and Queensland.</p>
<p>Current annual losses on pokies in pubs and clubs for Australia amount to $633 per adult. Losses in NSW are highest at $978 per adult and lowest in Tasmania at $283 per adult – although casinos play a more important role in Tasmania. </p>
<p>These figures are <a href="http://www.economist.com/blogs/graphicdetail/2017/02/daily-chart-4">very high by world standards</a>. The losses by Australians on pokies outside of casinos dwarf those of any other comparable country. They are 2.4 times greater than those of our nearest rival, Italy.</p>
<p>These losses are even more anomalous when compared to non-casino gambling machines in other English-speaking countries. Australians lose three times more than New Zealanders, 4.1 times more than Canadians, 6.4 times more than the Irish, 7.5 times more than the British, and 9.8 times more than Americans.</p>
<h2>Falling numbers of pokie gamblers</h2>
<p>The modest decline in losses since the mid-2000s has been driven by a falling number of people playing the pokies. </p>
<p>The chart below shows the proportion of the adult population in each Australian state or territory that gambles on pokies at least once per year. These proportions are derived from the surveys described above. Each survey estimate is represented by a single dot.</p>
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<img alt="" src="https://images.theconversation.com/files/175149/original/file-20170622-3049-1nu8fwx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/175149/original/file-20170622-3049-1nu8fwx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=606&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175149/original/file-20170622-3049-1nu8fwx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=606&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175149/original/file-20170622-3049-1nu8fwx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=606&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175149/original/file-20170622-3049-1nu8fwx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=761&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175149/original/file-20170622-3049-1nu8fwx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=761&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175149/original/file-20170622-3049-1nu8fwx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=761&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><span class="source">Author provided/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
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<p>Participation rates peaked shortly after pokies were introduced in the late 1990s at around 40% for the larger states. Since that time, participation has consistently dropped to below 30% across Australia and has fallen to less than 20% in Tasmania, Victoria and the ACT.</p>
<h2>Amounts lost per gambler have remained constant</h2>
<p>Dividing the pokie losses in clubs and pubs for each jurisdiction by the number of actual gamblers reveals the average amount lost per pokie gambler per year as shown by the chart below. Some lines on this chart are shorter than others because the survey-based participation data is not uniformly available.</p>
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<img alt="" src="https://images.theconversation.com/files/174874/original/file-20170621-30211-1i5o31p.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174874/original/file-20170621-30211-1i5o31p.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=618&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174874/original/file-20170621-30211-1i5o31p.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=618&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174874/original/file-20170621-30211-1i5o31p.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=618&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174874/original/file-20170621-30211-1i5o31p.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=777&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174874/original/file-20170621-30211-1i5o31p.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=777&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174874/original/file-20170621-30211-1i5o31p.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=777&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><span class="source">Author provided/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
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<p>The reduction in total pokie losses since 2005 has not been matched by a corresponding decline in losses per individual gambler. After a reduction due to the smoking bans, losses per gambler appear to have plateaued – with some jurisdictions trending up (ACT and NT) and others down (NSW and SA). </p>
<p>This suggests that while fewer people are playing the pokies, the amount of money lost per gambler has remained relatively constant. And this amount appears very high. </p>
<p>The amount lost per pokie gambler (just in pubs and clubs) in both NSW and Victoria is around $3,500 per year, or around $65 per week. The ACT sits at around $3,000 per gambler per year, followed by the NT and Tasmania at around $1,500 per year.</p>
<p>To put this in some perspective, the average Australian adult <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5204.02014-15?OpenDocument">spent $1,245</a> on electricity and gas in 2014-15. </p>
<p>And while we now have concerted government action to <a href="https://theconversation.com/the-finkel-review-finally-a-sensible-and-solid-footing-for-the-electricity-sector-79118">reduce energy costs</a>, the regulatory reforms required to reduce the amount of losses for pokie gamblers are not on the legislative agenda in most of Australia.</p><img src="https://counter.theconversation.com/content/78353/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Martin Young has previously received research funding from the Australian Research Council, Gambling Research Australia, and several state government departments. His research is currently funded by the Community Benefit Fund of the Northern Territory Government. In addition to his SCU position, he a Visiting Fellow, Fenner School of Environment and Society, ANU.</span></em></p><p class="fine-print"><em><span>Francis Markham has received funding from or been employed on projects that received funding from the Australian Research Council, the Community Benefit Fund of the Northern Territory and the ACT Gambling and Racing Commission. He has had his travel expenses to speak at an international conference paid for by the Alberta Gambling Research Institute, an organisation that is funded by the provincial government of Alberta. He is a member of the Public Health Association of Australia.
</span></em></p>While fewer people are gambling on the pokies, the amount of money lost per gambler has remained relatively constant over time.Martin Young, Associate Professor, School of Business and Tourism, Southern Cross UniversityFrancis Markham, Research Fellow, College of Arts and Social Sciences, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/731932017-04-04T19:28:33Z2017-04-04T19:28:33ZHow one family used pokies and politics to extract a fortune from Tasmanians<figure><img src="https://images.theconversation.com/files/161926/original/image-20170322-24884-70mcnh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A new book tells a detailed story of how policy decisions about pokies are actually made.</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p><a href="https://theconversation.com/profiles/james-boyce-131719">James Boyce’s</a> new book <a href="https://www.blackincbooks.com.au/books/losing-streak">Losing Streak</a> charts the story of how Federal Hotels gained an exclusive licence to operate all of Tasmania’s 3,500 poker machines for free. The company’s owners, the Farrell family, <a href="http://www.afr.com/leadership/brw-lists/rich-families/brw-rich-families-2015-20160303-gn9flu">amassed a fortune of A$463 million</a> in the process.</p>
<p>The book provides a detailed account of the cosy and conflicted relationships between a gambling corporation and decision-makers that has gifted a public licence worth around $30 million per year to Federal for 30 years. Boyce tells a detailed story of how policy decisions about pokies are actually made. </p>
<p>In Tasmania’s case, a changing cast of actors has colluded to grant extreme riches to a single family, extracted in large part from <a href="https://theconversation.com/tasmanias-pokie-problem-stress-and-disadvantage-exploited-more-than-anywhere-else-in-australia-73525">the state’s most disadvantaged citizens</a>. The book’s publication is beautifully timed, poised to enliven the debate surrounding the current <a href="http://www.parliament.tas.gov.au/ctee/Joint/FutureGamingMarkets.htm">parliamentary inquiry</a> that threatens to <a href="http://www.parliament.tas.gov.au/ctee/Joint/TermsofReference/FGM%20additional%20ToR_a.pdf">end Federal’s monopoly</a> after 2023. </p>
<p>The author is by no means a neutral observer of these events. Boyce has been an advocate for pokie reform in Tasmania for close to two decades. However, he is also an acclaimed historian – and his meticulous referencing to sources in the Tasmanian Archive and Heritage Office and the Tasmanian Parliamentary Library ensures his claims are open to verification.</p>
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<h2>Casinos and allegations of corruption</h2>
<p>Boyce’s primary task is to narrate the history of pokie legalisation in Tasmania, and explain how Federal gained its extraordinary monopoly on their ownership. He begins his account in 1967 with the proposal for Australia’s first casino, at Wrest Point in Hobart. </p>
<p>The process was marked by secret negotiations, overblown claims of public benefit from economic development, and an ultimately broken pledge that the casino would not contain pokies. Today, Wrest Point is little more than a hotel attached to a run-down “pokies barn”. It makes 86% of its gambling revenue <a href="https://www.treasury.tas.gov.au/domino/dtf/dtf.nsf/LookupFiles/TLGCAnnualReport2015-16.pdf/$file/TLGCAnnualReport2015-16.pdf">from high-intensity pokies</a>. </p>
<p>To observers today, this story <a href="https://theconversation.com/packers-barangaroo-casino-and-the-inevitability-of-pokies-15892">will sound familiar</a>.</p>
<p>Most startling, Boyce describes – in a chapter titled “Was the deputy premier bribed?” – the little-known allegations of corruption that surrounded the licensing of a second casino in Launceston. These allegations surrounded the deputy premier, Kevin Lyons, who held the balance of power in a Liberal minority government, abruptly and unexpectedly quitting the Coalition in 1972. His departure brought down a government that was poised to introduce competition into the casino market. </p>
<p>Boyce makes the convincing argument that Lyons appeared to have been bribed by Federal Hotels, a Hobart-based bookmaker, and British Tobacco. Federal’s motive is suggested to be the protection of its casino monopoly. </p>
<p>Boyce documents a payment to Lyons of the equivalent of $250,000 in today’s dollars as an advance for his memoirs – a manuscript that was never written. Lyons was also gifted a “loan” worth $10,500 today from Federal, which also took out a lucrative contract with the business he established upon his retirement from politics. </p>
<p>Lyons, it seems, had planned his departure several months in advance, taking advice from a shadow cabinet member.</p>
<p>Boyce documents a subsequent police investigation that he argues was deeply flawed, and not released at the time to public or parliamentary scrutiny.</p>
<p>Federal ultimately won the Launceston casino licence.</p>
<h2>Monopoly licence</h2>
<p>A subsequent string of bizarre government decisions – which have been hugely profitable for Federal – have had a much greater negative impact on Tasmanians than the two casinos. Most crucial of these was the 1993 decision to allow pokies into hotels and clubs. While Tasmania was hardly alone in introducing pokies at this time, the nature of the licence was extraordinary.</p>
<p>The model proposed by the government was to allow a single monopoly operator to own all of Tasmania’s pokies. The idea was that various parties would regularly tender for this privilege. This market-based mechanism was designed to stop operators from being able to reap excessive profits. </p>
<p>Federal was vehemently opposed to any competition. It prepared a well-funded campaign against the proposal.</p>
<p>Amid political deadlock, the Groom government suddenly changed its plan. A rapidly negotiated agreement gave Federal an exclusive licence to own every poker machine in Tasmania. </p>
<p>Instead of this licence going to tender it was given to Federal for free – a gift worth around $30 million per year. As a bonus, the tax rate was lowered, and pokies were also allowed in Federal’s two casinos. </p>
<p>The Groom government’s motivations have never been adequately explained. For Boyce:</p>
<blockquote>
<p>The only conceivable reason for the dramatic policy shift was to win over Federal Hotels … [whose] power was such that only with the company’s support would the legislation to allow poker machines in pubs and clubs pass through parliament.</p>
</blockquote>
<p>In 2002, the licence was extended to 2023 – with no public debate and few concessions to the public interest.</p>
<h2>Consequences</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=928&fit=crop&dpr=1 600w, https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=928&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=928&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1166&fit=crop&dpr=1 754w, https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1166&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/161930/original/image-20170322-5397-xjuvay.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1166&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Black Inc</span></span>
</figcaption>
</figure>
<p>Since the introduction of pokies in 1997, Federal has effectively acted as a private taxman in Tasmania. Its monopoly has made the Farrell family fabulously wealthy. Their fortune was gained not by innovation or business acumen, but by gaining control of a lucrative government licence on extraordinarily favourable terms.</p>
<p>With the introduction of poker machines, Federal’s annual profits went from $600,000 in 1993 to $29 million in 2003. Little of the revenue goes to pubs or clubs or finds its way into government coffers. </p>
<p>Even after tax, Boyce calculates, Federal retains 68 cents of every dollar lost on poker machines. Nor have pokies been good for the Tasmania economy at large: employment in the pubs and clubs sector has fallen 14% since the introduction of pokies.</p>
<h2>Industry tactics</h2>
<p>According to Boyce, Federal would wait for “trigger points” before initiating secret negotiations with the government on key issues like licence renewals. Such trigger points occurred when the government needed something from Federal, and at a time of low political risk, many years out from an election – so the possibility of democratic deliberation could be limited. </p>
<p>All negotiations would occur behind closed doors. The results were presented as fait accompli signed contracts – even when these deals required legislative approval.</p>
<p>But why would so many governments from across the political spectrum and over 40 years be complicit in this? Boyce, in agreement with <a href="http://doi.org/10.1017/CBO9781316118689">much of the academic literature</a>, cites the ability of Federal to create conflicts of interest among key stakeholders, from politicians to industry bodies to civil society actors. </p>
<p>Influence is mostly wielded by small political donations and in-kind support to politicians and civil society actors. Key to this is face-to-face, first-name-terms relationships with politicians in which informal obligations can be exchanged and private understandings reached. </p>
<h2>An exceptional case?</h2>
<p>These tactics are business as usual for the gambling industries. Although Boyce’s book focuses on Tasmania, the case is unexceptional. </p>
<ul>
<li><p>Federal’s actions to secure a monopoly over a revenue stream is mirrored by pokie proprietors <a href="https://theconversation.com/who-wins-from-big-gambling-in-australia-22930">throughout Australia</a>. </p></li>
<li><p>An <a href="https://theconversation.com/gambling-industry-finds-plenty-of-political-guns-for-hire-to-defend-the-status-quo-70124">array of former politicians</a> deliver the gambling industries the face-to-face access they require to gain and retain favourable licence conditions and delay public health reforms. </p></li>
<li><p>The Australian gambling industry’s relatively modest political donations – <a href="https://theconversation.com/gambling-lobby-gives-big-to-political-parties-and-names-names-73131">$1.3 million in 2015-16</a>, or just 0.006% of total gambling revenue – appear to go hand-in-hand with successive governments’ creation of favourable business conditions for proprietors.</p></li>
</ul>
<p>It is now abundantly clear that the super-profits generated by pokies and other <a href="http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2012.301151">“addiction industries”</a> have the potential to stymie policymaking in the public interest in liberal democracies. The repetition of these outcomes across jurisdictions and over time make it clear this is a systemic problem, and not just a case of a few individuals behaving badly. </p>
<p>Pokie licences have consistently transferred wealth from the worst-off of Australia’s citizens to a small cohort of wealthy individuals. The great value of Boyce’s work is in his meticulous chronicling of the interactions between Tasmanian political and business elites in all their tragic and tawdry detail.</p><img src="https://counter.theconversation.com/content/73193/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Francis Markham has received funding from or been employed on projects that received funding from the Australian Research Council, the Community Benefit Fund of the Northern Territory and the ACT Gambling and Racing Commission. He is a member of the Public Health Association of Australia.
</span></em></p><p class="fine-print"><em><span>Martin Young has previously received research funding from the Australian Research Council, Gambling Research Australia, and several state government departments. His research is currently funded by the Community Benefit Fund of the Northern Territory Government. In addition to his SCU position, he a Visiting Fellow, Fenner School of Environment and Society, ANU.</span></em></p><p class="fine-print"><em><span>Barbara Kinder does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In Tasmania, a changing cast of actors has colluded to grant extreme riches to a single family, extracted in large part from the state’s most disadvantaged citizens.Francis Markham, PhD Candidate, The Fenner School of Environment and Society, Australian National UniversityBarbara Kinder, PhD Student, School of Business and Tourism, Southern Cross UniversityMartin Young, Associate Professor, School of Business and Tourism, Southern Cross UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/735252017-02-28T19:10:46Z2017-02-28T19:10:46ZTasmania’s pokie problem: stress and disadvantage exploited more than anywhere else in Australia<figure><img src="https://images.theconversation.com/files/158484/original/image-20170227-27375-1u9qn0o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">If you live near a pokie venue, you are more likely to gamble and suffer harm.</span> <span class="attribution"><span class="source">from shutterstock.com</span></span></figcaption></figure><p>The Tasmanian parliament is in the middle of an inquiry into the way poker machines will be regulated and licensed after 2023. The inquiry’s <a href="http://www.parliament.tas.gov.au/ctee/Joint/TermsofReference/FGM%20ToR%20Gaming%20Inquiry%202016.pdf">terms of reference</a> include:</p>
<blockquote>
<p>Consideration of community attitudes and aspirations of the gambling industry in Tasmania, with particular focus on location, number and type of poker machines in the state.</p>
</blockquote>
<p>Pokies in local Tasmanian pubs and clubs made <a href="https://www.treasury.tas.gov.au/domino/dtf/dtf.nsf/714a9215f1fdf2dfca25798f00012c71/ae88b7f00e2c38b1ca257d820017725c?OpenDocument">over A$113 million</a> in 2015-16. That’s an average of more than A$280 per adult. Not a huge amount, you might think. The problem is, the pokies aren’t evenly distributed. As we know from <a href="http://www.tandfonline.com/doi/full/10.3109/16066359.2012.727507">other research</a>, pokies are concentrated in areas of social and economic stress. </p>
<p>If you live near a pokie venue, you are more <a href="https://theconversation.com/too-close-to-home-people-who-live-near-pokie-venues-at-risk-20771">likely to gamble, and suffer harm</a>. The more profitable the gambling venue, the more likely it is to be associated with <a href="https://theconversation.com/too-close-to-home-people-who-live-near-pokie-venues-at-risk-20771">higher levels of harm</a>. This includes <a href="https://theconversation.com/areas-with-more-poker-machines-have-higher-rates-of-domestic-violence-66982">escalated rates of family violence</a>. </p>
<p>Any inquiry into poker machine regulations should arguably have some knowledge of where the venues and machines are located. It should also question whether this distribution is likely to maximise or minimise rates of harm. </p>
<p>We have been examining the distribution of pokies in Tasmania. What our research reveals is quite alarming. Australian jurisdictions generally have more pokies in socio-economically stressed neighbourhoods. But Tasmania’s pokie distribution takes this to a new level.</p>
<h2>Our modelling</h2>
<p>The Tasmanian Liquor and Gambling Commission publishes some <a href="https://www.treasury.tas.gov.au/domino/dtf/dtf.nsf/v-liq-and-gaming/16CC296F188AEE2CCA257D8E001F13F9">data</a> on the state’s pokie revenue and numbers. This has allowed us to identify the pattern of distribution at the local government level. </p>
<p>Unlike <a href="http://www.vcglr.vic.gov.au/resources/data-and-research/gambling-data/gaming-expenditure-venue">Victoria</a>, the Tasmanian data do not provide details of expenditure (that is, player losses) at the venue level. Nonetheless, we have been able to undertake some relevant preliminary research.</p>
<p>Using the Australian Bureau of Statistics census-derived <a href="http://www.abs.gov.au/websitedbs/censushome.nsf/home/seifa">SEIFA</a> index of relative socio-economic disadvantage, we plotted the relationship between socio-economic stress and pokie data. That is, the number of machines per 1,000 adults, and the average pokie losses per adult in each local government area where data were available. This included the combined municipalities. </p>
<p>The more disadvantaged a local government area is, the more likely it is to have many pokies. </p>
<p>The below graph shows this trend, which is strongly significant in a statistical sense.</p>
<iframe src="https://datawrapper.dwcdn.net/WQdHN/4/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="472"></iframe>
<p>The same is true for the relationship between the SEIFA index and the amount of money lost per adult on average, only more so. Here, disadvantage predicts higher expenditure. </p>
<iframe src="https://datawrapper.dwcdn.net/bMTdQ/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="472"></iframe>
<p>In Tasmania, poker machines are operated by a monopoly, the <a href="http://www.federalgroup.com.au/">Federal Group</a>. According to their website, Federal is a “privately owned family company” belonging to the Farrell family. They operate both Tasmania’s casinos: Wrest Point in Hobart, and the Country Club near Launceston. </p>
<p>They either own and operate, or own and license, the operation of all poker machines in clubs and pubs. These arrangements are unique in Australia, and very uncommon anywhere else.</p>
<p>Our modelling shows that in Tasmania, the monopoly system has allowed operators to cherry-pick the market. This was also true in <a href="http://www.tandfonline.com/doi/abs/10.1080/14459800108732287">Victoria in the days of the pokie duopoly</a>. Until 2012, Tattersalls and TabCorp between them ran the state’s pub and club pokies. </p>
<p>The oligopoly allowed them to locate pokies in areas where they made the most money. These tended to be where people were under socio-economic stress. The Tasmanian monopoly permits the same degree of control, and it appears to have been used to maximise revenue.</p>
<hr>
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<hr>
<h2>Pokies in Tasmania</h2>
<p>The gambling industry inquiry has the potential to upset a few apple carts. It is conducted by a <a href="http://www.parliament.tas.gov.au/ctee/Joint/FutureGamingMarkets.htm">Parliamentary Joint Select Committee</a> of six members. Three are upper house independents. From the lower house there’s one each from the governing Liberal Party, Labor, and the Greens.</p>
<p>There have been 148 submissions to the committee, mostly from individuals. However, gambling industry heavy-hitters, including Australian Leisure and Hospitality (Woolworths joint-venture pokie arm) and Clubs Australia, have made submissions.</p>
<p>This inquiry is garnering considerable interest in Tasmania. Groups such as <a href="https://www.facebook.com/Rein-In-The-Pokies-191187691233681/">Rein in the Pokies</a> and <a href="https://sarc.good.do/getthepokiesoutoftasmaniaspubsandclubs/pages/who-we-are/">Community Voice on Pokies Reform</a> want pokies out of local pub and club venues.</p>
<p>Greg Farrell, managing director of Federal, told the inquiry in early February he believes <a href="http://www.abc.net.au/news/2017-02-07/gambling-inquiry-into-new-tasmanian-laws/8247910">the majority of Tasmanians</a> don’t care about pokies, citing research conducted by his company. He said he wasn’t aware of <a href="http://www.pc.gov.au/inquiries/completed/gambling-2009/report">contradictory research reported at table 14.2</a> of the Productivity Commission’s 2010 Gambling inquiry report. That research indicated that over 83% of Tasmanians wanted the pokies reined in. </p>
<p>We know now what pokies do, and <a href="https://theconversation.com/bright-lights-big-losses-how-poker-machines-create-addicts-and-rob-them-blind-49143">how they do it</a>. People under stress do not make more use of pokies because they’re weak or lacking in will. </p>
<p>Pokies use the brain’s reward mechanism to release dopamine. This mechanism is strongly linked to addiction, and, like narcotics, provides temporary relief from stress and anxiety. Pokies provide a perfect storm of addictive incentives. Locating them, or allowing them to be located, in areas where people are likely to be stressed and in need of relief represents a cynical and arguably exploitative way to make money.</p>
<p>We have presented the data to the Tasmanian committee. One thing that could be done immediately is increase the transparency of data to at least the level of disclosure provided in Victoria. Better data means better analysis and more scrutiny of a harmful industry. That would likely lead to better regulation and less harm.</p>
<p>For now, what is clear is allowing pokies to continue to be concentrated in Tasmania’s most stressed local areas will continue to cause preventable harm to tens of thousands of Tasmanians every year.</p><img src="https://counter.theconversation.com/content/73525/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation and The (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens. He made a submission to the Tasmanian Parliamentary Inquiry into future gaming markets and is scheduled to give evidence to the committee in late February.</span></em></p>Allowing pokies to continue to be concentrated in Tasmania’s most stressed local areas will continue to cause preventable harm to tens of thousands of Tasmanians every year.Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/705742016-12-19T01:43:08Z2016-12-19T01:43:08ZColes wants $1 maximum bets for pokies – so why won’t the pokie-makers play ball?<figure><img src="https://images.theconversation.com/files/150626/original/image-20161218-28140-1u6vda9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Pokies are great money-spinners for hotels, clubs and casinos in Australia, and increasingly internationally.</span> <span class="attribution"><span class="source">AAP/Tracey Nearmy</span></span></figcaption></figure><p>Wesfarmers, operator of Coles and other retail brands, <a href="http://www.afr.com/business/gambling/wesfarmers-stonewalled-on-push-for-1-pokies-20161218-gtdgge">reportedly wants to pursue</a> harm-prevention modifications to its poker machines. It has asked five pokie manufacturers, including Aristocrat Leisure, for help in trying out games with a maximum bet of A$1.</p>
<p>All have refused, apparently citing costs.</p>
<p>Like Woolworths, Coles – which operates the pokies through its hotels – is a major player in this space. It operates more than 3,000 machines in Queensland and South Australia. But, seemingly unlike Woolworths, Coles is concerned about these machines’ potential for harm.</p>
<h2>A true money-spinner</h2>
<p>Woolworths, through its subsidiary ALH Limited, <a href="http://www.smh.com.au/business/retail/poker-machine-reform-raises-stakes-for-woolworths-supermarket-chain-20160721-gqb4qz.html">operates</a> more than 12,000 pokies across Australia. Net revenue from these is around $1.1 billion per year; the business is a 75:25 partnership with the Mathieson family’s businesses.</p>
<p>Coles’ revenue from its machines is much lower – around $185 million. </p>
<p>Pokies are great money-spinners for hotels, clubs and casinos in Australia, and increasingly internationally. But the technology behind them is not particularly novel. Contemporary pokies are quite straightforward computers, albeit housed in a novel case and with a customised display.</p>
<p>What makes them different is their software, which uses well-established psychological principles to <a href="https://theconversation.com/bright-lights-big-losses-how-poker-machines-create-addicts-and-rob-them-blind-49143">make them “attractive”</a> to punters. </p>
<p>But the features that make pokies “attractive” also make them addictive. The Productivity Commission <a href="http://www.pc.gov.au/inquiries/completed/gambling-2009/report#contents">has estimated</a> that 42% of pokie revenue comes from people with a serious pokie addiction – and another 20% comes from those with a developing habit.</p>
<h2>Manufacturers have acted in the past</h2>
<p>Given pokies’ computerised basis, the manufacturers’ refusal to work with Coles is remarkable. </p>
<p>Like all companies in the business, Aristocrat Leisure prides itself on its <a href="https://www.aristocrat.com/innovation/">innovative capacity</a>. Through its then-European subsidiary Aristocrat Lotteries, Aristocrat developed and provided the Multix game terminal <a href="http://www.responsiblegambling.org/docs/discovery-2012/the-norwegian-story---with-a-happy-ending-.pdf?sfvrsn=12">to Norsk Tipping</a>, the Norwegian gambling operator, from 2008 onwards. Aristocrat <a href="http://www.gamingintelligence.com/manda/28191-playtech-completes-acquisition-of-aristocrat-lotteries">sold the business</a> in 2014.</p>
<p>The interesting aspect of the Multix terminal is that it was intended to provide a much safer and less harmful slot-machine-like product. These replaced the existing slots, which the Norwegian government nationalised and withdrew from operation in July 2007. </p>
<p>The machine provides a platform for multiple games, imposes a statutory limit on how much people can spend, and operates on an account-only basis. Users can track spending and reduce their daily limits if they want to be careful. Thus, it incorporates a host of consumer safety and harm minimisation/prevention measures.</p>
<p>Closer to home, the Victorian government <a href="http://www.betsafe.com.au/resources/gambling_articles/developments_in_responsible_gambling/">introduced</a> a reduced maximum bet limit and reduced load-up limits in 2009. Aristocrat, along with other manufacturers, had to find a solution for these new requirements. That wasn’t very difficult. </p>
<p>The game software required some alteration, and cabinet artwork had to be reconfigured in some cases. It cost somewhere in the tens of millions, but there were no publicly aired complaints and it was implemented smoothly. For a business that makes around $2.6 billion a year, that was small change.</p>
<p>The Tasmanian pokie industry has recently undergone a <a href="https://www.treasury.tas.gov.au/domino/dtf/dtf.nsf/LookupFiles/TGCprogress5July2013.pdf/$file/TGCprogress5July2013.pdf">similar transformation</a>, again without too much fuss.</p>
<p>Perhaps the reduction from $10 bets to $5 bets didn’t threaten the industry too much. And reducing the load-up limit from $9,949 to $1,000 in Victoria was a no-brainer.</p>
<h2>Why won’t the manufacturers play ball?</h2>
<p>There may be many reasons for the manufacturers’ refusal to agree to Coles’ request, but it is clear the vanguard for the Australian pokie industry lies in New South Wales – particularly with lobby group ClubsNSW. Club businesses <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/">operate</a> 70% of NSW’s 95,000 pokies. These made their operators $5.8 billion in 2014-15, of which the clubs made around $4 billion.</p>
<p>Pokie games are upgraded regularly, and the machines themselves tend to be turned over every five years or so. Even putting aside maintenance and upgrades, selling around 20,000 machines every year to clubs and pubs in NSW would earn the manufacturers around $500 million. So, losing a share of that business would be something to avoid.</p>
<p>A successful trial of $1 bets could demonstrate that pokie harm could be reduced. If that occurred, the revenue model for NSW club businesses <a href="https://www.crikey.com.au/2011/09/27/clubs-australia-campaignand-pokies-revenue/">that rely heavily</a> on pokie revenue would be rattled. </p>
<p>When the Productivity Commission recommended $1 maximum bets and pre-commitment as likely good responses to pokie addiction and harm, the gambling industry, led by ClubsNSW, <a href="http://insidestory.org.au/the-lobby-group-that-got-much-more-bang-for-its-buck">railed against them</a> as unproven and experimental.</p>
<p>That wasn’t true, <a href="http://link.springer.com/article/10.1007%2Fs10899-005-5560-8">even then</a>, as the industry well knows – it <a href="http://www.psych.usyd.edu.au/gambling/GIO_report.pdf">funded the original research</a>. But why not seize the opportunity to acquire some more useful evidence through a trial?</p>
<p>The harm pokies cause is widespread and tends to affect those already under significant stress. Moving to $1 bets is a good first step toward reducing this harm, and Coles acknowledges it can’t continue in this business unless it finds a way to reduce avoidable harm. </p>
<p>There are many other ways to limit harm, however, as the manufacturers know full well. They’ve been innovating to make their products as “attractive” as possible for the last 100 years or so.</p>
<p>If they wanted to, they could also lead the way in making machines safe, and fun. Perhaps the super profits might be wound back. The operators would be able to claim they really do care about their customers’ wellbeing. </p>
<p>Clearly, that’s a claim Coles is keen to make. The manufacturers? Maybe not so much.</p><img src="https://counter.theconversation.com/content/70574/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from Victorian and South Australian government agencies (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Centre, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens and of the Alliance for Gambling Reform. </span></em></p>The harm pokies cause is widespread and tends to affect those already under significant stress. $1 bets are a good first step toward reducing this harm.Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/669822016-10-20T19:20:21Z2016-10-20T19:20:21ZAreas with more poker machines have higher rates of domestic violence<figure><img src="https://images.theconversation.com/files/141910/original/image-20161016-30269-j5wc6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Domestic violence impacts should be considered when regulators make decisions about granting licenses for poker machines.</span> <span class="attribution"><span class="source">AAP/Tracey Nearmy</span></span></figcaption></figure><p>Our <a href="http://dx.doi.org/10.1016/j.socscimed.2016.06.008">recently published research</a> suggests a link between the number of poker machines in an area and levels of domestic violence.</p>
<p>We compared publicly available data on poker machine numbers with police-recorded domestic violence incidents in Victoria between 2005 and 2014. Specifically, we compared the number of pokies and pokie venues in each Victorian postcode to the number of “family violence incidents” recorded by the police, and the number of those incidents that led to a formal charge of assault.</p>
<p>Police-recorded domestic violence is associated with many other social indicators apart from poker machines. For that reason, we statistically adjusted for other local indicators. These included:</p>
<ul>
<li><p>economic gender inequality;</p></li>
<li><p>social and economic disadvantage;</p></li>
<li><p>the proportion of people from an English-speaking background;</p></li>
<li><p>the average number of children per woman;</p></li>
<li><p>the proportion of residents who identify as Indigenous;</p></li>
<li><p>the median age; and</p></li>
<li><p>geographic remoteness.</p></li>
</ul>
<h2>What we found</h2>
<p>We found a statistically significant correlation between poker machine density and police-recorded domestic violence rates among postcodes. This relationship existed even after accounting for the contextual factors listed above.</p>
<p>In terms of relative risk, the police recorded 20% fewer family violence incidents and 30% fewer domestic violence assaults when postcodes with no poker machines were compared with postcodes with at least 75 pokies per 10,000 people. </p>
<p>Similar patterns were evident when the number of poker machine venues was analysed instead of the number of poker machines.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/142269/original/image-20161018-15099-q046zy.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/142269/original/image-20161018-15099-q046zy.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=716&fit=crop&dpr=1 600w, https://images.theconversation.com/files/142269/original/image-20161018-15099-q046zy.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=716&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/142269/original/image-20161018-15099-q046zy.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=716&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/142269/original/image-20161018-15099-q046zy.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=900&fit=crop&dpr=1 754w, https://images.theconversation.com/files/142269/original/image-20161018-15099-q046zy.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=900&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/142269/original/image-20161018-15099-q046zy.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=900&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Author provided/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>These correlations are stronger than we expected. However, it is important to note they account for only a small part of the variation in police-recorded domestic violence rates between postcodes.</p>
<p>We found a correlation between police-recorded domestic violence and poker machine accessibility. But we need to stress that we are not in a position to make strong claims about cause and effect. What we can say is there is more police-recorded violence in areas with more poker machines.</p>
<h2>How it fits in to what we know</h2>
<p>What our research suggests is the uneven provisioning of poker machines across Victoria may be contributing to the incidence of domestic violence in areas with many poker machines. This should perhaps not come as a surprise.</p>
<p><a href="http://www.ajgiph.com/content/3/1/13">Previous research</a> in Victoria, South Australia and Tasmania has shown that more than half the people receiving problem gambling treatment have recent experience of domestic violence, either as survivors or perpetrators.</p>
<p>Nationally representative research from the US suggests that, compared to otherwise similar individuals, “pathological gamblers” are <a href="http://dx.doi.org/10.1016/j.jpsychires.2009.07.010">more than 20 times</a> more likely to be violent to their spouse.</p>
<p>It may not merely be the case that those involved in abusive relationships become entangled with poker machines – although this is undoubtedly the case for many people. Rather, our study points toward the possibility that the increased provision of poker machines may lead to an increased risk of violence at the population level.</p>
<p>Our research did specifically explore the processes driving this relationship. We think a complex range of dynamics are likely to be involved. What is clear is that more poker machines in an area generally leads to more gambling and more problem gambling. And, as previous research suggests, a very substantial proportion of problem gamblers come to be involved in abusive relationships. </p>
<p>As such, our study suggests domestic violence impacts should be considered when regulators make decisions about granting licenses for poker machines.</p>
<p>We are not making the case that poker machines cause violence directly. Gender inequality is clearly the root cause of domestic violence. However, it is apparent from <a href="http://www.oecd.org/derec/49872444.pdf">decades of research</a> that many other factors are indirectly implicated in the population-level incidence of domestic violence. It appears poker machines may be part of the mix in Australia.</p>
<hr>
<p><em>The National Sexual Assault, Family & Domestic Violence Counselling Line – 1800 RESPECT (1800 737 732) – is available 24 hours a day, seven days a week for any Australian who has experienced, or is at risk of, family and domestic violence and/or sexual assault.</em></p><img src="https://counter.theconversation.com/content/66982/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Francis Markham has been employed on projects funded by the Australian Research Council, the government of the Northern Territory and the government of the Australian Capital Territory. He is currently employed on a project funded by the Community Benefit Fund of the Northern Territory. He is a member of the Public Health Association of Australia.</span></em></p><p class="fine-print"><em><span>Bruce Doran has previously received research funding from the Australian Research Council and several state government departments.</span></em></p><p class="fine-print"><em><span>Martin Young has previously received research funding from the Australian Research Council, Gambling Research Australia, and several state government departments. His research is currently funded by the Comminity Benefit Fund of the Northern Territory Government. In addition to his SCU position, he a Visiting Fellow, Fenner School of Environment and Society, ANU.</span></em></p>The uneven provisioning of poker machines across Victoria may be contributing to the incidence of domestic violence in areas with many poker machines.Francis Markham, PhD Candidate, The Fenner School of Environment and Society, Australian National UniversityBruce Doran, Senior Lecturer (Geographic Information Systems), Fenner School of Environment and Society, Australian National UniversityMartin Young, Associate Professor, Centre for Gambling Education and Research, Southern Cross UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/662662016-09-29T20:08:51Z2016-09-29T20:08:51ZWhy do we need ‘Pokie-Leaks’? We already know how pokies work<figure><img src="https://images.theconversation.com/files/139678/original/image-20160929-27030-zumub0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">How do myths about poker machines develop?</span> <span class="attribution"><span class="source">AAP/Dan Peled</span></span></figcaption></figure><p>A trio of Australian politicians recently called for whistleblowers to <a href="http://www.abc.net.au/news/2016-09-27/pokieleaks-australians-urged-to-leak-gambling-industry-secrets/7878528">reveal secrets</a> about how the gambling industry operates. </p>
<p>While it is up for debate as to whether there are questions to be answered about various industry tactics and links to politicians, what isn’t a secret is how poker machines actually work. This information is publicly available in the <a href="http://www.gamingta.com/pdf/playerinfo.pdf">player information booklet released</a> by the Gaming Technologies Association, as well as in <a href="http://jgi.camh.net/doi/full/10.4309/jgi.2004.11.21">academic articles</a>. </p>
<p>But how do people interpret such information? And how do myths about pokies develop?</p>
<h2>Misconceptions about two basic principles</h2>
<p>While poker machines are incredibly complex, they work on two basic principles:</p>
<ul>
<li><p>they produce random outcomes; and </p></li>
<li><p>they have an expected return set somewhere between 85% and 92%, depending on the jurisdiction and choices made by the venue. </p></li>
</ul>
<p>However, gamblers often fail to understand these concepts properly. A large component of therapy for problem gamblers, developed at the <a href="http://www.psych.usyd.edu.au/gambling_treatment_clinic/">University of Sydney’s Gambling Treatment Clinic</a> by Fadi Anjoul, is based on tackling these misconceptions and helping them understand how those misconceptions may have been driving their gambling.</p>
<p>Psychologists have long known that most people <a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.412.7679&rep=rep1&type=pdf">struggle with understanding randomness</a>. Part of the problem is the way we use the word “random” in everyday speech. </p>
<p>For example, consider the sentences “the weather is random” or “the buses come at random”. Most would understand what these sentences mean: weather and bus schedules are difficult to predict. Despite this, we often make predictions on the weather and on public transport. </p>
<p>So, when we hear “poker machines are random”, we naturally interpret this in the same way: that poker machines follow general patterns, and the longer you go without a win the <a href="http://jgi.camh.net/doi/full/10.4309/jgi.2000.2.9">more likely one is to occur</a>.</p>
<p>This explains why gamblers often spend long hours in front of a poker machine. When players haven’t had a win, they believe one is due, so it makes sense to keep going. Conversely, if they are winning, it means a machine is “paying” – and it makes sense to keep going. </p>
<p>The truth is, however, that pokies do not work the same way as the weather or a bus schedule. They are not difficult to predict: they are impossible to predict. </p>
<p>Pokies contain a random number generator, which produces each outcome shown, completely independent of all the games that have come before and all the games that will come after. There is no pattern to follow and a win is never “due”.</p>
<p>Part of the reason for the persistence of the idea that poker machines are eventually “due” to pay is a misunderstanding of the other principle underlying their operation. </p>
<p>As mentioned above, poker machines in Australia are set with an expected return of between 85% and 92%. This is often phrased as “a machine must pay back around 90%”. In most people’s understanding, this leads to the assumption that if $100 has been put in, at some point $90 must come out. </p>
<p>Thus, people assume if they have put a certain amount in a poker machine and got nothing back, a win is somehow due to come. But the real meaning of this percentage is somewhat different. </p>
<p>While there are many different ways of explaining expected value, the simplest way of thinking about it with gambling is that it is referring to the gap between the probability of a win and the pay you get for it. </p>
<p>If a game “pays back” 90%, this means the payback you receive when you win is 90% of what you should get if it was a fair game – that is, one where you would expect to break even in the long term. </p>
<p>It’s like betting $1 on a coin toss, where you have a one-in-two chance of winning, but only get back $1.80 if you get it right. As it is a random game, you might have wins that put you ahead for a short time, but the longer you play the more likely it is that you will lose more than you win back. </p>
<p>So, saying bets on a poker machine have an expected value of 90% doesn’t mean $90 will eventually come out for every $100 put in. It means the game is unfair, and if you keep playing you’ll eventually lose everything.</p>
<h2>Educating gamblers</h2>
<p>These general principles underlie all forms of gambling – be it roulette, lotto, horse racing or sports betting. </p>
<p>What is different about pokies, however, is that their workings are hidden. We can see the ball on the roulette wheel or the horses running around the track, but we cannot see the random number generator inside a poker machine. </p>
<p>Thus, it is understandable why there are more misunderstandings about pokies than other forms of gambling. But we do already <a href="http://www.gamingta.com/pdf/playerinfo.pdf">have the information</a> on how poker machines work for those who care to look.</p>
<p>From this, it could be argued that what is needed to tackle problem gambling in Australia are not leaks of information on how the gambling industry operates, but a focus on education – using the information we already have on how gambling works to correct the understandable misconceptions that exist among gamblers.</p><img src="https://counter.theconversation.com/content/66266/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher John Hunt receives funding from NSW Responsible Gambling Fund. </span></em></p>While it is up for debate as to whether there are questions to be answered about various industry tactics and links to politicians, what isn’t a secret is how poker machines actually work.Christopher John Hunt, Clinical Psychologist, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/642992016-08-24T02:34:07Z2016-08-24T02:34:07ZGambling gallops on, stats reveal – but what can be done to curb its harms?<figure><img src="https://images.theconversation.com/files/135237/original/image-20160824-30231-mryeca.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sports betting in Australia has been growing rapidly in recent years – all that advertising seems to be paying off.</span> <span class="attribution"><span class="source">AAP/Julian Smith</span></span></figcaption></figure><p>Data <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/">released late last week</a> reveal Australia’s gambling habit is growing as fast as ever. The Australian Gambling Statistics for 2014-15 show adult Australians, on average, lost A$1,242 a year on gambling. </p>
<p>The amount varies dramatically by state: in New South Wales the average loss was $1,518; in Tasmania, $762.</p>
<p>Most gambling expenditure goes on the pokies. Out of a total of $22.7 billion in 2014-15, $11.6 billion (51%) was lost on poker machines in pubs and clubs. </p>
<p>This also varies by state. In NSW, $5.7 billion was spent on such pokies. In Victoria, it was $2.6 billion. In Western Australia, nothing. </p>
<p>Casino gambling (which includes poker machines in casinos) grew by more than 16% in real terms (that is, adjusted for inflation) to $5.2 billion. The biggest chunk of that ($1.9 billion) was in Victoria. NSW placed second, with $1.4 billion in casino losses.</p>
<p>Surprisingly, growth rates in many gambling products have been strong. Sports betting has been growing rapidly in recent years – up to 17% per year to June 2014. </p>
<p>This growth was initially fuelled by a <a href="http://www.theage.com.au/news/horse-racing/court-ruling-a-spur-for-betfair/2008/03/27/1206207302919.html">High Court</a> decision in 2008 that allowed interstate bookies to operate in states where they didn’t hold a licence. It got a second kick from <a href="https://theconversation.com/tom-waterhouse-takes-the-money-what-now-for-gambling-in-australia-16893">a series of takeovers</a> by big overseas bookies. However, the latest figures show recent growth has eclipsed even the very strong growth rates of earlier years, with real growth of 28.2% to June 2015.</p>
<p><a href="https://theconversation.com/sport-tom-waterhouse-and-the-gamblification-of-everyday-life-13170">All that advertising</a> seems to be paying off. Australians lost $814.6 million on sports betting last year.</p>
<p>The pokies are still the biggest game in town, however, and by a fair margin. Of the $1,518 lost per head in NSW, $978 (64.8%) went into pokies in pubs or clubs. This is unsurprising, given NSW has around 95,000 poker machines; 70% in clubs. The rest of Australia (bar WA) has to make do with the remaining 100,000.</p>
<h2>Is this growth a problem?</h2>
<p>Pokies are far and away the biggest cause of gambling harm. Around 75% or more of those directly experiencing harm from gambling <a href="http://www.problemgambling.gov.au/facts/">do so because of poker machines</a>. And most people don’t use them. </p>
<p>A <a href="https://www.responsiblegambling.vic.gov.au/information-and-resources/research/recent-research/study-of-gambling-and-health-in-victoria">recent study</a> found only about 16% of adult Victorians use pokies. What that means is the per-capita expenditure of actual users is not an average of $559 per year, but about $3,493. Among that group, a smaller proportion use pokies regularly, and that group sustains losses many times greater than the average. </p>
<p>Gambling harm is becoming more concentrated. A body of evidence now indicates it is <a href="http://www.tandfonline.com/doi/full/10.3109/16066359.2012.727507">concentrated in highly stressed communities</a>, where disadvantage and poverty are turbo-charged by gambling losses.</p>
<p>The growth in sports betting is, to put it mildly, phenomenal. Most worryingly, a body of research is beginning to demonstrate that <a href="http://www.responsiblegambling.vic.gov.au/information-and-resources/research/recent-research/child-and-parent-recall-of-gambling-sponsorship-in-australian-sport">children are highly exposed</a> to gambling ads. This is because voluntary broadcast <a href="http://www.freetv.com.au/media/Code_of_Practice/Free_TV_Commercial_Television_Industry_Code_of_Practice_2015.pdf">advertising rules</a> allow gambling ads during G-rated programming – if it is a sports broadcast. </p>
<p>This loophole defies explanation, other than to acknowledge that gambling ads are now a lucrative source of revenue for broadcasters. Sporting codes get a share via broadcast rights payments, pumped up by the advertising budget of bookies with deep pockets and a desire to grow their market.</p>
<h2>What can be done?</h2>
<p>The new parliament offers an opportunity to rein in some of these excesses.</p>
<p>The lowest-hanging fruit is the unrestricted advertising that exposes kids to a regular dose of gambling normalisation. The federal government has complete control of this; it could end it whenever it wants. The <a href="https://theconversation.com/government-ignores-elephant-in-the-room-in-response-to-online-gambling-review-52751">consumer protection measures</a> promised before the election are a good start, but advertising is the elephant in the room that needs to be tackled.</p>
<p>And the pokies? Substantial political donations and careful support of selected major party politicians <a href="https://theconversation.com/paying-the-piper-and-calling-the-tune-following-clubsnsws-political-donations-60639">have worked wonders</a> for the pokie lobby since 2010, when the Gillard-Wilkie agreement threatened their rivers of gold. But the concerns of crossbench MPs like Nick Xenophon and Andrew Wilkie are unabated.</p>
<p>Again, the federal government has clear power to act. Xenophon and Wilkie have <a href="http://www.abc.net.au/news/2016-07-19/xenophon,-wilkie-to-take-pokies-fight-to-marginal-seats/7642218">made it clear</a> they expect gambling reform to be front and centre in the new parliament. </p>
<p>These latest figures throw fuel on the fire of their concern. Gambling harm is a major source of harm to the health and well-being of the community. It’s right up there with major depression, <a href="http://www.responsiblegambling.vic.gov.au/information-and-resources/research/recent-research/assessing-gambling-related-harm-in-victoria-a-public-health-perspective">for example</a>. State taxes are one thing; wholesale attacks on the health and well-being of the community are another thing entirely.</p>
<p>Whatever the new parliament holds, gambling reform seems certain to be part of the mix.</p><img src="https://counter.theconversation.com/content/64299/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from Victorian and South Australian government agencies (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Centre, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens and of the Alliance for Gambling Reform. </span></em></p>Gambling losses in Australia are now close to $23 billion. What’s driving this? And do we need to reform gambling regulation?Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/626912016-07-25T19:45:31Z2016-07-25T19:45:31ZThe power of rewards and why we seek them out<figure><img src="https://images.theconversation.com/files/131716/original/image-20160725-31178-tvvwb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Games like Pokémon GO cleverly exploit our psychology in the way they dole our rewards to keep players hooked.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Any dog owner will tell you that we can use a food reward as a motivation to change a dog’s behaviour. But humans are just as susceptible to rewards too. </p>
<p>When we get a reward, special pathways in our brain become activated. Not only does this feel good, but the activation also leads us to seek out more rewarding stimuli.</p>
<p>Humans show these neurological responses to many types of rewards, including <a href="http://www.oxcns.org/papers/558%20Rolls%202016%20Reward%20systems%20in%20the%20brain%20and%20nutrition.pdf">food</a>, <a href="http://www.nature.com/nrn/journal/v17/n4/full/nrn.2016.26.html">social contact</a>, <a href="http://www.sciencedirect.com/science/article/pii/S1364661314002538">music</a> and even <a href="http://pss.sagepub.com/content/27/4/455">self-affirmation</a>. </p>
<p>But there is more to reward than physiology: differences in how often and when we get rewarded can also have a big impact on our experience of reward. In turn, this influences the likelihood that we will engage in that activity again. Psychologists describe these as schedules of reinforcement. </p>
<h2>It’s not (just) what you do, it’s when you do it</h2>
<p>The simplest type of reinforcement is continuous reinforcement, where a behaviour is rewarded every time it occurs. Continuous reinforcement is a particularly good way to train a new behaviour.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/qy_mIEnnlF4?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>But intermittent reinforcement is the strongest way to maintain a behaviour. In intermittent reinforcement, the reward is delivered after some of the behaviours, but not all of the behaviours.</p>
<p>There are four main intermittent <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1284863/pdf/12083682.pdf">schedules of reinforcement</a>, and some of these are more powerful than others.</p>
<h3>Fixed Ratio</h3>
<p>In the Fixed Ratio schedule of reinforcement, a specific number of actions must occur before the behaviour is rewarded. For example, your local coffee shop tells you that after you stamp your card nine times, your tenth drink is free. </p>
<h3>Fixed Interval</h3>
<p>Similarly, in the Fixed Interval schedule, a specific time must pass before the behaviour is rewarded. It is easy to think about this schedule in terms of work paid on an hourly basis – you are rewarded with money for every 60 minutes of work you complete.</p>
<h3>Variable Ratio</h3>
<p>For the Variable Ratio schedule, rewards are given after a varying number of behaviours – sometimes after four, sometimes five and other times 20 – making the reward more unpredictable.</p>
<p>This principle can be seen in poker (slot) machine gambling. The machine has an average win ratio, but that doesn’t guarantee a consistent rate of reward, so players continue in the hope that the next press of the button is the one that pays off. </p>
<h3>Variable Interval</h3>
<p>The Variable Interval schedule works on the same unpredictable principle, but in terms of time. So rewards are given after varying intervals of time – sometimes five minutes, sometimes 30 and sometimes after a longer period. So at work, when your boss drops in at random points of the day, your hard work is reinforced.</p>
<p>It is easy to see that rewards given on a variable ratio would reinforce behaviours far more effectively – if you don’t know when you will be rewarded, you continue to act, just in case!</p>
<p>Psychologists describe this persistent behaviour as a <a href="https://www.researchgate.net/profile/Timothy_Wells3/publication/221774874_High-frequency_gamblers_show_increased_resistance_to_extinction_following_partial_reinforcement/links/00b7d52e65715ee96f000000.pdf">resistance to extinction</a>. Even after the reward is completely taken away, the behaviour will remain for a while because you aren’t sure if this is just a longer interval before the reward than usual.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=463&fit=crop&dpr=1 600w, https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=463&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=463&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=582&fit=crop&dpr=1 754w, https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=582&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/131556/original/image-20160722-21890-bp1ldc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=582&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">We all respond to rewards, but only if they are rewarding enough.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/elwillo/8383106148/">Keith Williamson/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<h2>Do rewards have a ‘dark side’?</h2>
<p>You can certainly use these principles to shape someone’s behaviour. Loyalty cards for supermarkets, airlines, and restaurants all increase the likelihood of our continued use of those services.</p>
<p>Marketers can also use reward to their advantage. If you can make someone feel anxious because they don’t own a particular product – maybe the latest or greatest version of something they already have – when the person buys the new product, the reward comes from the reduction in anxiety.</p>
<p>Want more help around the house? Start off with praising your partner/kids every time they do the desired behaviour, and once they are doing it regularly, slip into a comfortable variable ratio mode.</p>
<p>And of course, sometimes rewards can result in addiction.</p>
<p>Addiction used to be seen in the context of substance use, and there is indeed substantial evidence for the role of reward pathways in <a href="http://onlinelibrary.wiley.com/doi/10.1111/acer.12884/full">alcohol and other drug</a> addiction. </p>
<p>Obviously, the nature of addiction is complex. But more recently, there is evidence of addiction that can be based on behaviour, rather than ingesting a substance. </p>
<p>For example, people show addiction-like behaviours related to their <a href="http://www.uclep.be/wp-content/uploads/pdf/Pub/Billieux_CPR_2012.pdf">mobile phone use</a>, <a href="http://www.tandfonline.com/doi/abs/10.1080/02791072.2012.660110">shopping</a> and even <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4861725/">love relationships</a>. </p>
<h2>Pokémon GO rewards</h2>
<p>Recently the world has watched the introduction of the mobile game Pokémon GO. Cleverly, this game employs multiple schedules of reinforcement which ensure users continue to feel the need to “catch ‘em all”. </p>
<p>On the fixed ratio schedule, users know that if they catch enough Pokemon they will level up, or possess enough candy to evolve. The hatching of eggs also follows a fixed interval, in this case it’s distance walked.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1010&fit=crop&dpr=1 600w, https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1010&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1010&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1269&fit=crop&dpr=1 754w, https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1269&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/131524/original/image-20160721-32610-12g8sy0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1269&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Discovering a rare Pokémon can keep players hooked.</span>
</figcaption>
</figure>
<p>But on the variable ratio and interval schedules, users never know how far they need to wander before they will find a new Pokemon, or how long it will be before something other than a wild Pidgey appears!</p>
<p>So they continue to check the app regularly throughout the day. No wonder Pokemon GO is so addictive.</p>
<p>But it’s not just Pokemon masters who fall prey to online reward schedules.</p>
<p>Checking our emails at various points of the day is reinforced when there is something in our inbox – a variable interval schedule. This makes us more likely to check for emails again.</p>
<p>Our social media posts are reinforced with “likes” on an variable ratio schedule. You may be rewarded with likes on most posts (continuous reinforcement), but occasionally (and importantly, unpredictably) a post will be rewarded with much more attention than other posts, which encourages more posting in the future. </p>
<p>Now, if you will excuse us, we just need to click “refresh” on our inbox. Again.</p><img src="https://counter.theconversation.com/content/62691/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Pokemon GO craze has tapped in to our desire to seek out rewards. But there different types of rewards in life, each designed to capture our attention, even train our behaviour.Rachel Grieve, Senior Lecturer in Psychology, University of TasmaniaEmily Lowe-Calverley, PhD Candidate in Cyberpsychology, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/495802015-10-22T19:11:15Z2015-10-22T19:11:15ZPoker machines and the law: when is a win not a win?<figure><img src="https://images.theconversation.com/files/99291/original/image-20151022-8013-1pbor9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">How could Maurice Blackburn prove that poker machine gamblers might be misled by the 'losses disguised as wins' technique? </span> <span class="attribution"><span class="source">AAP/Paul Jeffers</span></span></figcaption></figure><p>If I took all of the money out of your wallet, you’d probably feel as though you’d lost something – wouldn’t you? Now imagine instead that I only took 80% of your money. Would you feel as though you had “won” the remaining 20%?</p>
<p>What if I tried to convince you that you had actually benefited from this transaction by playing happy music and letting off a few firecrackers?</p>
<p>This thought experiment might help you to get your head around a proposed legal action <a href="http://www.abc.net.au/news/2015-10-22/poker-machines-could-breach-consumer-law-lawyers-say/6875204">by law firm Maurice Blackburn</a> that plans to use Australian consumer law to argue that poker machine operators are engaging in misleading and deceptive conduct to entice gamblers into using poker machines.</p>
<p>Misleading and deceptive conduct is prohibited by Section 18 of the <a href="https://www.comlaw.gov.au/Details/C2011C00003">Australian Consumer Law</a>. The central test for this is whether the conduct is likely to mislead or deceive consumers having regard to all the circumstances. To apply this test, you need to identity both the “conduct” and the “relevant class of consumers”.</p>
<p>In this particular case, the class of consumers might be “gamblers”. Or, it might focus more specifically on “novice gamblers” or “problem gamblers”. </p>
<p>Maurice Blackburn seems to have identified a range of potential conduct that it would like to target in its action. One that particularly stands out is the technique known as <a href="http://theconversation.com/losses-disguised-as-wins-the-science-behind-casino-profits-31939">“losses disguised as wins”</a>. This is where a poker machine enables players to bet on more than one line and a minor win on one of these lines sets off a graphics and sound display that indicates a “win” when, in fact, the player has lost most of their money.</p>
<h2>Applying the law to poker machines</h2>
<p>The nice thing about consumer law is that it relies on fairly common-sense questions. So, the court would basically ask: if a poker machine displays a series of flashing symbols and music associated with winning and makes a chiming sound indicating that it is counting up winnings, would an ordinary and reasonable (novice) gambler be misled or deceived into thinking that they had won something despite having actually lost money?</p>
<p>Further inquiries or closer attention to detail that could enable a person to discover their error is not particularly relevant to this test. Also, the literal truth can be legally misleading, because the law recognises that humans do not behave rationally and tend to form an opinion in response to their overall impression of conduct.</p>
<p>In this case, for example, it might be argued that gamblers pay more attention to the flashing symbols and music than they do to their credit balance.</p>
<p>Previous cases give some idea of how the courts have applied this test. In <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2013/54.html?stem=0&synonyms=0&query=title%28%222013%20HCA%2054%22%29">ACCC v TPG Internet</a> in 2013, the High Court found that TPG Internet had misled consumers by advertising “Unlimited ADSL2+ for $29.95 per month” when this price was available only to customers who bundled broadband with a home phone service.</p>
<p>The important detail was that TPG’s advertisements actually contained an explanation of this condition, but it was displayed less prominently than the advertised deal.</p>
<p>The High Court found that the attention given to advertising material by an ordinary and reasonable person may well be “perfunctory” and, therefore, many will only absorb the “general thrust”. The court also emphasised that it was enough if consumers were sufficiently misled to engage further with the company, even if they subsequently understood the true nature of the offer and chose not to purchase anything.</p>
<p>The TPG case was followed by the Federal Court in <a href="http://www.austlii.edu.au/au/cases/cth/FCA/2014/634.html">ACCC v Coles Supermarkets</a> in 2014. In this case, the Australian Competition and Consumer Commission (ACCC) successfully alleged that Coles had misled consumers by advertising its reheated frozen par-baked bread with the words, “baked today, sold today” and “freshly baked”. This finding was made despite par-baked bread being able to be truthfully described as having been “baked”, and that Coles had detailed its par-baking method on its website. </p>
<p>Once again, the court emphasised the importance of considering both the context and the dominant message of the conduct.</p>
<h2>Forming an argument</h2>
<p>So, how could Maurice Blackburn possibly prove that gamblers might be misled by the “losses disguised as wins” technique? </p>
<p>It might draw on recent <a href="https://www.researchgate.net/publication/45659132_Losses_Disguised_As_Wins_in_Modern_Multi-Line_Video_Slot_Machines">Canadian research</a> which found that the flashing symbols and music that accompany “losses disguised as wins” trigger similar arousal levels in novice gamblers as real wins do – and that arousal is a key reinforcer in gambling behaviour. </p>
<p>In short, research seems to have demonstrated that novice gamblers do pay more attention to flashing symbols and music than they do to their credit balance. Perhaps unsurprisingly, these bright, loud messages appear to dominate.</p><img src="https://counter.theconversation.com/content/49580/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cristy Clark does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Law firm Maurice Blackburn that plans to use Australian consumer law to argue that poker machine operators are engaging in misleading and deceptive conduct to trick gamblers into using poker machines.Cristy Clark, Lecturer in Law, Southern Cross UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/491362015-10-19T19:06:59Z2015-10-19T19:06:59ZHow real are claims of poker machine community benefits?<figure><img src="https://images.theconversation.com/files/98606/original/image-20151016-30710-1m8pg69.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The level of contributions made by clubs to community purposes is low as a proportion of poker machine revenue.</span> <span class="attribution"><span class="source">Michael Coghlan</span></span></figcaption></figure><p>One of the <a href="http://www.clubsaustralia.com.au/about-us/club-industry">claims</a> made by poker machine clubs in Australia is that they provide significant support to local communities. Usually this is signified by the support clubs provide to causes such as junior football clubs or charities.</p>
<p>In New South Wales, the state with the most poker machines and the <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/aus-gambling-stats-31st-edn-aus-gambling-stats-31st-edn-summary-tables-2013-14.pdf">most poker machine expenditure</a>, peak body Clubs NSW claims to have distributed <a href="http://www.clubsaustralia.com.au/community-suppport/grants">A$92 million in grants last year</a>. That’s a lot of money. </p>
<p>But, as a percentage of total poker machine revenue, it’s quite modest. In 2013-14, poker machines in NSW <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/aus-gambling-stats-31st-edn-aus-gambling-stats-31st-edn-summary-tables-2013-14.pdf">made $5.4 billion</a>. As a proportion of that revenue, $92 million is 1.7%.</p>
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<p>In 2012, the lead author of this article and colleagues <a href="http://www.unitingcare.org.au/images/stories/publications/2012/120412_pub_rep_UA-Monash_Assessment_of_poker_machine_expenditure_and_community_benefit_claims_in_selected_Commonwealth_Electoral_Divisions.pdf">found</a> that the level of contributions clubs made to actual community purposes was low as a proportion of poker machine revenue. It ranged from 1.3% in NSW to 6.6% in the Australian Capital Territory.</p>
<h2>The data gap</h2>
<p>In 2010, the Productivity Commission <a href="http://www.pc.gov.au/inquiries/completed/gambling-2009/report">argued</a> that although clubs made community contributions:</p>
<blockquote>
<p>The claimed benefits of gambling revenue on sporting activities and volunteering do not appear strong. Indeed, the presence of gambling may adversely affect volunteering rates.</p>
<p>The (gross) value of social contributions by clubs is likely to be significantly less than the support governments provide to clubs through tax and other concessions.</p>
<p>Given this, there are strong grounds for the phased implementation of significantly lower levels of gaming revenue tax concessions for clubs, commensurate with the realised community benefits.</p>
</blockquote>
<p>Clubs, generally incorporated as “not for profit” mutual organisations, do not pay corporate tax and usually benefit from reduced gambling tax rates compared to corporate gambling operators.</p>
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<p>One of the difficulties noted in the 2012 study was that data on the actual poker machine revenue gained by clubs are not publicly available in NSW and Queensland; in the ACT and Victoria, these data are published. This gap in data availability makes it difficult to determine how much particular clubs are actually providing to the community compared to what they make from that community via the losses of people using poker machines.</p>
<p>In Victoria, club pokie venues are required to submit an annual <a href="http://www.vcglr.vic.gov.au/home/gambling/gaming+venue+operators/community+benefit+statements/">community benefit statement</a>, which demonstrates that they have provided at least 8.3% of their pokie revenue to community purposes. If they do this, they get a reduction of 8.3% on the gambling tax they pay, compared to hotel venues. </p>
<p>Venues don’t pay corporate tax. And when the GST was introduced, poker machine taxes were reduced proportionately. The tax breaks pokie venues get are quite significant, and the Productivity Commission’s comment about these arrangements was based on this rather special treatment.</p>
<h2>What do we know?</h2>
<p>Recently, we examined the most recent consolidated set of community benefit statements lodged in Victoria for 2013-14. Various categories of claims are available under the <a href="http://assets.justice.vic.gov.au/vcglr/resources/5878b1a9-e905-4cc9-bce4-3f11da0e53e9/ministerialorder_cbs_2012.pdf">Ministerial Order</a> prescribing these claims, including the venue’s operating costs – such as wages, insurance, electricity costs and renovations or equipment.</p>
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<p>We found that contributions to what most people would regard as genuine community benefits were very low. This category includes philanthropic and charitable purposes and gifts provided to community organisations. Across the entire club sector in Victoria, community benefit statement claims amounted to A$273.7 million in 2013-14. Of this, 6.8% – or A$18.5 million – was classed as “donations, gifts and sponsorships”. </p>
<p>In contrast, $209.4 million – 76.5% of claims – went to operating expenses, including wages, superannuation, management costs and insurances. </p>
<p>As a proportion of total club pokie losses ($846 million), donations, gifts and sponsorship amounted to 2.2%. </p>
<p>We examined three major Victorian AFL clubs – Carlton, Collingwood and Geelong – all of which operate multiple gambling venues.</p>
<p>In its 2013 report, Carlton claimed more than A$1.1 million in contributions to sporting facilities from the four pokie venues it operates – all of which went to Ikon Park, its training base for elite AFL footballers in inner-city Melbourne. </p>
<p>In 2014, no such claims were made. Instead, Carlton made claims of donations of nearly A$1.3 million to Ikon Park. These were regarded as donations, gifts and sponsorships, rather than sporting subsidies. </p>
<p>Nonetheless, these amounts went to the same purpose – one that arguably fails to provide little if any benefit to residents of the outer suburbs where their pokie venues are located.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/98607/original/image-20151016-30715-kd7pmi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/98607/original/image-20151016-30715-kd7pmi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=332&fit=crop&dpr=1 600w, https://images.theconversation.com/files/98607/original/image-20151016-30715-kd7pmi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=332&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/98607/original/image-20151016-30715-kd7pmi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=332&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/98607/original/image-20151016-30715-kd7pmi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=417&fit=crop&dpr=1 754w, https://images.theconversation.com/files/98607/original/image-20151016-30715-kd7pmi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=417&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/98607/original/image-20151016-30715-kd7pmi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=417&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">AFL club Carlton claimed donations and contributions from its pokie venues towards its inner-city training ground.</span>
<span class="attribution"><span class="source">AAP/Julian Smith</span></span>
</figcaption>
</figure>
<p>Collingwood claimed donations, gifts and sponsorships of A$180,000 from its two club venues in 2014. The overwhelming majority of its community benefit statement claims (more than $1.8 million) were operating costs – wages, superannuation and so forth.</p>
<p>Geelong operates two club venues. In 2014, it claimed donations gifts and sponsorships of A$111,000. The majority of its claims were for the operating costs of the venue – A$1.5 million, 93% of the total claimed.</p>
<h2>What now?</h2>
<p>It’s clear claims by clubs that they provide significant benefits to the community are overstated.</p>
<p>Greater benefits could be provided by applying the additional tax collected from hotel venues – in Victoria’s case this would be 8.3%, or more than A$70 million per year – and from the imposition of corporate tax on gambling revenues, particularly in the case of large clubs such as big NSW clubs. These are, in many ways, <a href="http://www.amazon.com/Casino-Clubs-NSW-Profits-politics/dp/1920899405">little different</a> from large commercial operations.</p>
<p>Some clubs do provide genuine benefits to their communities. Unfortunately, clubs have developed significant poker machine dependency – an average of about 60% of total revenue. Some club representatives may <a href="http://www.abc.net.au/news/2014-07-09/victorian-clubs-campaign-against-poker-machine-tax-hike/5583502">gild the lily</a> in their claims of community support, fearful perhaps of the consequences of more effective harm-minimising regulation or fairer taxation. </p>
<p>But to have a meaningful debate about the pros and cons of widespread pokie gambling, we also need to be able to understand exactly what they contribute, and what they cost in adverse community impacts. Given the data blackout that prevails in NSW and Queensland, we’re a long way from achieving that right now.</p>
<hr>
<p><em>This article is part of our special package on poker machines. See the other articles here:</em></p>
<p><a href="http://theconversation.com/15-things-you-should-know-about-australias-love-affair-with-pokies-49230">15 things you should know about Australia’s love affair with pokies</a></p>
<p><a href="http://theconversation.com/bright-lights-big-losses-how-poker-machines-create-addicts-and-rob-them-blind-49143">Bright lights, big losses: how poker machines create addicts and rob them blind</a></p><img src="https://counter.theconversation.com/content/49136/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from Victorian and South Australian governments (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. This included funding for the preparation of the Uniting care Australia report referred to in this article. He has received travel and co-operation grants from the Alberta Problem Gambling Research Centre, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Alliance for Gambling Reform and the Australian Greens. He was interviewed for the forthcoming ABC documentary 'KaChing!', and provided some technical advice to its producers.
</span></em></p><p class="fine-print"><em><span>Louise Francis is a recipient of an Australian Postgraduate Award (APA) scholarship funded by the Australian Government.</span></em></p><p class="fine-print"><em><span>During some stages of completing this research, Taylah Wynen was employed casually by the ALH Group, one of the largest operators of hotels and pubs across Australia that operate poker machines.</span></em></p>Some clubs provide genuine benefits to their communities. Unfortunately, clubs have developed significant poker machine dependency – an average of about 60% of total revenue.Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLouise Francis, PhD Candidate, Monash UniversityTaylah Wynen, Research Student, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/491432015-10-19T19:06:51Z2015-10-19T19:06:51ZBright lights, big losses: how poker machines create addicts and rob them blind<figure><img src="https://images.theconversation.com/files/98790/original/image-20151019-7773-pwpf2s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Why are pokies so attractive? And why do we spend so much on them?</span> <span class="attribution"><span class="source">AAP/Tracey Nearmy</span></span></figcaption></figure><p>Australians lose <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/aus-gambling-stats-30th-edn-summary-tables-2012-13.pdf">A$20 billion</a> on gambling every year, $11 billion of which goes on poker machines in pubs and clubs. Why, then, are pokies so attractive? And why do we spend so much on them?</p>
<p>Ubiquity is one reason. The high intensity – the rapid speed of operation and relatively high stakes of betting up to $10 per “spin” – is another. </p>
<p>But there’s also a more insidious mechanism at work here: the basic characteristics of poker machines, combined with constantly refined game features, stimulate the brain in a way that, in many cases, leads to addiction with symptoms similar to those <a href="http://www.boston.com/news/globe/ideas/articles/2007/08/19/your_brain_on_gambling/?page=full">associated with cocaine use</a>. </p>
<p>Poker machines cultivate addiction by teaching the brain to associate the sounds and flashing lights that are displayed when a punter “wins” with pleasure. And since the pattern of wins, or rewards, is random, the “reinforcement” of the link between the stimuli and pleasure is much stronger than if it could be predicted. </p>
<h2>Into the machine</h2>
<p>Poker machines, invented in the late 19th century, were originally mechanical, usually with three reels and a fixed and limited number of symbols available for display on the win line. Contemporary pokies are fully computerised. Usually housed in a retro-designed box, they refer to the old-fashioned simplicity of their predecessors. But they are as chalk and cheese compared to their mechanical forebears.</p>
<p>Today, the gambling machine industry employs an army of engineers, programmers, composers and graphic designers to produce increasingly sophisticated games and machines, with more ways of persuading people to part with their cash.</p>
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<p>At the heart of the modern pokie is a series of random number generators. These are constantly operating and, when the button is pushed, the answer is instantly known. Each number corresponds to a “reel” symbol – pokies still appear to have reels that roll around when the button is pushed, but this is an illusion. </p>
<p>In Australia, unlike some other jurisdictions, the order of symbols on each of the visual reels must be constant, but the number of symbols can be different on each reel. This includes winning symbols.</p>
<p>Old, mechanical pokies had a limited number of “stops” because of the limitations of physical space. Electronic pokies have no such limitations. And the difference is profound. A mechanical pokie with three reels, 20 symbols on each reel, including one prize symbol, would have winning odds of 1/20x1/20x1/20, or one in 8,000. </p>
<p>A contemporary pokie will often have major prize odds of one in 10 million or more. The number of symbols on each reel is not limited by physical space, so the odds of a major win can be tweaked by limiting the number of winning symbols on certain reels. </p>
<p>A five-reel game may have two winning symbols on each of the first three reels, each of 60 symbols in total. The last two reels may have only one winning symbol, with 80 total symbols. This configuration would produce odds of 2/60x2/60x2/60x1/80x1/80, equal to one in 230,400,000.</p>
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<p>This maths is at the heart of machine design. A slot game is just a spreadsheet. But it’s a spreadsheet with a lot of enhancements.</p>
<h2>Tricking the brain</h2>
<p>These configurations will regularly produce “near misses”. These occur when winning symbols appear on some lines, but not all. Experimental work has revealed that the brain stimulus produced by such <a href="http://scienceblogs.com/cortex/2010/05/18/the-near-miss/">“near misses”</a> can be almost as significant as those produced by a win. The level of reinforcement is thus dramatically increased, without any need for the machine’s operator to actually pay out.</p>
<p>Current pokies also allow multiline bets, whereby users can select all available lines to bet on in a single spin. Mechanical machines were limited to a single line of three reels. Pokies now allow users to bet on 50 or more lines, <a href="https://www.youtube.com/watch?v=vbzyttT5TlM">configured from</a> the video display of five reels and three lines. </p>
<p>The line across the middle is one such line, as are those above and below that line. But patterns of symbols are available in bewildering arrangements, combining lines and reels and multiplying the minimum bet by many times. A one-cent credit value game can thus be configured to allow at least a 50-cent minimum bet per spin if 50 lines are selected. </p>
<p>Most regular users <a href="http://onlinelibrary.wiley.com/doi/10.1111/add.12675/abstract">report</a> that their preferred style of use is “mini-max” – that is, the minimum bet with maximum lines. In a strange way, this reveals risk-averse behaviour. There’s nothing worse than seeing a win come up on a line you’re not playing, as a regular pokie user once explained to me. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/vbzyttT5TlM?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">How multiline poker machines work.</span></figcaption>
</figure>
<p>But regular users will also increase their stakes when they can. This is to provide for the possibility of bigger payouts, or in some cases because they believe – incorrectly – that doing so will increase the chances of a win.</p>
<p>Pokies also allow the credits bet per line to be multiplied, often by up to 20 times. Thus, a one-cent machine becomes a device capable of allowing bets of $10 per spin. Each spin can take as little as three seconds. </p>
<p>For this reason, the Productivity Commission <a href="http://www.pc.gov.au/inquiries/completed/gambling-2009/report/gambling-report-volume1.pdf">calculated</a> that such machines could easily average takings of up to $1,200 per hour. But this is an average, and it’s not uncommon to observe people spending $400 or more on poker machines in as little as ten minutes. </p>
<p>Machines that accept banknotes allow significant amounts to be “loaded up”. In New South Wales, pub and club pokies can accept $7,500 at any one time.</p>
<p>The other capability provided by multiline poker machines is a phenomenon known as <a href="http://www.ncbi.nlm.nih.gov/pubmed/20712818">“losses disguised as wins”</a>. This allows users to experience a reward from the game even when they’ve actually lost money. </p>
<p>If you bet on each of 50 lines at one cent per line and win a minor prize on one line (say, 20 credits), for instance, the machine will provide suitable reinforcement – sounds, lights and sometimes a congratulatory message – and acknowledge the credits won. But you’ve actually lost 30 cents.</p>
<p>This allows the amount of reinforcement delivered to the user to be magnified significantly – often doubled. Thus, the user feels like they’re winning quite regularly. In fact, they’re losing.</p>
<p>So what does all this stimulation do? Brain chemicals, particularly dopamine, are central to this process. Brain imaging <a href="http://www.boston.com/news/globe/ideas/articles/2007/08/19/your_brain_on_gambling/?page=full">has shown</a> in recent years that the pattern of dopamine release that occurs during a gambling session is strikingly similar to that of cocaine and other addictions.</p>
<p>Poker machines are essentially addiction machines that have been developed over a long period of time to be as attractive to their users as drugs are to theirs. </p>
<hr>
<p><em>This article is part of our special package on poker machines. See the other articles here:</em></p>
<p><a href="http://theconversation.com/15-things-you-should-know-about-australias-love-affair-with-pokies-49230">15 things you should know about Australia’s love affair with pokies</a></p>
<p><a href="http://theconversation.com/how-real-are-claims-of-poker-machine-community-benefits-49136">How real are claims of poker machine community benefits?</a></p><img src="https://counter.theconversation.com/content/49143/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from Victorian and South Australian governments (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Centre, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens and of the Alliance for Gambling Reform. He was interviewed for the forthcoming ABC documentary 'KaChing!', and provided some technical advice to its producers.
</span></em></p>The basic characteristics of pokies, combined with constantly refined game features, provide a stimulus to the brain that, in many cases, leads to a form of addiction.Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/487282015-10-07T00:12:02Z2015-10-07T00:12:02ZWhatever the truth of Garrett’s story, it’s about gambling industry politics and influence<figure><img src="https://images.theconversation.com/files/97504/original/image-20151006-7375-fq0sz7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Former minister Peter Garrett retracted claims about receiving cash in an envelope from a representative of a gambling industry lobby group.</span> <span class="attribution"><span class="source">AAP/Marianna Massey</span></span></figcaption></figure><p>Former federal minister Peter Garrett has <a href="http://www.abc.net.au/news/2015-10-06/peter-garrett-retracts-details-of-alleged-clubs-nsw-money-offer/6831408">retracted</a> claims that he received cash in an envelope from a representative of lobby group Clubs NSW at a gambling industry event in 2004. He now says he received a cheque made out to his electorate office, which he returned.</p>
<p>Garrett’s retraction is a little remarkable. He was the source (in some detail) of the original story, in a book he’s launching next week, and via a new ABC documentary, KaChing!. We can only speculate as to his reasons for changing the story. </p>
<p>Clubs NSW <a href="https://twitter.com/political_alert/status/651328584045342720">“unequivocally rejected”</a> Garrett’s earlier claims.</p>
<p>Perhaps a little less remarkable, but worth some attention nonetheless, are the <a href="http://www.theage.com.au/national/investigations/political-donations-second-pokie-lobby-tips-45000-into-kevin-andrewslinked-fund-20150727-gillfi.html">significant amounts</a> that club and pub interests donated to a fundraising body linked to Liberal MP Kevin Andrews.</p>
<p>When he was in opposition, Andrews was responsible for developing Liberal Party policy on gambling. He put that policy into practice when he became minister for social services, dismantling the Gillard government’s already watered-down poker machine reforms. Andrews’ policy was announced in a video introduced by Clubs Australia and Clubs NSW CEO Anthony Ball. </p>
<p>Despite the apparent strangeness of donating to an organisation supporting the re-election of a Victorian-based MP, a Clubs NSW spokesperson said the donations were for “no particular purpose”. There is no suggestion that the donations directly influenced Andrews’ decision-making. But the Abbott government, in enacting its policy, abandoned gambling reform.</p>
<h2>The lobby’s profound influence</h2>
<p>Many people are concerned about the relentless promotion of sports betting. We’ll find out soon enough if this generates a new cohort of people harmed by gambling.</p>
<p>At the moment, however, <a href="http://www.pc.gov.au/inquiries/completed/gambling-2009/report#contents">80%</a> of the gambling harm in Australia, and A$11 billion out of a gambling total of more than $20 billion, <a href="http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/aus-gambling-stats-30th-edn-summary-tables-2012-13.pdf">comes via poker machines</a> in clubs and pubs. Sports betting, in contrast, is worth about $500 million a year.</p>
<p>There are about 200,000 poker machines in Australia. Half are in NSW. In 2012-13, people lost $5.2 billion on NSW machines. In 2014-15, Victorians lost <a href="http://www.vcglr.vic.gov.au/home/resources/data+and+research/data/">$2.6 billion</a> and Queenslanders <a href="https://secure.olgr.qld.gov.au/dcm/Gaming">$2.2 billion</a>. </p>
<p>Prior to the last two NSW state elections, the Liberal Party signed memorandums of understanding <a href="http://www.smh.com.au/comment/poker-machine-lobby-signs-another-private-deal-with-nsw-liberals-20141017-117sqy.html">with the clubs</a>. The clubs thus support the Liberals, and the NSW government seems keen to help them out. In July 2015, this took the form of permitting the cash payout of up to $5,000 in winnings. Previously this was limited to $2,000. More than this and the money was paid by cheque. </p>
<p>The limit for deposits on gambling load-up cards was also upped, from $200 to $5,000. The clubs say this is for convenience of their members. Of course, this has nothing to do with making it more likely that any winnings end up back in the clubs’ pokies.</p>
<p>In Queensland, under the guise of <a href="http://www.anglicanchurchsq.org.au/images/Anglican_Church_SQ_Gambling_Red_Tape_Reduction_Report_FINAL_08Jan15_rebadged.pdf">“red tape reduction”</a>, the now-ousted Newman government agreed to a batch of “reforms” to make life easier for club pokie operators. The new ALP government says it wants to wind back these “reforms”. Unfortunately, it has inherited a swarm of new casinos, with a second Brisbane casino approved, an additional casino on the Gold Coast being developed and a mega-casino <a href="https://theconversation.com/this-time-is-different-the-local-costs-of-cairns-new-casino-30253">proposed</a> for Cairns. </p>
<p>Other towns – or, more correctly, developers – are clamouring for casinos too. </p>
<p>In Victoria, the Labor government recently announced a <a href="http://www.justice.vic.gov.au/home/safer+communities/gambling/gaming+machine+arrangements+review">review</a> of poker machine entitlements. There are 30,000 poker machines in Victoria – about 27,000 in pubs and clubs and the balance in the casino. The internal review was announced late on a Friday night, so confidence that it will actually address the harms of gambling is low. There’s no commitment to publication of the review’s report. </p>
<p>Prior to the Victorian state election in 2014, pubs and clubs lobbied the state for the conversion of their 10-year entitlements to licences in perpetuity, as in NSW. That effort died with the election, but they haven’t given up. The government could expect a windfall of revenue from the conversion of entitlements to licences in perpetuity, and even more if it allowed more pokies into the state. As Paul Keating famously remarked:</p>
<blockquote>
<p>Never get between a premier and bucket of money.</p>
</blockquote>
<p>The harm done to people is, it seems, incidental to the $5 billion that <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5506.02013-14?OpenDocument">flows into state treasuries</a> from gambling. Of this, 60% comes from poker machines.</p>
<p>Pokies are essentially <a href="http://press.princeton.edu/titles/9156.html">addiction machines</a> – computers housed in a retro box that combines a host of psychological tricks. Their sole purpose is to extract as much money as possible. By stimulating the production of neuro-chemicals, pokies do exactly what drugs do – give the user a pain-dulling reward. </p>
<p>The problem is, most people realise that heroin and ice are dangerous and addictive. When it comes to gambling, state governments give pokies the seal of approval, and the local pub or club is the dealer. Even worse, we know that pokies are cynically <a href="http://www.tandfonline.com/doi/abs/10.3109/16066359.2012.727507#.VhRAYI-qqko">concentrated in disadvantaged communities</a>.</p>
<p>State governments are legislators, regulators and beneficiaries of gambling. They are addicted to the revenue, and deeply conflicted as to their role. Even more troubling is that since 2008-09 poker machine operators have <a href="http://periodicdisclosures.aec.gov.au/">given</a> more than $6 million in donations to the ALP and the Liberal Party. Most of this has gone to the Liberals – more than $4 million.</p>
<h2>Is this a problem?</h2>
<p>Gambling operators exist because governments license them. They are, in many ways, the ultimate rent-seekers. Without government imprimatur, they have no revenue stream. </p>
<p>Should such businesses be permitted to donate to politicians or political parties? And should they be permitted to influence government, legislation and regulation as powerfully as they do? The gambling industry’s campaign against the Gillard government’s reforms was <a href="http://insidestory.org.au/the-lobby-group-that-got-much-more-bang-for-its-buck/">extraordinary</a>.</p>
<p>This is a lobby that knows how to wield power and does it with great expertise, backed by significant resources. As recent events in the US have shown, organisations like the National Rifle Association are <a href="http://www.theguardian.com/commentisfree/2015/oct/05/spare-me-this-sanctimonious-australian-self-congratulation-after-us-gun-massacres">entrenched in US politics</a>, almost certainly to the detriment of good policy and the public interest. Australia’s gambling lobby may well be in the same league.</p>
<p>Disclosure of political donations in Australia is poor – perhaps as bad as the rules governing politicians’ travel entitlements. Rorting the latter seems to be a bipartisan sport. Giving gambling operators what they want in return for donations, and in fear of their enmity, may well be another.</p><img src="https://counter.theconversation.com/content/48728/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Livingstone has received funding from Victorian and South Australian governments (the funds for which were derived from hypothecation of government revenue to research purposes), from the Australian and New Zealand School of Government, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Centre, the Finnish Institute for Public Health, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He is a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010-11. He is a member of the Australian Greens. He was interviewed for the forthcoming ABC documentary 'KaChing!', and provided some technical advice to its producers.</span></em></p>The gambling industry knows how to wield power, and does it with great expertise, backed by significant resources.Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.