Gambling

Key points

These key points were released with the Gambling inquiry report on 23 June 2010.

  • The rapid growth following liberalisation of gambling in the 1990s has given way to more 'mature' industry growth.
    • Total recorded expenditure (losses) in Australia reached just over $19 billion in 2008-09, or an average of $1500 per adult who gambled.
  • Gambling is an enjoyable pursuit for many Australians. As much as possible, policy should aim to preserve the benefits, while targeting measures at gamblers facing significant risks or harm.
  • While precision is impossible, various state surveys suggest that the number of Australians categorised as 'problem gamblers' ranges around 115 000, with people categorised as at 'moderate risk' ranging around 280 000.
  • It is common to report prevalence as a proportion of the adult population, but this can be misleading for policy purposes, given that most people do not gamble regularly or on gambling forms that present significant difficulties.
  • The risks of problem gambling are low for people who only play lotteries and scratchies, but rise steeply with the frequency of gambling on table games, wagering and, especially, gaming machines.
  • Most policy interest centres on people playing regularly on the 'pokies'. Around 600 000 Australians (4 per cent of the adult population) play at least weekly.
    • While survey results vary, around 15 per cent of these regular players (95 000) are 'problem gamblers'. And their share of total spending on machines is estimated to range around 40 per cent.
  • The significant social cost of problem gambling — estimated to be at least $4.7 billion a year — means that even policy measures with modest efficacy in reducing harm will often be worthwhile.
  • Over the last decade, state and territory governments have put in place an array of regulations and other measures intended to reduce harm to gamblers.
    • Some have been helpful, but some have had little effect, and some have imposed unnecessary burdens on the industry.
  • A more coherent and effective policy approach is needed, with targeted policies that can effectively address the high rate of problems experienced by those playing gaming machines regularly.
  • Recreational gamblers typically play at low intensity. But if machines are played at high intensity, it is easy to lose $1500 or more in an hour.
    • The amount of cash that players can feed into machines at any one time should be limited to $20 (currently up to $10 000).
    • There are strong grounds to lower the bet limit to around $1 per 'button push', instead of the current $5-10. Accounting for adjustment costs and technology, this can be fully implemented within six years.
  • Shutdown periods for gaming in hotels and clubs are too brief and mostly occur at the wrong times. They should commence earlier and be of longer duration.
  • There should be a progressive move over the next six years to full 'pre-commitment' systems that allow players to set binding limits on their losses.
    • Under a full system, there would be 'safe' default settings, with players able to choose other limits (including no limit).
    • In the interim, a partial system with non-binding limits would still yield benefits, and provide lessons for implementing full pre-commitment.
  • Better warnings and other information in venues would help. But school-based information programs could be having perverse effects and should not be extended without review.
  • Relocating ATMs away from gaming floors and imposing a $250 daily cash withdrawal limit in gaming venues would help some gamblers. But the net benefits of removing ATMs entirely from venues are uncertain.
  • Effective harm minimisation measures for gaming machines will inevitably reduce industry revenue, since problem gamblers lose so much. However, this would not occur overnight and the reductions may be offset by other market developments.
  • Problem gambling counselling services have worked well overall. But there is a need for enhanced training and better service coordination.
  • Online gaming by Australians appears to have grown rapidly despite the illegality of domestic supply. Gamblers seeking the benefits it offers are exposed to additional risks and harms from offshore sites that could be avoided under carefully regulated domestic provision.
    • Liberalising the domestic supply of online poker card games, accompanied by appropriate harm minimisation measures, would test whether managed liberalisation should be extended to all online gaming forms.
  • Recently enacted race fields legislation has been the main way jurisdictions have addressed the dual reform challenges of preventing free-riding by wagering operators and facilitating a competitively neutral wagering industry.
    • Should the race fields legislation be unsuccessful in either respect over the next three years, a national funding model should be established, based on federal legislation and with an independent price-setting body.
  • The arguments for retaining the exclusive right by the TABs to provide off-course retail wagering products are not compelling.
  • Governments have improved their policy-making and regulations with respect to gambling, but significant governance flaws remain in most jurisdictions, including insufficient transparency, regulatory independence and coordination.
    • There is a particular need to improve arrangements for national research.
Background information
Ralph Lattimore  (Assistant Commissioner) 02 6240 3242