$1 gambling cap

There’s been a lot of talk in the media these past few days about a specific recommendation in the productivity commission report into gambling. That is, the proposed $1 cap on poker machines. The suggestion is that all machines, across the country, be modified to ensure that the maximum bet per “button push” on any poker machine is $1.

I’m in favour of this, unequivocally. The majority of recreational, or non-problem, gamblers would be unaffected by such a move. Problem gamblers would benefit, no question there. I remember from my gambling days, I wasn’t a big better. Rarely went above a dollar a push, and that was usually 20 lines on a 5c machine. But if I won, or had plenty of cash on me, I’d up my bet… x2, x3, even x10. That’s a fast way to lose a lot of money.

Most everyone else likes this idea. Churches, politicians, gambling assistance groups, have all come out in favour of the concept. Of course, the usual suspects have criticized the $1 cap: Clubs Australia and the AHA, for example, and the Federal group who represent the poker machine manufacturers. Gee, I wonder why they object?

Clubs Australia, in particular, have specifically rejected the $1 recommendation. They refer back to a University of Sydney research report that found that “just 7.5% of problem gamblers bet more than $1 per play”. Oh really? Let’s dig a little deeper into this snippet of misdirection.

The report from Sydney Uni can be found here. There are a few things to consider:

  • the report was produced in 2001… yes, it’s 9 years old. Things can change a lot in 9 years.
  • the clubs and hotels that participated in the study were a “sample of convenience” and “should not be taken to representative of all clubs or hotels in metropolitan or rural areas of New South Wales”. By correlation, therefore, also not representative of the country as a whole.
  • participation in the study was by invitation only. The report recognises that a number of moderate and severe problem gamblers may have declined to participate in the study, which may have resulted in a biased sample of participants.
  • (on this point: as a reformed problem gambler, I know that I would have said “no” to someone asking me to take part in a study. I was ashamed of what I was doing and would never have got involved with something like this)

  • the report also recognises that participants may have modified their gambling behaviours while they were being studied.
  • (did you ever plan to do something wrong, knowing it was wrong, and then realise you were being watched?)

  • and finally, the study was limited to a particular poker machine, “Pirates,” which was a one-cent machine. The report mentions that the impacts may be different for players using higher denomination machines.
  • (well, obviously).

    So, with all that in mind… Sydney Uni found that 7.5% of the problem gamblers in their sample group would bet more than $1 a play. That’s not 7.5% of all problem gamblers… that’s 7.5% of the biased, unrepresentative sample group, in one area of one state, playing the lowest possible denomination machines.

    Hmm. Thanks Clubs Australia, for using such incontrovertible figures to back up your stance. Nice one guys.

    But I digress. I’m in favour of the $1 maximum-bet cap, but don’t be fooled by everything you read. Many commentators in the media have cheered this recommendation, and the “fact” that it would limit losses to $120 per hour.

    Wrong, wrong, wrong. That’s assuming a 90% return to the player. Don’t believe me? Read on…

    In Victoria, assume 3 seconds per “push”, or play on a poker machine. It’s actually lower than that, but I’m being generous.
    With a $1 cap, that’s 20 plays per minute, or $20 played per minute.
    Over an hour, that’s $1200 played. Yes, $1200… made up of money pumped into the machine, and credits won playing games.
    A 90% return from $1200 is $ 1080.
    The 10% taken by the machine would be $120.

    But life doesn’t work that way! That 90% return is over the life of the machine. It is not a guarantee for any given hour. There ARE no guarantees.

    If Joe Bloggs walked in off the street and spent an hour playing $1 maximum bets as fast as he could, and the machine only returned 50% of the take… poor old Joe would walk away $600 poorer.

    That’s $600. In an hour. With a $1 cap. And it could be worse…

    Not everyone’s fooled… Senator Xenophon gets it, as this article shows. Funnily enough, this article also talks about how the AHA general manager is arguing against the $1 cap, and guess what report he’s quoting from for backup? Looks like the AHA and Clubs Australia have been reading the same report.

    Look, the $1 maximum bet cap is a great idea. Just don’t pin your hopes on it being the silver bullet that will stop problem gambling in its tracks. It won’t do that, but it will have an impact, and will also have an even bigger impact on future gambling behaviours. After all, it’s not just today’s problem gamblers we need to help; it’s tomorrow’s problem gamblers we need to prevent.

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