Gambling

Since their introduction into South Australian pubs and clubs in 1994, electronic gaming machines (EGM or poker machines) have driven an exponential increase in gambling losses in SA - and with it enormous social and economic harm.

SA-BEST has been the most outspoken and active political party in South Australia in trying to rein in the negative impacts and damage poker machines - and gambling more generally - have on ordinary South Australians.

SA-BEST has - and always will - advocate strongly for a clear pathway of practical reforms to transition the SA Government - and the hotel barons - from their gaming machine dependence.

We want to see a substantial reduction in the number of gaming machines as well as measures that greatly reduce harm to the community, families, and individuals. 

The issue of gaming machine reform will continue to be a priority issue for SA-BEST in the new Parliament.

Gaming machines, casino games, betting and online gambling have unleashed an enormous amount of individual, family, and community misery.

In response, successive governments have failed to provide responsible and effective regulation to protect the community.

Political Influence of the gambling lobby

The gambling industry in SA and the poker machine owners - the state's wealthy poker machine barons – through its collective organisation, the Australian Hotels Association, have a disproportionate economic and political influence, with both Labor and Liberals falling over each other to keep them happy while freely accepting their political donations and support.

 As a former Federal politician observed: “even at the highest level, Australia’s major parties were running a protection racket for the gambling industry”. 

Over the past 22 years, the AHA has spent more in South Australia ($1.76m) than in NSW ($1.42m) despite NSW having nearly three times the number of licensed premises.

At the 2018 election, the AHA’s appalling saturation advertising campaign attacking Nick Xenophon and SA-BEST virtually handed the election result to Steven Marshall’s Liberal Government.

Its greedy reward by the Liberals (and Labor for that matter after it supported the legislation) was the introduction of note acceptors - regarded by experts as the single most damaging technology when it comes to the harm caused by poker machines - introduced off the back of a cozy deal done between the two major parties and the poker machine lobby.   

The corrosive impact of the gambling lobby on the democratic politics of our state should not be underestimated.

Make no mistake - these measures will significantly decrease the harm caused by these insidious machines. They will lead to more people destroying their lives and those of their loved ones.

SA-BEST will continue to push for greater transparency and disclosure on political donations to South Australian registered parties from the gambling industry.

SA-BEST will champion a complete ban on all political donations from the gambling industry and its associated industries/entities to all South Australian registered parties. And we will push for the commencement of the committee of inquiry into online gambling that was promised but never delivered by the major parties!

The electronic gaming machine problem in a nutshell

SA has a proliferation of electronic gaming machines in hotels and clubs – approximately 12,964 machines operating in almost 500 venues. This figure is down from a 2001/2002 high of over 15,430 machines.  It is well documented accessibility to electronic gaming machines is a key factor in gambling harm, and it is clear these machines are by far the greatest revenue raisers of all gambling forms - for the operators and the Government.

Since they were introduced, more than $12 billion has been spent by patrons on poker machines. That is a staggering figure!

Government revenue from EGMs since 2001/2002 to 2018/2019 is an obscene $5.8 billion dollars.  

For every dollar of net gaming revenue, 40 cents goes direct to the State Government and 9.5 cents goes in GST which ends up with the State Government.

The only thing certain about electronic gaming is that patrons cannot win.

Research by the Productivity Commission and two landmark research reports indicate about 40 per cent of gaming machine losses come from those people who experience severe gambling harm and who can least afford to lose money.

The Productivity Commission has found that for every ‘problem gambler’ there are an average of seven other people adversely affected. 

That’s a huge social impact.

Gaming machine addiction drives up levels of crime, homelessness, poverty, depression, and other serious mental health problems. Most of the gambling related fraud was due to gaming machines. Gaming machine fraud generates crime amongst many otherwise non-offending citizens.

Whatever the government makes in gaming machine revenue in the short term, it just isn’t worth it, especially in the long term.

And the economic impact can’t be understated. On average over the last 20 years over $700 million has been lost each year on electronic gaming machines in hotels and clubs in South Australia alone (2001/2002- 20018/2019 ); that’s money that’s diverted away – not just from the individuals who have lost their money and their families – but it also deprives retailers, supermarkets and other small businesses of valuable revenue.

A study by Adelaide University’s SA Centre for Economic Studies found that for every million dollars spent on gaming machines, only three jobs were created, compared to more than double that for one million spent on retail and double again for jobs created in hospitality, cafes, fast food, and restaurants.

For every $100 million not spent on gaming machines but spent on retail goods there would be 300 to 350 additional jobs in retail and more than double this in hospitality, cafes, restaurants and other small business.

Recent Reforms

SA-BEST has strongly pressed for reform of the gambling industry in South Australia, particularly regarding gaming machines.

However, on 3 December 2020, seriously detrimental gambling reforms came into effect in South Australia after the Liberal Government and Labor Opposition colluded to ensure their successful introduction. There was no meaningful debate - it was a done deal between the major parties. As a result, bank note acceptors and Ticket-In-Ticket out technology was allowed on gaming machines in licensed gaming venues.

Machines can now accept any note up to $50 and up to $100 can be loaded into any machine. This was a huge step backwards in gambling reform and a huge pay day for the political donations made by the gambling industry to the Liberal party.

A very small consolation SA-BEST managed to achieve, was those venues using a bank note acceptor must have approved facial recognition technology installed in their gaming rooms.

We were also able to limit the daily EFTPOS withdrawal to $200 from EFTPOS machines in gaming venues. We would like to see no EFTPOS machines in gaming venues at all, and if we must  have them, then a much lower limit, especially since there have been plenty of breaches of this rule.

Since late in 2020, when these limited reforms came into effect, there have been more than 2500 detections of potentially barred  patrons. Gaming staff are meant to be “intervening appropriately” but we do not know what this actually means, or if those detection figures are accurate.

The obvious harm that these reforms will cause gamblers was strongly opposed by SA-BEST, but the Government was able to get the Bill passed, albeit with amendments moved by SA-BEST.

Another reform SA-BEST was able to advocate strongly for was the new Community Impact Assessment that applicants for new or transferred gaming licences must complete and comply with to be approved. The applicant must outline how they will  minimise harm from their operation through identifying possible problem gamblers, informing customers and their families and facilitate access to voluntary self-exclusion and formal barring, designing, and locating the gaming area so it does not attract minors, or detract from other areas of enjoyment in the premises and detail the security provisions in gaming areas.

What needs to be done

SA-BEST needs to be ever vigilant and continue its focus on further reform to slash the level of harm.

SA-BEST is calling for:

  • an urgent comprehensive enquiry into the Adelaide Casino mirroring the terms of reference of the recent Royal Commissions held in Victoria and NSW; 
  • banning all political donations from hotels with gaming, gambling operators like casinos, gaming machine manufacturers and gaming industry lobbyists;
  • gaming machine licences to be converted to a seven-year licence only. This would deal with the argument that particularly smaller country hotels would have their loans at risk with any sudden change (although SA-BEST’s concerns, first and foremost, are for those who have been harmed by the machines). Converting machines to a seven-year licence would put the industry on notice not to invest beyond that time, with consideration of licence extensions beyond that seven-year period to be considered by the next Parliament in 2026;
  • an ongoing reduction in the number of gaming machines including;
  • a 10% per annum reduction in the number of machines in hotels in those venues with 10 or more machines, for a period of five years, until a 50% reduction is achieved. This 10% reduction per year will not apply to sporting or recreational clubs, community hotels or the casino;
  • a buyback scheme to be implemented immediately, to include those over 140 venues with 10 or fewer machines, to encourage those venues to become gaming machine free. In addition, any scheme should preference those smaller holders of machines in aggregate terms of up to 120 machines over multiple venues and to those who have entered the industry relatively recently (i.e. venues that haven’t made the huge super-profits of early entrants into the gaming machine sector);
  • establishment of an industry restructuring fund to assist businesses to move away from their reliance on gaming machine revenue to other higher employing industries such as live entertainment, events, music, dancing, performance or other positive social activities;
  • establishment of a jobs fund to support and help transition employees in the industry affected by these changes (including other changes to machine design being proposed). The emphasis will be on transition and support, and acknowledges the less money lost on gaming machines, the more jobs will be created in other sectors;
  • making the machines much less harmful – for all machines in pubs and clubs - by implementing $1 maximum bets per spin and reducing the maximum jackpot to $500. This is broadly in keeping with the Productivity Commission’s key recommendations and, given that 90 per cent of recreational gaming machine players don’t put in more than $1 per spin, will have a negligible impact on most players;
  • a lower jackpot will also mean the machines are less addictive and significantly reduce hourly losses to closer to $120 per hour, compared to $1000 or more per hour that can be lost now. Making the machines ‘con-free’ by removing misleading and addictive features such as near miss and losses disguised as wins. Consumers must be protected from deceptive features and allowed to make fully informed choices with relevant information;
  • removing EFTPOS machines in gaming machine rooms within six months. Easy access to cash is a key driver of increased harm;
  • removing the note accepting function from all gaming machines;
  • reducing the maximum number of trading hours for gaming rooms from 18 to 16 with only one continuous break;
  • enhancing the power of the Independent Gambling Authority to discipline venues (including the casino), that do the wrong thing by strengthening gambling codes of practice, and increased penalties for breaches, increased staffing for monitoring, compliance and enforcement;
  • provide additional funding of $5m per year for community education and gambling help services. Currently only about 10-15% of problem gamblers are seeking help – that is unacceptable and drastically needs to be increased in two years to at least 50%. This would also involve robust and independent monitoring of the levels of gambling addiction in SA as well as the impact of treatment programs in the state;
  • restricting gambling advertising – within 12 months all gambling advertising in SA should be removed from all public advertising spaces outside of the gambling venue itself;
  • an increase in advertising of regulatory gambling warning, and details of where help can be obtained inside and outside of gambling venues. The Government and the Industry should co fund an expanded quit gambling help line with face-to-face counselling and support also being offered in follow up to any initial contact;
  • the South Australian Government to fund ongoing research into all aspects of the industry and an annual report to parliament, incorporating research and advice from across government and independent experts, detailing the economic and social impact of gaming machines, including the results of the progressive implementation of reforms and possible future reforms;
  • the Federal Government should immediately request the Productivity Commission to update its 2010 report into gambling and associated harms, to include a particular focus on casinos, gaming machines and all forms of online gambling, including enticements, sucker bets and other marketing ploys used by online gambling platforms.

Online Gambling

The Reverend Tim Costello over 15 years ago said: “with internet gambling you will soon be able to lose your home without ever leaving it”.

Unfortunately, his prediction has in many ways come to fruition at increasingly alarming levels. While online gambling is seen as primarily a federal government responsibility, there is still much our state government with real political will can, tackle with exponential increase in online gambling. 

With unauthorised, illegal offshore online gambling, the SA Government should facilitate disrupting the access of such sites to SA consumers. The SA Government must also work with federal authorities to take action with other jurisdictions to prosecute alleged illegal gambling operators to protect SA consumers from harm.

We will also call for:

  • the implementation of a South Australian-tailored, sustained public health messaging campaign about the harms of online gambling, particularly targeting young people.
  • a complete ban on online gambling advertising, including print, television and all online social media or other media.
  • a stronger regulatory environment in SA. The Authorised Betting Operations Act allows those online gambling companies who are generally licenced within the weaker regulatory environment in NT to operate in SA. The gambling codes of practice that apply to these operators must be strengthened to prohibit any forms of inducements and access to exotic bets (e.g. ball by ball and sucker betting).
  • Online betting operators must be required to provide patrons with mandatory pre-commitment options and the ability of those who want to stop gambling to be barred from all authorised online betting operators.
  • Gamblers should be able to voluntarily or as in gaming machine use be deemed to be a barred gambler.

Conclusion

Gambling harm is a global issue, South Australia is a world leader in gambling losses, with the majority of those losses coming  from gaming machines and online options.

Despite COVID-19, not much has changed in South Australia, indeed many of the government’s reforms such as approving note acceptance on gaming machines have caused more harm.

Gambling profits and losses continue to rise.

More research is needed to examine the full impact of this on the South Australian population.

However, existing evidence is already enough for us to know that already vulnerable groups from low socio-economic areas are likely to be most affected.

To effectively reduce gambling harm in South Australia a public health approach to problem gambling is necessary.

Policies and solutions must go beyond  ‘personal responsibility” and ad hoc reforms.

 At present, policy change barriers include increasing reliance on gambling tax for state revenue and the gambling industry’s growing influence in the policy process.

People’s well-being must always come before profits. To increase the likelihood of policy change, stakeholders must continue to work towards a common goal; engage further to build an extensive network for support; and implement well-thought-out solutions and effective reforms to reduce the harms gambling causes.