Fact Sheet regarding Problem Gambling and Poker Machine Reform
Because of independent federal MP, Andrew Wilkie’s agreement on ‘compulsory pre-commitment’ with the Gillard ALP Government, we have a unique opportunity in Australia to see reforms surrounding poker machines aimed at reducing the impact of problem gambling in Australia.
This window of opportunity (with ‘No Pokies’ Senator, Nick Xenophon, also sharing the balance of power in the federal Senate) is unlikely to open again, so now is the time for concerned Christians and other citizens to act, by urging state and federal politicians to support harm minimization measures.
Here is my fact sheet to aid your understanding of the issue. Almost all the statistics are drawn from the Productivity Commission’s (hereafter PC) latest report on the issue. It largely takes an economic approach to such issues and tends to be neutral on the morality of particular activities, such as gambling.
However the PC’s recommendations are being vigorously opposed by Clubs NSW (representing registered clubs) and the AHA (Australian Hotels Association), both of which profit enormously from poker machine usage in their venues, and both of which are among the largest donors to political parties.
Prevalence
Often Clubs NSW and the AHA claim problem gamblers only form a small percentage of our community, less than 1%. Here’s what the PC says on
A. Estimates of the number of problem gamblers annually lie in a range around 115,000 (0.7% adult population).
B. Estimates of the number of number of gamblers at ‘moderate risk’ lie in a range around 280,000 (1.7% adult population). The PC says people…
“at moderate risk are also relevant for public policy — just as in relation to alcohol use or obesity — in that they still experience harm and some may progress to more serious problems”
C. The numbers of people who have ever experienced problems with their gambling — so called ‘lifetime’ prevalence — are considerably higher than annual prevalence estimates.
D. Adult prevalence figures can be highly misleading. Some segments of the industry have suggested that current adult prevalence rates (0.7 % and 1.7 % for problem and moderate risk gambling respectively) looks small and so the social policy significance of such problems is also small. However, the PC says,
“to put these figures in context, only around 0.15 % of the population are admitted to hospital each year for traffic accidents and around 0.2 % of the population are estimated to have used heroin in the preceding year. Small population prevalence rates do not mean small problems for society.”
Is Prevalence Falling as Clubs and Pubs claim?
E. Yes. The PC agrees that it is likely that problem gambling prevalence rates have fallen among the adult population over the past decade — a positive outcome for Australians.
F. This is because over all gambling rates have also fallen. But reduced adult prevalence rates of problem gambling is a misleading indicator of the risks, in the same way that the lower prevalence of lung cancer in the population does not attest to safer cigarettes, but to reduced smoking rates.
G. Among those who gamble, the story is different. The PC says there is no evidence that the share of poker machine spending accounted for by problem gamblers has fallen. In the most reliable series of surveys, there has not been any significant decline in problem gambling rates among those most exposed to risks (weekly players of gaming machines).
H. The PC says policy should focus on risks for regular players of less safe gambling forms.
Focus on EGMs (i.e. Electronic Gaming Machines, a.k.a. “the pokies”
I. Gambling policy interest needs to centre on people playing regularly on riskier forms of gambling, especially electronic gaming machines — where most harms arise. The possibilities of rapid, repeated and high intensity play on the pokies is part of why this form of gambling is so much more potentially unsafe.
J. The risks of problem gambling increase significantly with the frequency of playing EGMs. The PC estimates that among those who play weekly or more on gaming machines, around 15 % are problem gamblers, with an additional 15 % at ‘moderate risk’.
K. People playing EGMs account for around 75–80 % of ‘problem gamblers’ overall.
L. Regular gaming machine players (those playing at least once a week) are estimated to spend on average around $7000–8000 per annum, a sizeable share of household incomes, and a key source of harm to some.
What about the benefits that Clubs supply?
Clubs employ staff, provide amenities for members and provide support for community organisations.
M. The PC agrees these social contributions by clubs are highly valued by many, but it also notes these contributions tend to be narrowly focused on sports activities and on subsidised benefits for their own club members. The value of donations to the broader community is a small share of the profits the clubs’ receive from poker machine takings (often less than 10% of profits).
N. The PC also notes that people employed by the gambling industry have skills that are highly valued in the service sector as a whole, and they primarily work in large population centres, where there are many other employment options. It also notes more broadly that as one industry contracts, another typically expands.
What damage is caused by the pokies?
The impact of problem gambling hits far more people than the vague figure of less than one percent prevalence that the clubs and pubs trumpet!
Each problem gambler impacts terribly on his or her family, and other close relationships. This is where many Anglican ministers see the damage. I can say from first hand observation, it is heart-rending.
The PC says (p16 Overview):
The harms from problem gambling include suicide, depression, relationship breakdown, lowered work productivity, job loss, bankruptcy and crime. For example, a 2008 survey found that gambling was the most common motivation for fraud and that the average loss was $1.1 million per incident. Moreover, the rough counts of people directly affected ignores the ‘ripple effects’ of problem gambling. For each problem gambler, several others are affected — including family members, friends, employers and colleagues. A recent Tasmanian survey found that 50 per cent of people said they personally knew someone who was experiencing serious problems with gambling and around 13 per cent of people identified at least one family member with a serious problem.
While it is hard to quantify some aspects of these harms, such as suicide, the evidence suggests costs equivalent to many thousands of dollars per person affected. When these costs are accumulated across people with significant problems, they amount to some $4.7 billion annually using conservative estimates.
Conclusion: What should be done?
The Productivity Commission’s recommendations focus on measures to reduce harm from EGMs/pokies in pubs and clubs, although they also recommend other measures to do with the advertising of gambling and internet gambling.
Poker machine regulation is also the area that the NSW Government can address most directly (unlike online matters or advertising standards, which are primarily federal issues).
Here are some key recommendations from the PC, suggesting that federal and state/territory governments should work together):
- introduce full compulsory pre-commitment system into EGMs? (PC Rec. 10.4)
- reduce bet limit on all EGMs to $1? (PC Rec. 11.1)
- restrict amount of credit that can be fed into EGM at any time to a maximum of $20? (PC Rec. 11.2)
- locate ATMs/EFTPOS facilities in gaming venues away from gaming areas with clearly visible warnings and with a maximum cash withdrawal limit of $250/day. (PC Rec. 13.2)
- introduce a shut down period for gaming machines in all pubs and clubs commencing no later than 2am and being at least for 6 hours duration (PC Rec. 14.1).
Why not write to your local federal and state parliamentarians to ask them to support the PC’s recommendations, and especially to implement compulsory pre-commitment.
Do not be fooled by the Clubs offer to introduce voluntary pre-commitment. We need every user of the pokies to be asked to nominate a maximum per-day amount they are willing to lose, in advance. Voluntary pre-commitment will be too easy for problem gamblers to get around. It would be a bit like asking people at risk of drink driving to voluntarily set an alcohol level limit to abide by.
Sandy Grant
Senior Minister,
St Michael’s Anglican Cathedral
Wollongong
P.S. Figures and statements quoted in this fact sheet can all be footnoted to the Productivity Commission’s 2010 report on Gambling, and are cited in context, if you wish to check for accuracy.
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I found these facts helpful in composing my recent letter to the editor at the Illawarra Mercury.