Gambling Policy

Notes :

this is Assignment for POL 802 Comparative Public Policy Master of Politics & Public Policy Macquarie University.

EDUCATION TO MINIMISE PROBLEM GAMBLING IN NEW SOUTH WALES

by : Andri Rusta

(Student of Macquarie University Australia & Lecturer at Andalas University Indonesia)

 This essay considers aspects about problem gambling which diverts welfare resources from other more needy social areas.  State and Territory government-endorsed gambling is a massive industry.  It is proposed that the New South Wales Government should develop education programmes specifically targeting current and potential problem gamblers.

 

Background

The first permanent European settlers in Australia brought with them the societal and cultural values of an evolving London early-industrial society.  One of these cultural values was gambling which not only offered recreational diversion but the chance of immediate wealth.  These early settlers engaged in gambling activities such as the drinking bet, cockfighting, card, coin and dice games (O`Hara, 1988, 11).  Early into his governorship in April 1810, Macquarie, on whose tombstone is inscribed “The Father of Australia”, promoted a sports day as a recreational activity for the colony.  This sports day had two-horse races and, in the ensuing years, became larger.  During Macquarie’s term, backgammon and billiards became popular gambling pastimes (O`Hara, 1988, 13-18).

As an entertainment, gambling grew rapidly throughout the nineteenth and twentieth century’s. By the 1860s, throughout Australia, horse-race betting was a popular recreational activity.  In 1879, South Australia was the first colony to introduce the on-course totalisator betting (the “tote”); the “totalisator” being the distribution of all successful bets from a total pool of bets placed. The “tote’s” introduction was to regulate and limit legal gambling to race courses with the intention of driving the illegal, off-course totalisators out of business. The other colonies quickly followed the South Australian initiative. In 1917, the Queensland government allowed a state-wide charity, the Queensland Patriotic Committee, to operate the Golden Casket Art Union lotteries. In 1920, to raise revenue, the Queensland government took control thus becoming the first state government to operate lotteries (http://www.olgr.qld.gov.au).

Within the decade, the number of draws for Golden Casket lotteries went from twice a year to once every ten days. The other states followed this initiative with South Australia being the last jurisdiction in 1965 to introduce state-operated lotteries. New South Wales, in 1955, was the first state to permit poker or gaming machines and restricted these to licensed clubs as these were a community based mutual, i.e. members-only, associations. The expectation was that profits from these machines would fund community social activities. Other states have introduced poker machines and they can now be found in hotels as well as community-based clubs.  NSW gave first license for poker machines in 1956. Meanwhile, instant lotteries and lotto was introduced in 1979. By 1999 there were around 185.000 licensed gaming machines in Australia, of which half were found in New South Wales, with this number increasing to just fewer than 200.000 in 2008.

 

The Gambling Industry & Gambling Problem

The gambling industry has developed into a significant activity in the lives of many Australians. According to the Australian Bureau of Statistics June 2005 survey, there were thirteen casinos operating in Australia and 5370 businesses providing gambling services. As a generalisation, people gamble because of the dream of instant wealth as well as for recreation. Casinos, off-track betting venues and licensed premises where gambling facilities are available provide an easy-to-access, comfortable social environment where favourable and adverse wagering experiences can be shared with a “community” of other gamblers.

For some individuals, gambling can be an activity that causes economic, social, moral and psychological problems.  Most people gamble for entertainment, as a hobby or for something-to-do.  Some of these gamblers feel guilt, a minor level of depression and try to conceal their gambling.  Also they engage in behaviour where they chase losses and perhaps misappropriate other people’s monies. In the next step, they may become depressed; suffer financial hardship, loss of employment or education opportunities and can even develop thoughts of suicide or attempt suicide (Productivity Commission, 1999a, 18).  Such outcomes impacts on Australian government as well as state-government social welfare and health programs.

The number of problem gamblers increases every year.  This is may be because they don’t have adequate information about the nature of the gambling product they purchase, such as the role of skill compared with chance, and the actual odds of winning.

“These information problems may be exacerbated by the advertising used, player inducements and the design of gambling products. Gamblers may also find it difficult to track time and money spent on gambling because of the unpredictable combination of wins and losses.” (Productivity Commission 2008a, 25).

 

In general, males and females have different preferences at the moment they decide to gamble.  Males prefer to bet on sporting events and games of skill, whereas women prefer gambling games such as lottery tickets and poker machines. According to an Australian Medical Association (AMA) publication (1999), male gamblers usually seek excitement and peer acceptance.  Female gamblers usually feel lonely and strive to avoid boredom in their everyday life as well. Most active gamblers come from the lower socio-economic class and include the unemployed, the less educated and the aged. There is strong evidence that active gamblers also experience marital disruption, family breakdown and problems with domestic violence (AMA 1999).

Problem gambling also results in several negative societal impacts such as family and child abuse (Vitaro 2008), self depression, anxiety, mood disorder and the increase of alcohol consumption which create some public health issues (AMA 1999). Moreover, Marshall (2005, 69) has cited that

“For those who gamble, life becomes infused with new content, requiring them to sacrifice, reducing in duration, or rescheduling some previous participation in production, consumption, social or leisure-time activity”.

 

Recent Research & Surveys

The Productivity Commission, the Australian Government's independent research and advisory body on a range of economic, social and environmental issues, has reported that the "gambling industries" account for about 1.5 per cent of Australia`s GDP.  In 1997-1998 the gambling industry generated around $11 billion net revenue in, increasing to $16.5 billion net revenue net in 2004-05 (2008a, 10-12). Gambling on electronic gaming machines (EGM) represents almost 60% of this while casinos represent only 16.7%.  Most gamblers seem to prefer EGMs to other gambling activities.  The Productivity Commission (2008a, 12) concluded that the amount spent on gambling activities exceeded household expenditure in 2005-06, about $11 billion spent on utilities, $11 billion spent on alcoholic beverages and $20 billion spent on clothing and footwear.

The Productivity Commission also found that 82 per cent of Australian adults, mostly those between the ages of 18 and 24 with lower levels of education, had participated in gambling within the previous year to its earlier report (1999a, 13).  The Productivity Commission (1999a, 6.1) estimated that around 293,000 people, or 2.1 per cent of adults, have a significant experience with gambling, of which about 130 000 had a severe problem with gambling and the balance had a moderate problem. The National Institute of Economic and Industry Research, a private economic research and consulting group located in Melbourne, estimates that:

“There were 71,708 serious problem gamblers in 2000-01 in New South Wales from overall 159.808 all of Australia.  They lost on average over $27,000 each and created an additional community cost of $7,700 each or $576 million in the State.” (2003, 63-66).

 

THE GAMBLING POLICY

The gambling addiction issue requires serious attention from the Australian and state and territory governments. Both levels of government have issued policies to overcome this problem.

The Australian government’s Interactive Gambling Act 2001 seeks to stop interactive gambling services being provided to customers in Australia.  This legislation prohibits the provision of the Australian-based interactive gambling to customers in designated countries. It also establishes a complaints-based system to deal with internet gambling services where the relevant content (prohibited Internet gambling content) is available for access by customers in Australia, and prohibits the advertising of interactive gambling services.

In 2004, The Council of Australian Governments’ Ministerial Council on Gambling (MCG) commenced a four-year national framework on problem gambling. The framework aimed to minimise the negative consequences of problem gambling for individuals, families and the community through a national approach (http://www.facs.gov.au/). This national framework is built on four principles with key focus areas, objectives and strategies on public awareness, education and training; responsible gambling environments; intervention, counselling and support services; and the national research and data collection.

In 2005, the Minister for Family and Community Services announced that the Australian Government would commit up to $3 million to establish a national gambling research institute (NGRI). On behalf of the MCG, the Australian Government engaged the Allen Consulting Group to undertake a Strategic Review of Current Responsible Gambling Research. The Australian Government funded a scoping study on options regarding the structure, governance, costs and possible funding arrangements for an NGRI.

States and territories have spent more than $200 million on responsible gambling and harm minimization over the last five years. The state and territory governments never allocate a significant amount of funds to overcome problem gambling. Based on Productivity Commission data (1999b, 17.13), the New South Wales government allocates only equivalent to 2 per cent of the annual gross gaming revenue to address problem gambling. This strongly contrasts with the Victorian government which allocates 8.33 per cent of the net cash balance from  EGMs in hotels and with the Northern Territory government whose gambling-problem programs are funded by a levy of 25 per cent of gross profit on EGMs in hotels.

In general, all states and territories have policies that address problem gambling. However the regulatory and legislative environments differ considerably and are continually evolving. Most of the regulation set limits or restrictions are on the gambling area. The Australian government’s Department of Families, Housing, Community Services and Indigenous Affairs (FaCHSIA, 2008b) classified Gambling policy to the four forms of Regulatory, which are:

• Money management : prohibition to use credit cards through ATM facilities, restricted access to ATMs and ETFPOS, limits on withdrawals from ATMs, cashless/card-based gaming

• Structural characteristics and machine design: caps on number of electronic gaming machines, bet and win limits rate, limitation for note acceptor, and display of odds and return to player.

• The gambling environment: clocks to be displayed on the gaming machines, limitation hour of pubs and clubs, restrictions on player loyalty systems/programs and smoking ban.

• Education, public awareness programmes and treatment service : telephone and face-to-face counselling services, public awareness and education campaigns, research, partnerships with community groups and support for problem gamblers and their families.

 

New South Wales has implemented a range of initiatives to address the adverse effects of problem gambling. These include imposing regulatory controls on gambling operators, funding responsible gambling education and awareness campaigns, and working with stakeholders in the gambling industry and counselling services.

New South Wales has commissioned over 40 state specific gambling related research projects since 1995. These have been funded by the Responsible Gambling Fund (formerly known as the Casino Community Benefit Fund) which provides dedicated funding for gambling research, education, and awareness campaigns and the establishment of a range of counselling, treatment and related community services and projects. (Productivity Commission 1999b, 17.9)

In July 2003, New South Wales commissioned the Independent Pricing and Regulatory Tribunal (IPART) to conduct a review of the effectiveness of various existing and proposed measures designed to minimize gambling related harm. The review was aimed at developing a comprehensive evidence based decision making process to deal with gambling harm minimisation (www.olgr.nsw.gov.au) The review included:

·         a review of existing gambling harm minimisation measures and counselling services;

·         submissions from stakeholders; and

·         consultation with industry, experts, community agencies and counselling services.

The review found a need for a more integrated policy framework regarding problem gambling; with the aim of developing policy programs and a regulatory system that promotes a culture of responsible gambling and to promote inform choice for the community.

 

Conclusion

In response to the Productivity Commission’s investigations into gambling, it is notable that the initiative to “do something” has come from the Australian government within the framework of the Council of Australian Governments (COAG).  It would appear that the State and Territory governments, while enjoying the benefits of revenue from gambling activities, have transferred to the Australian government, which does not receive revenue from gambling, the issue of rectifying problem gambling.  Section 51 of the Commonwealth of Australia Constitution Act 1900 does not permit the Australian government to regulate gambling in the states (under section 122 the Australian government could regulate gambling activities oversighted by Territory governments).  The Australian Government’s involvement is limited to the nationwide social impacts of gambling.  As the Australian Government’s involvement is limited, it can only seek agreement among the states about the extent and content of any initiatives to address problem gambling.

As earlier observed, problem gambling can have detrimental health and social effects, let alone economic effects, on both the gambler and his or her family unit.  Such effects can lead to increased Australian Government expenditure on health and welfare benefits for individuals.  As well, it would prompt an increase of Australian Government financial assistance to non-government welfare agencies for problem-gambling counselling services.  There is a similar pattern in regards to economic activity.  By default, the states and territories have consigned the cost of overall economic planning to the Australian government. Such planning includes the evaluation of the cost of employee absenteeism and employee misappropriation.

From above reviews, it can be concluded that gambling is a massive Australia-wide industry in which gambling addiction problems can be encouraged in some individuals. Data from both the Productivity Commission and The National Institute of Economic and Industry Research indicates that on state and territory basis, New South Wales has the largest number of problem gamblers. Yet New South Wales appears to fund only token policies to curb problem gambling.  New South Wales’ policies do not focus on prevention-education targeting problem themselves. New South Wales’ lack of policies and efforts to provide information about gambling will increase gambling problems. The New South Wales government’s policies need to target specifically the problem gambler. Through the New South Wales education system, anti-gambling kits have been distributed to secondary students. However, little education is undertaken for the adult-problem gambler, the very person who under New South Wales law can engage in the gambling activities from which New South Wales derives a great deal of revenue.  Education policy for the problem gambler will be effective if commenced as soon as possible so that the gamblers understand the dangers of gambling itself and the nature of his or her addiction.

 

Reference

(1999a) Australia's Gambling Industries. Canberra, Productivity Commission

(1999b) Australia's Gambling Industries. Canberra, Productivity Commission.

(1999) Australian Gambling Comparative History and Analysis. Melbourne, Victorian Casino and Gaming Authority.

(2003) The Economy Impact of Gambling. Victoria, National Institute of Economic and Industry Research.

(2008a) Gambling Issues Paper. Canberra, Productivity Commission.

(2008b) National Framework on Problem Gambling 2004-2008.

(August 2001) The Impact of Gaming Machines on Small Regional Economies. The SA Centre for Economic Studies.

AMA (1999) Problem Gambling and Public Health: Productivity Commission Inquiry into Australia’s Gambling Industries. Australia Medical Association Submission.

DOWLING, J. (2005) Problem for NSW after July 2007? Gambling up $100m after smoking ban.

DRABSCH, T. (2003) The Economic and Social Implications of Gambling. Sidney, NSW Parliamentary Library Research Service.

JACKSON, D. K. (March 2001) Gambling Policy and Regulation E-Brief.

MARSHALL, D. (2005) The Gambling Environment and gambler Behavior: Evidence from Richmond-Tweed Australia. International Gambling Studies, Vol.5, 63-83.

O`HARA, J. (1988) A Mug`s Game A History of Gaming and Betting in Australia, Kensington, New South Wales University Press.

VITARO, F., WANNER, B., BREDGEN, M. AND TREMBLAY, R.E (2008) Offspring of Parents with Gambling Problem: Adjustment Problem and Explanatory Mechanisms. Journal of Gambling Studies, Vol. 24, 535-553.

WIEBE, J. F.-H., AGATA Youth Gambling Problems : Understanding the audience.

YOUNG, M. (October 2006) north territory prevalence survey 2005. Unprint NT, Charles Darwin Institute