Buyer beware. Mike Coghlan

Eight lessons about betting machines from the world’s gambling capital

The Cameron government’s reported willingness to curb some of the excesses of electronic casino games in betting shops (fixed odds betting terminals) is to be welcomed. Yet without far-reaching reforms, the future of gambling in Great Britain looks decidedly Australian. And this is no good thing.

Australia has been dubbed the gambling capital of the world. The poker machine – a high-stakes, high-intensity version of the Vegas-style slot machine – has become ubiquitous in pubs and community clubs in every state and territory except in Western Australia.

In 2012, the national ratio was one poker machine for every 89 Australian adults, for a total of just under 200,000 machines nationally. Such saturation makes the 33,200 betting terminals in Great Britain look puny in comparison, with a national average of 1,400 adults per machine.

According to industry analysts, Australians lose more money gambling per person than any other nation. In 2011-12 this amounted to the equivalent of more than £650 per adult, a figure that dwarfs the £130 per adult lost in Great Britain in 2012-13.

Yet while poker-machine gambling losses have plateaued in Australia in recent years, the amount of money lost on fixed odds betting machines is just taking off in the UK. Since 2008-09, annual player losses have grown from £1.05bn to £1.55bn, with the machines now accounting for half of bookmakers’ gross profits.

While the British enjoy beating Australians at just about anything, taking the title of “the world’s biggest loser” would be no happy victory. To avoid it, the following lessons from the Australian experience would be well heeded.

1. Prevention is better than cure. Harm minimisation measures should prioritise the prevention of problem gambling rather than trying to rebuild already shattered lives. A fence at the top of the cliff is better than an ambulance at the bottom.

2. Limit the size and speed of bets. The faster bets can be made, and the larger the maximum bet size, the faster money can be lost. Maximum bets on fixed odds betting termainals should be reduced from £100 to £2, in line with other gambling machines in Britain.

3. Reduce and cap the number of machines. In Australia and New Zealand, the number of high-intensity poker machines is directly proportionate to the number of problem gamblers. Each poker machine in Australia and New Zealand is estimated to be associated with 0.8 people with gambling problems. Even prominent gambling industry players agree that capping machine numbers has halted industry growth.

4. Limit machines in poor communities. As in Britain, high-intensity gambling machines in Australia suck money out of the poorest communities. While the gambling industry still dispute this in the UK, in Australia publicly released administrative data makes this fact irrefutable.

For example, the local government area of Fairfield, Sydney is among the poorest 12% in Australia. In Fairfield in 2010-11, there was one poker machine for each 42 adults and each adult resident lost an average of £1,307. Across the harbour in Ku-ring-gai and Willoughby, whose residents are among the richest 6% in Australia, there was just one poker machine per 231 adults and losses were just £151 per adult.

5. Keep limits on the number of machines per shop. In Australia, even when machine caps have been operating at the state or regional level, large gambling venues have been able to use their market power to purchase huge numbers of machines. There is good evidence to suggest that gambling machines in large venues are more dangerous than the same machines in smaller venues.

6. Reduce the accessibility of gambling venues. Gambling venues are more dangerous when they are highly accessible, located close to home or workplaces. Studies in Australia, New Zealand and the United States have all shown that proximity to gambling venues increases the risk of experiencing gambling harm.

In Western Australia, where all poker machines are confined to a single Vegas-styled casino, the rate of problem gambling was around one-third of the national average in the last national survey.

7. Limit technological innovation. Machine manufacturers are always seeking ways to make their machines more profitable and the most reliable method to increase revenue is to make them more addictive.

In the case of poker machines, large jackpots and the ability to make multiple small bets simultaneously (which tricks gamblers’ brains into thinking they are winning even when they are losing) make poker machines much more addictive. Industry-driven “innovations” in gambling machine design always make them more profitable and therefore more harmful.

8. Act now. When gambling industries accumulate profits, they also accumulate political power. In Australia, the gambling industries are now so powerful they can sabotage national reform agendas and acquire some of the most valuable public land in the country for a new casino, unsolicited and without a tender process or casino license.

According to a former leader of Australia’s conservative Liberal Party, the gambling industry’s clout erodes democracy. The longer the current regime of regulations in Britain is left in place, the more powerful they will become and the more difficult it will be to achieve meaningful reform.

The British government has a once-in-a-generation opportunity to remove dangerous gambling machines from high streets across the nation. The chance to do this may not come again. Continued liberalisation of gambling regulations will no doubt lead to Great Britain joining Australia as one of the world’s biggest losers, with all of the broken lives and further impoverishment of already deprived communities this would entail.