Why Northcote By-election Matters: The Australia gambling industry “is the equivalent of the NRA” and politicians are turning a blind eye to harm

Recently Peter Costello compared Australia’s gambling industry to the NRA. I think he’s on the mark, just have a look at the donations the gambling industry gives to politicians, or the revolving door between government and gambling industry or the harm the products make or the regulatory capture that exists. Peter Costello said:

The casino and gaming industry in Australia is the equivalent of the NRA — we have 20 per cent of the world’s pokies, just like Americans have so many guns,” Mr Costello said.”This blind spot means we are the greatest problem gamblers by a country mile

I thought it would be a good time to look at gambling in Australia and put some facts on the table that are essential if we are to find solutions to the crises. There’s currently a Bill before the parliament that will lock in pokies for the next 25 years, Victorians lost $67 billion in the last 25 years it’s time to put the breaks on and have an inquiry and enact some effective harm minimisation measures, such as the mandatory pre-commitment.

The Alliance for Gambling Reform has called for an inquiry.

I previously worked for Gambler’s Help so I have some understanding of the failed harm minimisation system and wreckage that gambling has on the community.

Your Play/Voluntary pre-commitment was always going to fail.

A pilot of Pre-commitment system was carried out by Schottler Consulting in 2010 see here. Less than 1% of patrons signed up to use the system. They speculated that more people would use the system over time but provide no evidence for the sanguine conclusion.

The bureaucrats tasked with the impossible job of selling YourPlay to punters, a voluntary pre-comitnment system to work, had to scratch their heads. They had to think outside the box and decided to go with a card that can be attached to venue rewards so patrons can accrue points for playing longer on the pokies…seriously.

Also when you reach a limit you can keep playing.

With much fanfare Victoria introduced YourPlay at cost of $197 million. Health experts knew it wasn’t adequate from its inception

The people who need it most are least likely to use it, because if you have gambling problem you do not want to know how much you are spending when you are in front of a machine.

After the introduction of YourPlay some places had increase in losses from pokies clearly showing it failed. If YourPlay was an effective measure you would expect a decrease in losses. Ballarat had a 1 Million increase

A nearly $1 million increase in Ballarat’s poker machine losses this last financial year shows the Your Play system is failing” now you have docs that prove that.

The Productivity Commission found that:

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.

They also poetically said that voluntary pre-commitmen or what they call “partial pre-commitment” would be in like giving “Ulysses a knife to cut his bonds when the Sirens call.”

Their conclusion is that mandatory is the way to go.

The Commission’s view is that pre-commitment is a strong, practicable and ultimately cost-effective option for harm minimisation. It overcomes some of the existing severe deficits in achieving self-control for problem gamblers and for genuine informed consent by many other consumers.

While recognising that even a full pre-commitment system cannot be a ‘silver bullet’, it may ultimately take pressure off other regulations aimed at harm minimisation. If it is sufficiently effective, then some of the more prescriptive regulations could be relaxed or revoked. This is one reason for rigorous evaluation of the approaches recommended by the Commission, and the associated need for developing a capability that brings adequate resources and impartial expertise to such evaluations (chapter 18)

The Productive Commission wrote that there’s a tendency for “gamblers to underestimate their spending”, they continue that “when the Australian Bureau of Statistics asked people to estimate their gaming machine losses, they found the losses added to around 3 per cent of the real total.”

Why not have harm minimisation measures such as mandatory pre-commitment? The answer is simple. Money. “Problem” and “moderate gamblers” (i.e. ones designated on the medical scale) contribute half of the revenue, according to the Productivity Commission. To understand the what these numbers equate to a prevalence study showed that problem gamblers make up 0.81 per cent or 35,500 Victorian adults and 2.79 per cent or 122,500 Victorian adults were moderate risk gamblers. This relatively small cohort spends over $500 Million.

The people who designed Yourplay, Department of Justice and Regulationstate that it was not designed to stop problem gambling:

It is important to note that YourPlay is not designed to be a solution for problem gambling.

Yet the Minister in charge doesn’t understand this and spins it 180:
We will continue to take an evidenced based approach to addressing the harm caused by problem gambling.

The evidence is clear that YourPlay is a failed system however the minister for gambling Marlene Kairouz is so dishonest that she says they have taken an “evidence based approach”.

The level of hypocrisy is disgusting.

Labor and Liberal Party are putting profits before people and are addicted to pokie money

The only reasons the Vic government legalised pokies was because the government wanted the revenue, which they are now addicted to. The government is wilfully ignorant of the harm from pokies which is documented below.

pie-chart_160427
Victorias reliance on pokie revenue – Pitcher Partners

 

The more money lost at a venue the greater the harm.

‘Gambling expenditure predicts harm: evidence from a venue-level study’ 2014 Markham, Young and Doran

..aggregate patron electronic gaming machine expenditure predicts the prevalence of gambling-related harm at the venue level

darebin-egm-data-2016-2017

Pokies is the most harmful form of gambling.

image

The amount lost on gambling is increasing – the problem is getting bigger.

going up
smh

We have 20% of the worlds poker machines and the most per person (more than Macau).

Australia has more poker machines per person than any country in the world

Australia is the biggest gambling loser. In. The. World.

economist

The Economist writes in ‘The world’s biggest gamblers’:

To the general public, Australia hardly leaps to mind as a gambling hotbed. Yet industry insiders know it is far and away their most lucrative market: …betting losses per resident adult there amounted to $990 last year. That is 40% higher than Singapore, the runner-up, and around double the average in other Western countries. The most popular form of gaming in Australia is on ubiquitous electronic poker machines, or “pokies”, which are more prevalent there than anywhere else.

Crises Gamblers are the tip of the iceberg

Harm occurs beyond “problem gamblers” 85% of harm occurs in non-problem gamblers link. The very first public health approach to gambling harms, in the world, was only conducted last year. It basically showed that most of the work done in the name of “responsible gambling” was a sham. It flipped the idea that there is a small population suffering harm from gambling, the “problem gamblers” which is a crises orientated response. Instead most of the harm occurs in the “low risk” category – which demands a policy response that is systematic and “upstream”.

85 per cewnt is low risk
Population level harm – 85% is non-“problem gamblers”


There’s a cost to people, society and economy.

The latest research is devastating. It shows the cost is higher than the benefit in terms of tax. Browne and his team concludes “the cost of gambling in Victoria in 2014-15 totalled $7 billion” during the same time it generated a total of $1.6 billion in taxes and levies. The costs include:

  • financial costs
  • productivity and employment costs
  • crime and legal costs
  • personal and family costs
  • treatment costs.

They highlight the inefficiency of using gambling as taxation (which is the reason it was introduced by Joan Kirner).

Gambling involves a complex redistribution of wealth within society, at the individual, business and government levels….The amount of money transferred from problem gamblers to operators is more than half the amount raised in taxes and levies by government. This suggests that gambling taxation represents an inefficient and inequitable means of raising funds for public expenditure.

…the $7 billion in annual costs resulting from gambling calculated here can be compared to gross industry revenue of $5.8 billion. In our view, any reasonable estimate of the consumer surplus of gambling would likely entail a neutral or (more likely) negative net benefit to the Victorian community.

Harm and costs to economy and society is complex, can be long term, indirect and not captured (e.g. data about suicide from gambling is not generally collected) see here and here. Therefore, arguing against a pokies licence licence to the VCGLR and the Commission weighing it up is not based on reality. The negative harms are called “disbenefits”, how can the disbenefits be accurately quantified? What is the cost of suicide from pokies when the data on people taking their life from gambling isn’t systematically recorded? What is the cost of a child not going to uni because the parent spent their savings on a crippling addictions on the pokies? What is the cost of being convicted for fraud and not being a parent, volunteer. What is the cost of an increase in family violence incidents because of the financial strain the pokies place on already struggling families? Local Councils are chronically underfunded yet they are the ones who are expected to spend their money on expensive reports to argue against something they know will damage their community in a system that seems more like a mystery than a science. And some councils even advocate for more pokies leaving no one to stand for the communities interest.

The Productivity Commission fraud was most commonly because of gambling:

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.

Areas with more poker machines have higher rates of domestic violence.

harms matthew

The Code of Conduct provision for staff to intervene when someone displays signs of problem gambling needs to be made into law.

The current regime is called “the responsible service of gambling” at its core is expectation that staff will intervene if patrons show signs of having a problem

RSG_FactSheet_01

This is based on a voluntary code of conduct for venues (not a law) and there’s no enforcement or assessment of compliance. Why would venues get less revenue doing “responsible serve go gambling” when there are no consequences for ignoring it?

Some people have faced hostile management for merely complying with the RSG:

Cassie Byrnes says the venues did not take the RSG requirements seriously.

In fact, she says, she witnessed the opposite.

Ms Byrnes says someone who did do the right thing on his first day on the job almost got sacked over his response

“Fresh out of RSG school, he said, ‘Well, maybe you should go home, or is there someone that I can get you to, like, get you some help?’ And the person training him then went and told senior management, and, within like the space of just 30 seconds, I could see like the duty manager marching down through the hallways of the poker machines and like took him into a back room, and he just got an absolute grilling. It’s just not allowed. Like … like, he almost lost his job.”

….

It has left her wondering what, if anything, the staff at the venues did as her sister frittered away as much as $900 a week over more than a decade.

There’s no safe level of gambling.

There’s no safe level for gambling, much like smoking link which means the “responsible gambling” message is like saying “it’s ok to have a few cigarettes, smoke responsibly”. At the core of the “Responsible Gambling” message is a pro-gambling message that normalises the activity. If someone has harm from gambling then they can be labeled as being an irresponsible gambler even though the the machines are made to be addictive. Because research is funded by an organisation with a restricted TOR the research is already compromised.

The term “Responsible Gambling” is a misleading term of industry spin.

Dr Charles Livingston is critical he writes:

It transfers responsibility for gambling problems to end users rather than those profiting from the dangerous product.

Or Dr Francis Markham the Conversation:

“responsible gambling” model of regulation. This model rests on the notion that gambling in moderation is safe. In contrast, our research suggests that gambling at any level can be associated with harm. And the more money lost, the greater the risk of harm.

Responsible gambling takes agency away from the pokies machine a product designed to be addictive and puts it on the individual:

“many people have been led to believe they are suffering from cognitive distortion when, in reality, they are reaching proper conclusions based on misleading information”. (Journal of Gambling Issues 2007;20:215-33).

One of the two objectives of the Victorian Responsible Gambling Foundation is to “foster responsible gambling”

The Gambling Regulation Act 2003

(a) to foster responsible gambling in order to—

(i) minimise harm caused by problem gambling; and

(ii) accommodate those who gamble without harming themselves or others;

The problem with this is that “problem gambling” is a psychological category not a measure for harm, which its being used confusingly as a proxy.

As Browne et al  writes in the landmark study:

Levels of gambling severity are the most commonly used proxy measure for harm (Binde, 2011). A number of different measures of gambling severity are used and there is some debate about their appropriateness or validity. Most of that debate is not of relevance to this review, such as issues of the accuracy of the measures, concerns over the tools used to measure (CPGI and South Oaks Gambling Screen (SOGS; Lesieur & Blume, 1987)), complexities of the spectrum, and sampling issues (non- response and misreporting bias). However, one theme from the discussion surrounding measures relevant to harm is the argument that the measure for problem gambling should be centred around the incidence and extent of the problems (or harms) it creates rather than whether it is an addiction or a form of individual psychopathology (Svetieva & Walker, 2008). That this discussion is taking place illustrates that measures of problem gambling tend to indiscriminately combine harms (outcomes) and indicators of addiction (i.e., clinical symptoms). This is done with some justification, as both types of items tend to be good discriminators of problematic gambling behaviour. However, the cost to the discipline appears to be a conflation of the two concepts, and a neglect of the possibility that harms may occur with or without an addiction, and addiction does not necessarily imply that the highest level of harms are being incurred.

The issues raised above reflect the serious limitations associated with using clinical diagnostic criteria as a proxy for harm. The Productivity Commission (2010) summarised these concerns as follows:

  •   People may experience the traits but not experience harm (financial consequences are not excessive).
  •   People may be experiencing harms but gambling behaviours and attitudes may not be pathological.

“…harm needs to be considered across the intensity spectrum and harm should be considered as separate to severity of gambling problems.”

“Problem gambling measures have an important role to play, but they were not designed to assess exposure to gambling harm, nor can they delineate the broad range of harms than vary both in quality and severity.”

Gambling research is highly politicised and conflicted:

As a project led by Goldsmiths University found, the UK funding programme for gambling research prioritises “banal” research questions that will not offend the gambling industry, with funded research often conducted by private companies or academics that have close ties to the industry.

“scholars in the fields of alcohol and tobacco have shown that industry funding systematically influences findings.”

and

The report’s key finding was that academic research into gambling is heavily biased. It is controlled by industry and government in two main ways.

An example of this is introducing “safe” levels of gambling currently being looked at. This ignores the research that shows that gambling harm is like smoking and is as absurd as saying “two cigarettes are safe per day” – it’s not only wrong but encourages people who don’t smoke or gamble to start – normalising gambling.

The Victorian Commission for Gambling and Liquor Regulation is essentially a rubber stamp for the gambling industry

In 2014 there was an review of decisions of the Commission/VCGLR conducted by the Municipal Association of Victoria which found deep problems.

 The Commission has overwhelmingly taken the view that factors supporting applications outweigh those seen as detrimental in the overwhelming majority of cases. In our opinion this arises from the Commission’s tendency to see the economic or financial factors as more readily identifiable than detrimental but often poorly quantified social factors, particularly social detriment and disadvantage.

Of the 142 applications reviewed, 132 (94%) were approved by the Commission. Ten (6%) were refused. Of those approved, 17 were granted with conditions imposed. Table 1 (below) provides further details of these applications.

 

Victoria can kick the habit and dependence on gambling review that is causing havoc.  

The myth around jobs is persistent but false, Francis Markham:
“The claim that Big Gambling is a source of economic prosperity is dubious. Gambling industries do not create “new jobs”. They simply divert employment from other sectors that are actually more labour-intensive. Gambling does not create new wealth. It merely transfers wealth from poor to rich and may in fact reduce economic activity due to diverting gamblers from productive labour.” https://theconversation.com/who-wins-from-big-gambling-in-australia-22930
Productivity Commission: “…no long-run effect on national employment from even full prohibition of the gambling industries”

 

Having “safe gambling” limits like alcohol is problematic

 The VRGF has flagged (p.15) using it as a spring board for “limits for consumption to minimise the risk of harm” and that a similar study will be done in Australia ” to calculate limits based on Australian data.”

There is a creeping push to have “limits for consumption” similar to alcohol found in the Background Paper. Research shows that “there is no evidence of a threshold below which increasing losses does not increase the risk of harm.” The consequence of the messaging around limits (must be understood contextually in its relation and expropriation with industry marketing) is that it will normalise gambling. It’s the nature of the product to make it difficult to limit one’s consumption – in the same way it’s very difficult for most people to just smoke 2-3 cigarettes per day. It might encourage people who don’t gamble or don’t gamble often to gamble more and probably won’t have much effect on people gambling beyond the “safe” level. It’s like saying 4 cigarettes a day are safe something when we know that there are no safe levels of smoking or gambling. It’s almost as if no gambling doesn’t equate to no harm from gambling and that “responsible gambling” presupposes that a person is a gambler. It’s basically the zombie Reno Model rearing its pseudoscience head.

Pokies Machines are designed to manipulate people

The original patent for an “Electronic gaming device” makes it clear that the purpose is to trick people.

 it is important to make a machine that is perceived to present greater chances of payoff than it actually has within the legal limitations that games of chance must operate.

When a person plays a pokies machine they are contending with experts who have designed a very addictive product who se KPI is to get a person to stay a s long s possible infant of a pokie machine and keep coming back until they’ve played to “exhaustion”

Today, the gambling machine industry employs an army of engineers, programmers, composers and graphic designers to produce increasingly sophisticated games and machines, with more ways of persuading people to part with their cash.

What’s the solution?

Here are some identified by the City of Darebin

  • one dollar maximum bets
  • mandatory pre-commitment
  • establishing a $200 cash-out limit in gaming facilities
  • a 10-hour minimum closing duration for venues each day.

The Alliance for Gambling Reform has called for an inquiry into gambling harm so the “voices of the victims” can be heard.

How can this policy changes happen? Through people power and making sure we put pressure on elected representatives so they don’t get a free pass. The evidence is clear, we just have to communicate the problem and solutions. Joining the Alliance for Gambling Reform would be a good first step.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s