Australia’s gambling addiction proving too lucrative to cure

Article by Jason Scott and Michael Heath 

After struggling with a gambling addiction for 13 years, Kate Seselja had enough. The 37-year-old mother of six was contemplating driving her car into a tree after losing more than $500,000 playing slot machines.

“At first they were a bit of fun,” said Seselja, who sought help after almost joining the estimated 400 Australians with gambling-related problems who commit suicide every year. “It’s so normalised in Australia. There’s machines on just about every street corner.”

More than half of the $23 billion that Australians gambled away last year was sunk into slot machines. While most countries restrict gambling to casinos and betting shops, Australia permits it in corner pubs and sports and veterans clubs. Despite having less than half a per cent of the world’s population, it is home to a fifth of the world’s slot machines.

There’s scant will for political change: the industry is a major donor to lawmakers, including Prime Minister Malcolm Turnbull’s coalition, and previous attempts at reform have failed. Australian states and territories reaped $5.8 billion in taxes from gambling in the year through June 2015, easing the pressure on a federal government presiding over a fragile AAA rating and budget deficit made worse by political inertia and gridlock.

While the July re-election of anti-gambling independent lawmaker Nick Xenophon to the upper house of parliament-with a handful of senators from his party in tow-has reignited talk of reform, he’s sounding despondent.

“The hoteliers and clubs are powerful lobbyists and the No. 1 jackpot junkies are state governments,” said Xenophon, adding that Australian lawmakers are “terrified” of the gambling industry. “The federal government could wean them off their dependency but it doesn’t look like that will happen.”

A decades-old habit is hard to shake. Slot machines started proliferating in Australia in the 1950s when they were legalised in New South Wales, the nation’s most populous state and home to Sydney. Their evolution from clunky “one-armed bandits” into sophisticated video-game entertainments encouraged other states to adopt them in the early 1990s, as governments sought revenue sources in the wake of a recession.

Some 200,000 machines later, so-called “pokies” are the biggest driver of Australia’s gambling industry-but that’s come at a cost. About one in six Australians who play regularly has a serious addiction and loses on average about $21,000 a year, according to government data. The social cost of gambling to the community is estimated to be at least $4.7 billion a year.

Akin to the NRA

Australia’s gambling addiction has made it the world’s biggest loser. The country spent $US761 per capita last year, with Hong Kong and Finland coming in second and third place, according to UK-based Global Betting and Gaming Consultants. The US, home to the gambling mecca of Las Vegas, was 7th.

Xenophon on Tuesday joined other lawmakers in Sydney to launch a campaign to encourage workers in pokies clubs and those involved in manufacturing the machines to expose secrets behind what he called “the electronic locusts of the 21st century.”

Australia seemed close to enacting new safeguards in 2010, when independent lawmaker Andrew Wilkie agreed to support Julia Gillard’s minority Labor government in return for stricter rules on slot machines, including allowing a maximum bet of $1.

After a campaign by club lobbyists branding the measures “un-Australian”, Gillard tore up her deal with Wilkie. A subsequent change in government to Turnbull’s Liberal-National coalition killed any chance of reform.

The pokies lobby’s influence compares to the power wielded by the National Rifle Association in the US, said Tim Costello, Alliance for Gambling Reform spokesman. He said the states and the gaming industry have helped pokies “to spread, particularly through the poorest postcodes, and it’s a willful blindness by the federal government to say, ‘well, who cares?'”

“There really isn’t that clear need for interference from the federal government” because the states license, regulate and collect revenue from the gaming industry in their own jurisdictions, Minister for Human Services Alan Tudge said in an interview. While he would prefer that poker machines were restricted to casinos, such as in Western Australia state, it was too late to “unscramble that egg”.

“Labor believes that well-regulated gambling has a place in Australian society, as long as appropriate harm minimisation measures are in place,” said Julie Collins, the opposition party’s spokeswoman for gambling. She said Labor was continuing to examine reform proposals.

On the suburban fringes of national capital Canberra, the sprawling gaming and dining facilities of the Vikings Club offer pub-style meals and alcohol at discount prices, plus a choice of more than 200 poker machines. The group owns four clubs around the city, with 702 machines earning about three-quarters of its revenue.

‘Consenting adults’

While Anthony Hill, Vikings chief executive officer, said his clubs may have become too focused on gaming revenue rather than sporting facilities, he dismissed the need for further legislation.

“Most customers are consenting adults happy to be entertained, and are educated enough to know what their odds are,” Hill said, adding his club’s machines are programmed to cost gamblers an average 8 cents of every dollar played.

Francis Markham, who conducts gambling research at the Australian National University in Canberra, said lobbying by industry interests was slowing the reform movement.

“There’s a correlation between a spike in political donations from these groups just when there’s more talk about gambling reform,” said Markham. “Neither of the major parties are willing to countenance reform and for the minor ones their drive for change appears politically latent.”

Seselja, the former gambling addict, now gives talks in the clubs where she sometimes lost her monthly salary in a couple of hours.

“We haven’t been protected from this obvious, preventable harm by the government,” she said. “To market it as harmless fun and entertainment, when it’s been totally designed to addict an individual and take all of their money, is obscene.”

Read original article from Financial Review.