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The first time I went to pokies I was there for about ten minutes before I won 50 bucks, which was good because I was starting to get really bored. I took my $50 and went dancing off to the bar yelling about margaritas for everyone. That was the last time I had anything to do with pokies until 10 years later, when one of my closest friends arrived on my doorstep to tell me that he had just been fired from his job as a bank teller because he had been stealing money. From me, among others.
Fast forward another 10 years and in any group of people I have asked over two months of researching this article everyone knows someone who has, or has had, a problem with poker machines. From the professional woman in her 40s who realised after half a dozen times that she was starting to get out of control and stopped immediately, to the woman who broke down in tears as she told me that her brother had been slowly starving himself because he couldn’t keep enough money back from the pokies to buy himself food, to the woman who lost all her friends, her family her house and finally took her own life because of an addiction she could not control. Everyone knows someone who’s been somewhere on that bell curve, and when you start poking around the dark corners of the gambling industry the scale of the problem is truly horrifying.
Poker machine revenue in the 2007/8 financial year was about 2.7 billion dollars. Sounds like a lot, right? It is, but it’s just the tip of the iceberg. That figure is only for the 27,000 poker machines in Victoria and does not include the 2,500 machines at Crown Casino, which rakes in about another 375 million per year. Across the whole of Australia the total poker machine revenue is somewhere around 11 billion dollars per year. Current regulations say that the machines have to return around 87% to the player, so to produce 11 billion in revenue Australians had to put nearly 85 billions dollars into the pokies in just 12 months. Now that really is a lot of money, you could buy and renovate a couple of decent sized African nations for $85 billion.
However, let’s keep it local. Looking at the money lost on pokies, two questions immediately come to mind: where is that 11 billion coming from and where is it going to? Obviously the money is coming from ‘the punters’, but are they really all happy social people just having a little fun, as Tatts, Tabcorp and the state governments would have us believe, or are they all the desperate addicts, reduced to a life of poverty and crime that the antis rail endless about?
It’s hard to get a firm grip on the actual numbers of people who have a problem with the pokies, first of all you’ve got to work out what a ‘problem gambler’ is, then you’ve got to find out how much money they are losing. Most problem gamblers hide the amount and frequency of their gambling from themselves, as well as everyone else, so they’re unlikely to fill in a questionnaire accurately. Thus, everything that is ‘known’ about it is really only a guess. However, the most reliable and detailed research I could find estimated that about 50% of that $11B comes from problem gamblers (people who are unable to stop gambling even when they want to) and about another 40% comes from regular or ‘at risk’ gamblers (people who gamble a significant portion of their income and go at least once a week). Put those figures together and you come up with somewhere around 600,000 problem gamblers in Australia, around 3% of the population. Of course, those people are not alone in their problem; they’ve got wives, husbands, children, parents, friends, colleagues and family who suffer along with them. Again, we’re going on rough estimates here, but each problem gambler will adversely affect the lives of around 5 to 10 people each, that’s somewhere between 3 and 6 million people in Australia damaged by poker machines, 15 to 30% of the country. That’s also a lot. It sounds a little unrealistic, but 21% of the world’s poker machines are in Australia, more than 5 times the number in the whole of the United States, and we have about .03% of the world’s population, so it makes sense that we suffer a disproportionate amount of damage from them.
One last little nasty statistic about poker machines. Australia has about 100,000 homeless people - enough to fill the MCG - and (again a rough estimate) around 20% of homelessness is due to gambling on poker machines, so, to put it in perspective, we could fill the Great Southern Stand with people who have been made homeless by pokies. Wouldn’t that make a great photo opp for Brumby et al?
Which brings us to the second question: where is the money going to?
About half of the gambling revenues go directly to state governments, about a third to the owners of the machines (Tatts, Tabcorp etc) and the rest to the pubs and clubs that house them. This is where we get all the rationalisations for allowing the pokies to continue. We’ve all heard the argument that state governments and pubs are dependent on gambling revenues and that if you took this revenue away from them they’d all go broke. It sums up everything that is most repellent about politicians that they can make these claims and expect people to believe them. If you turned all pokies to dust overnight what would happen to that $11B? It doesn’t just vanish; it’s still out there, floating around the economy, getting itself into trouble. That $11 billion is all in the form of personal earnings, so if you don’t put it into pokies the main areas it’s going to end up is discretionary spending (shoes, holidays, restaurants, bars, art galleries, chocolate bars, piercings and football memberships), property (rent or mortgage repayments), entrepreneurial activities (starting or growing a new business) or savings. So if you took that money away from pokies it doesn’t mean that the government loses all that revenue, they just get it in another form: GST, land tax, dog registration, payroll tax, stamp duty and the like.
Another factor to consider is what the money does in the economy. The employment multiplier effect from gambling is about three jobs per $1 million, ie, every million dollars earned by pokies creates 3 jobs. The employment multiplier effects from restaurants and catering businesses is about 20 jobs per $1 million. So if you took $11B out of gambling and put it back into discretionary spending you would create about 187,000 jobs. That’s a good portion of the unemployment problem sorted.
So, what is the solution? Should we become a nanny state and ban gambling all together? As a committed supporter of the Capitalist Man I would have to say no, that doesn’t work, prohibition of anything that people like to do to their own detriment has proven over and over again to create more problems than it solves. Alcohol, drugs, cigarettes, prostitution and gambling are never ever going to go away, but we’ve managed to get a fairly sensible solution to some of them. If you want to go to a prostitute you can, as far as possible the government will ensure that she will be over 18, healthy, not supporting a drug addiction, and able to insist that you wear a condom. She will pay her taxes, earn superannuation and have access to doctors and police care if she needs it. Most importantly, she will not have been forced into servicing you unwillingly. There may well be some exceptions to this, but they are all the more visible because they are the exceptions and enforcing the protections around the industry is that much easier because it is not driven underground. The same applies to cigarettes, and should apply to alcohol and drugs (although those ones need some work) but at the moment the gambling industry is running unrestrained by any common sense protections. It’s legalised without limitation and that’s what makes it so dangerous. The people who make profit from gambling have no restraint on the things they do to take advantage of the weak and vulnerable, so they employ psychologists to determine the best ways of maintaining the gamblers’ interest, spin rates, wins and jackpots are minutely calculated to maximise profits and create addictions. Poker machines are concentrated in low income areas, stacked with ATMS, advertised with big neon signs and supplied with indoor play areas to park your kids while you gamble without pause for days if you want to.
Sensible restriction like removing ATMs from pokie venues, restricting the amount and duration of each gambling session, removing the note accepters, limiting the number of machines in each locality and regulating the spin rates would go a long way to reducing the problem effects of poker machines without affecting those people who truly do just play the pokies for light entertainment.
The only arguments I have been able to find against these common sense restrictions is that it would reduce the amount of money state governments get from pokies and that this would cause them some heartache. Typical bloody politician short sighted venal bullshit.
Still, rock on Nick Xenophon and the greens, maybe you’ll get somewhere if enough of the general public shout loudly and pollies are forced to look like they’re listening or risk lose their seats.
Ahh, democracy, you’ve got to love it don’t you?
References
Queenslanders put $327 million into pokies machines in August and September, Victorians lose 2.7 billion dollars a year on pokies and it’s increasing every year.
http://www.abc.net.au/worldtoday/content/2008/s2151058.htm
http://www.news.com.au/couriermail/story/0,23739,24585813-23272,00.html
$1 billion-a-year government revenue, the $500-million-a-year earnings of Tabcorp and Tatts and the $2.5 billion losses of the players.
Australia has 21 per cent of the world's poker machines, NSW has 10 % Australia had roughly five times as many gaming machines as the United States.
$11 billion per year Australia wide.
http://www.abc.net.au/7.30/stories/s37514.htm
By law, Victorian poker machine venues and the casino must return to players at least 87 per cent of the total amount that is bet each year.
Tax on pubs and clubs in NSW is between 35 and 50% of gaming revenue, depending on the tax band the venue falls into
Reinforcement schedule, spin rates or length of game cycle and jackpots designed specifically to promote addictive gambling.
http://www.aph.gov.au/Senate/committee/clac_ctte/poker_machine_harm_reduct/report/d02.htm
Somewhere between 15 and 20 per cent of the homeless population is there because of a gambling addiction.
http://www.abc.net.au/worldtoday/content/2008/s2148892.htm
There are over 100,000 people homeless in Australia
Problem gamblers contribute about 50% (Dr Charles Livingston) of the gambling revenue. Regular gamblers contribute about 90% (Professor Linda Hancock)
Both advocates told the committee the practice of locating poker machines in targeted low income areas was also entrenched.
http://www.news.com.au/story/0,23599,24329919-29277,00.html
He said it recently announced a complete ban on ATMs in gaming venues from 2012, and made a 2006 funding announcement of $132million to reduce problem gambling over five years.
http://monash.yourguide.com.au/news/local/news/general/strategy-fails-gamblers/1320410.aspx
In summary, Tattersall’s and Tabcorp argue that the combination of the duopoly and the capacity of the CCMS to generate rich data results in an unrivalled capacity to maximise revenue. In simple terms, the duopoly arrangements result in EGM consumers being relieved of their funds far more efficiently in Victoria than in any other Australian jurisdiction. Data quoted by the duopoly operators supports that view, such that on a per EGM basis Victoria is unrivalled. For example, average net player losses per EGM in Victoria was $84,437 in 2003-04, compared to an Australian average of $50,897. The average NPL for NSW was $47,132, for South Australia $48,895 and for Queensland $39,185 (Australian Gambling Statistics 2005).
Of course, there are many reasons for the apparently super-performance of Victorian EGMs, including the capacity of the duopoly system to ‘intensify’ EGM consumption, the greater density of EGMs in some other jurisdictions, and the effectiveness of the configuration of EGMs in Victoria.
http://www.parliament.vic.gov.au/council/gaminglicensing/Submissions/GL10.pdf
Victoria average is 10 pokies for each 1000 people.
http://www.gamblershelp.org/?p=101
What we know from studies done by the South Australian Centre for Economic Studies last year is that the employment multiplier effects from gambling is about three jobs per $1 million. The employment multiplier effects from restaurants and catering businesses is about 20 jobs per $1 million.
http://www.abc.net.au/stateline/vic/content/2006/s1908525.htm
That research shows the number of at-risk gamblers who visit a gaming venue more than once a week has shot up from 28 per cent to 48 per cent in the past year.
http://www.abc.net.au/pm/content/2008/s2416859.htm
The latest figures on pokies losses were posted online, a day after a Senate committee rejected three proposed Bills designed to help reduce problem gambling, by restricting gamblers' access to ATMs, banning banknote acceptors on gaming machines and limiting bets and payouts.
In a majority report, Labor senators said the Bills should wait for a new Productivity Commission report on the issue, due by the end of next year.
http://www.news.com.au/couriermail/story/0,23739,24637575-952,00.html
In round terms, each of Crown Casino's 2500 machines generate profits of about $150,000 a year, and each of the 27,500 machines owned and controlled by Tabcorp and Tattersalls generate just over $60,000 a year in club venues and $110,000 a year in pubs.
http://www.theage.com.au/articles/2003/06/08/1055010873049.html
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