Pokies

The prospect of gambling brings to mind the glittering lights of Las Vegas, but its real home is a dingy RSL club in Western Sydney. Here, countless desperate folks see their only chance at escape within the tawdry reels of what is euphemistically called ‘gaming’. These dens of inequity ensnare the poor, the uneducated and pensioners with little to live for but the promise of riches through feedback specifically designed to trick players into taking just one more spin. Loyalty programs turn saps into VIPs and give them a free spin every visit to re-engage those gambling faculties and maintain the addiction cycle. Australia leads the world in gambling spend per person, thanks to these obiquitous poker machines. We spend $1,273 per adult each year on gambling in this country. More than half of this expenditure is taken up by the particularly loathsome category of poker machines.

 

Australia has the second highest number of poker machines in the world, 195,631 at last count which places us second only to the USA (but with a much higher number per capita). This makes one poker machine for every 95 adults. Of those machines, nearly half are in New South Wales, which records an abominable machine per 65 people. Consequently, the average New South Welsh adult loses $1,580 per year gambling(roughly 2/3 of that on the pokies), or about $30 every week. We lose $23.7B each year on a turnover of $204B to the gambling industry. To put these numbers in perspective, the agriculture industry earned profits before tax, depreciation, etc of $21.1B last year, while the construction industry earned $43.2B.

 

What these statistics conceal however is that not all of us gamble. The HILDA survey found that 8.1% of Australians play poker machines once or more a month. So neglecting the (likely only small) losses of irregular players, each poker machine player loses $8,023 a year on the pokies alone. Eight thousand bucks per person per year, so more than the average household spends on electricity, gas, clothing, footwear and telecommunications combined! Losses per player are likely higher within NSW alone, but HILDA doesn’t break down participation to state levels. Even worse, the HILDA survey asked gamblers how much they thought they spent on a monthly basis. Pokie players underreported their losses by a factor of six compared with the industry data, demonstrating how the tricks of the machines cause addicts to lose track of their spending.

 

HILDA does break down demographics, so we can see who these players are. Poker machine gamblers are disproportionately poorer, less educated, more likely to be indigenous, of lower socio-economic status, older and more likely to be on government assistance than the general population. So those who are compelled to throw their money away are also those who can least afford it. Pokies steal from the poor addicts and give to the rich owners of these suburban casinos, who are commonly professional sporting teams. This isn’t just a moral issue, but also one of social justice.

 

How have we got to the point where pokie addicts each sacrifice eight thousand dollars every year to these one armed bandits? Governments are well aware of the clear and present harm which they are doing to the community, with multiple studies undertaken and maverick NXT leader Nick Xenophon starting his career as a ‘No Pokies Independent‘. One major problem is that state governments have themselves become addicted to the taxes pokies bring in. Government revenue from gambling comes to $6B across the country, making up around 8% of taxation taken in by the governments of New South Wales, Victoria, Queensland, South Australia and Tasmania and 12% in the NT. Both major parties have also been given hefty donations from hotels and clubs, with $6.6M donated to Labor and $4.4M to the Liberal and National parties since 1998. This includes $3M just from Clubs NSW (split $1.2M to Labor and $1.8M to the LNP), the statewide representative group for the clubs which hold most of these machines. So there is quite an incentive to maintain the status quo.

 

Is it any wonder that the government’s committment to problem gamblers focuses entirely on overseas online sports betting, which accounts for only a small sliver of the gambling pie? Or that the most recent Productivity Commission report into gambling found that “people‚Äôs willingness to pay for gambling over alternative products reveals their underlying preferences” rather than addiction and so “gambling provides significant enjoyment for many Australians”, in a classic case of the economist’s ignorance of reality? Both governments and the parties who run them have been entirely captured by this callous industry which sells an illusion of glamour coating an exploitative core.