green machines

The Australian media has been buzzing over the past 24 hours with the news that the Greens had weighed in on the issue of poker machine reforms. The official Greens policy, as put forward by Victorian Senator Richard Di Natale, calls for every poker machine in the country to have a maximum bet of $1, a $500 maximum prize and a “load-up” restriction of $20. No pre-commitment to be seen.

Senator Di Natale’s policy announcement received widespread coverage, from The Age and the Sydney Morning Herald to the Herald Sun and the ABC, and plenty more besides. It’s important to realise, though, that this policy is nothing new.

The current proposed reforms, being championed by Labor, Andrew Wilkie and Nick Xenophon, are a two-tier system. Mandatory pre-commitment would apply to high-cost poker machines, which are what we have now. And to avoid pre-commitment, venues would have the option of downgrading some or all of their poker machines to low-cost poker machines… with $1 maximum bets, $500 maximum prizes, and a $20 load-up limit.

Sound familiar?

I have long held the belief, and have said as much many times, that should these reforms become law, most venues would opt for low-cost poker machines. Converting pokies to this model is cheaper than installing pre-commitment, no card is required and the vast majority of pokie players (88%) would be completely unaffected. If clubs and pubs are worried about the fictional “licence to punt” driving their patrons away, then low-cost pokies are the obvious answer.

But as for whether to do away with pre-commitment altogether, and convert ALL poker machines to low-cost machines?

Well, why not?

Consider this.

When the Productivity Commission released their gambling report in June 2010, a $1 cap on poker machine betting limits was one of the key recommendations. This report was the result of years of intensive and widespread research, and is considered a landmark in gambling research in this country. I wrote about the $1 gambling cap at the time, barely a month after I started this blog.

Before the federal election of 2010, Andrew WIlkie campaigned on a platform that included the implementation of $1 pokies across Australia. This is the position he took into his discussions with Julia Gillard and Tony Abbott, when the election became a sudden-death play-off of compromise and negotiation. My write-up about this, from August 2010, is here.

Clubs Australia were quick to rubbish Wilkie’s stance on this. Executive Director Anthony Ball was light on for facts but was more than willing to sink the slipper in, claiming that Wilkie “clearly hasn’t bothered to read the most exhaustive report on problem gambling in Australian history”. Mind you, not only were Wilkie’s demands consistent with the report’s recommendations, but Ball himself has constantly rubbished the report, rejecting much of what it contains and claiming it was inherently flawed. This selective use of evidence is known as cherry-picking, and Ball and his crew are brilliant at it. My thoughts on this situation, written at the time, are here.

When Wilkie met with Julia Gillard, the option of mandatory pre-commitment was put on the table as an alternative to $1 pokies. History will tell that the Joint Select Committee that was formed after the Gillard-Wilkie agreement (and that I made my own submission to) went on to recommend both strategies as an integrated package of reforms.

The anti-reform campaign, led from the front by Clubs Australia (aka Clubs NSW), focused on mandatory pre-commitment and tried to pretend that $1 pokies didn’t exist. That they were fiction. That they were no more than a distraction. This misdirection is particularly obvious, when you consider that Victoria recently legislated a drop in the maximum bet for poker machines from $10 to $5… and not only was the legislation passed without a blip, but it was easily and economically enforced. Dropping bet limits in poker machines is not new, it’s not hard, and it’s certainly not expensive.

Changing Australia’s poker machine landscape in this fashion, with a $1 gambling cap across the board, would have no impact on the 88% of all pokie players who already play $1 or less every spin. So casual players will not be affected. They won’t stay away in droves, or migrate to the internet, or find ways around the scheme… or any of the other pokiegeddon scenarios that the industry are moaning about.

And the temptation to bet up big which often grips pokie addicts, especially when chasing losses or after a big win, would be removed. The volatility of the machines would be significantly reduced.

That’s quite a list of advantages. But there’s more…

The introduction of a $1 pokie cap would have some impact on existing poker machine addicts. Not as much as mandatory pre-commitment, but some. However, the big shift would be in the development of problematic gambling behaviours in the future. The pokie players of the future will start playing in an environment that is radically different to what we have now… lower stakes, lower prizes. It is, if you’ll pardon the expression, a paradigm shift. Altering the ability of poker machines to take in so much money so quickly, as well as removing the promise of quick riches (for $500 is hardly riches), will mean that pokie players in years to come will gamble differently to the pokie players of today. The social benefit of these changes will be far-reaching.

The gambling industry is well aware that much of their revenue comes from addicts; more, in reality, than the widely-accepted figure of 40%. One of the problems with assessing the harm of poker machine addiction is that pokie addicts generally don’t talk about it… so it can be hard to get an accurate idea of just how much is being spent. If regular pokie players can underestimate their spending by a factor of roughly 30 (as found in prevalence surveys referenced in the Productivity Commission report), imagine how much money poker machine addicts are actually spending. It’s frightening. The industry knows this, and they’re running scared. It’s why they try to say that revenue will be smashed by the reforms, not because problem gamblers will stay away, but because recreational gamblers will stay away instead. It’s a particularly stupid and transparent argument.

And a $20 load-up limit (restricting machines from accepting more than $20 at a time from a player) would not only drastically reduce the incidence of people pouring hundreds of dollars into a machine before playing (something poker machine addicts can be prone to). It will also decimate the money laundering industry that is flourishing in NSW. Criminals are regularly pouring large sums of money into pokies, then hitting collect. The resulting cheque is clean money. With a $20 load-up limit, this practice would cease overnight.

So yes, I’m in favour of a $1 poker machine cap across the board. I do believe in mandatory pre-commitment and I know it could work… but it is being so widely opposed by the industry and so blatantly vilified that settling for low-cost pokies could be a viable and publicly-acceptable alternative.

And I’m not the only one who thinks this.

Rev. Tim Costello, chair of the Australian Churches Gambling Taskforce: “I would have preferred just… low-loss machines where you just buy your distraction time. But of course Anthony and the clubs would be screaming at that. So this was actually a trade off that Andrew Wilkie and the Gillard government did to really help clubs, to say ok, well you’ve got your low-loss machines but you make your big winnings from these high-loss (machines), these are the ones that do the social damage.”

Dr Charles Livingstone, gambling researcher with Monash University: “The idea of moving to a $1 maximum bet is a very good option for minimising the harm of pokie-related problem gambling, and is supported by research funded by the gambling industry in 2001.”

But probably the biggest indicator that a national $1 cap on poker machines could work is that despite being easy and inexpensive to implement, with no impact on 88% of poker machine players and no need for any kind of card or pre-commitment, the industry (and the clubs industry in particular) continue to say it will cost billions of dollars, won’t work, and will destroy the industry and communities. They say this without any proof, and they say it every chance they get.

And let’s not forget that these reforms, whether they include $1 pokies, pre-commitment or a blend of the two, are not exclusive. They will not replace counselling, or self-exclusion, or education, or any of the other strategies that the industry hold up as being “better.” This is NOT an “either/or” situation.

If $1 pokies become law, there is NOTHING stopping the industry or our state governments from offering voluntary pre-commitment, for example. Nothing at all. And there is nothing stopping counselling services from continuing on, or self-exclusion programs. These things won’t stop once the reforms come into effect.

So while the Greens may be championing $1 poker machines, don’t forget that the concept has been around for some time… and without it, Wilkie wouldn’t have struck a deal with Gillard in the first place.


6 Responses

  1. Cathy says:

    What a bore this is all becoming. After being involved for such a long time with this I find it so frustrating being stuck in this revolving door of repetitive arguments. I could see early on that going for the full pre commitment over the original suggestion of a $1 bet limit was going to cause a lot of fuss (didn’t quite imagine it would be this bad though). As much as I saw the benefit of full pre commitment (and regardless of it becoming the hybrid proposal) I said back then it was probably better (less complicated) to get our foot in the door with the $1 bet limit. This being due to the antagonism the industry has always shown toward any real threat to their revenue. They have had a field day with the proposed pre commitment and I will be very sorry to see it go. As far as I am concerned the machines will still be addictive because of the nature of the product itself, however there will be a ceiling on possible losses which certainly is a far better deal than what we have now. Yes, counselling etc is fine but without the backbone of strong measures like $1 bet limits and/or full pre commitment/hybrid proposal it is just business as usual.

  2. I’m dead against machines that take notes. They have them in UK bookmarkers.

    These are fast track addiction machines. Mostly roulette wheels.

    It’s a business, everyone want’s their cut. If it was a moral issue, all machines would be removed, but it’s not.

    Socially, I think a “coin only policy” is a good compromise, but it takes away easy money.

    I like poker, there is a skill to it. Gambling addiction is still possible but it’personal nature, not the act itself.

    Bankroll management splits gamblers from non-gamblers, you can’t legislate for that.

    In theory I like the idea of $1 max bet. For most that will keep Pokey’s as entertainment.

    In reality, we live in a corporation where money is god. I’d rather gamble on a pokey than bet on politician’s to consider public interests.

    You may have success persuading people not to gamble but your government sells out to the highest bidder, and it’s not the public (Probably not even Australian).

    I’m going to sit on the fence on this one, outside poker I like my occasional flutter. I know the dangers through personal experience.

    “coin only policy” (COP)

    Now for the corny slogans…

    DIY COP’s for Pokey’s

    Pokey COP arrest addiction (geez I better stop now)

    Good coverage cyenne!

  3. Zvyozdochka says:

    It’s time for an ambit claim from The Greens and Xenophon/Wilke, $1/$500/$20.

    Turn some of the Clubs Australia argument back on them; if pre-commitment is “too hard” to implement and manage as they claim then $1/$500/$20 is the simple option.

  4. Libby Mitchell says:

    Mr Wilkie got the whole pokies gambling issue ‘up and running’ and that alone was a fantastic effort, never to be overlooked. Nevertheless Mr Wilkie’s reforms were a bit awkward, for 2 reasons.

    Firstly the provision of $1 bet limit pokies…when they were presented as ‘low value’ pokies…were still being offered with no other ‘check and balance’ or consumer safety mechanisms. The apparent assumption was that the $1 max machines were safe / OK to use and unlikely to cause addiction…but in my case they were not. I lost hundreds of thousands of dollars on ‘low value’ machines. SO have many other gamblers. We were all the addicts who were not meant to use ‘just a $1 bet’!

    Secondly the ‘high value’ machines that did provide the correct safety tools eg a pre-commitment card [ that also provided a transaction record; a private self – exclusion facility as well as a self-limit facility] was not accessible until AFTER a gambler had commenced his higher spending. By then, it would be mostly too late to prevent pokies addiction and besides, the limit could be set ‘any old how’ so much higher stakes gambling would continue unabated.

    The $1 bet limit for all machines is easier to cope with
    mentally for pokies gambling consumers and is also going to reduce some gambling overspending. However since 88% of pokies users already bet at $1 or below…the Greens model and also Mr Wilkie’s model would both be very much a case of ‘business as usual’.

    The only advantage as I see it of the ‘$1 maximum limit’ or Greens proposal is that it focuses on ALL gamblers as normal, equal CONSUMERS from the time they begin to gamble. It is a matter of perception. However that is all it achieves and really that is not much…since 88% of pokies gamblers would still have the same old problems as they now have.

    We should all be pushing for $1 bet limits for all pokies; $20 maximum load up limit of $20 [good point re laundering Tom] but not if the consequence of that is that pre-commitment is not accessible to ALL pokies gambling consumers.

  5. Libby Mitchell says:

    There is no getting around the fact that we have been conned by a gambling industry that has been allowed to get away with too many false or speculative ‘costs’ claims all through the discussion on this issue. The costs estimates especially have never been exactly quoted, have they? I am not aware of any accurate estimates. As in getting a full and transparent quote from businesses who deal in the technology.

    The conversion costs of machines from consumer-specific cards to coins in the 1990’s was undertaken by Tabcorp in Victoria with not one murmur. It was just done! Cost obviously was not an issue and the machines were altered within days / weeks…NOT months or years! Yet now, that same sort of cost is said to be the death of the gambling industry or at least some clubs? It is rubbish…yet it is said so often that we have all become a little afraid to challenge it I think.

    I prefer $1 limits across the board also because all pokies would be fully and equally accessible to all types of pokies gamblers. There would be less venue problems. Most worrying is the loss of a pre-commitment card as a ‘trade off’ for reducing all gambling machines to a $1 maximum betting limit.

    That would render these proposals to being quite useless for the vast majority of consumers. Until reliable costings can be proven by the gambling industry, we should stand firm and still demand mandatory pre-commitment….but for ALL pokies gamblers who need a basic suite of consumer protection tools, not just some who might be beyond using them.

    Frankly, every other industry pays its own way to provide its consumers with protections…transaction records especially, so any cost should by rights be a normal business cost for the gambling industry! Their patrons can pay for their own ID cards and that would help to defray costs also. Why should taxpayers foot the bill?

  1. October 27, 2011

    […] = ''; } More info…Facts not fiction on poker machine reformPoker Machine Reformgreen machinesFacts not fiction on poker machine reformPoker Machine Reformgreen […]

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