pre-commitment for pokies: the norway experience

Ah, Norway. Land of the midnight sun (well, one of them anyway). Think of Norway and you think of mountains, fjords and glaciers… and possibly 80’s pop sensation a-ha. Who would have thought that Norway would end up sending shockwaves through the gambling landscape of Australia?

The reason is simple. Norway is, to date, the only country in the world where mandatory pre-commitment for electronic gaming machines has been implemented. Electronic gaming machines, or EGMs, is the blanket classification that includes America’s slot machines, Canada’s VLTs, Norway’s slot machines (now banned) and IVTs, and our own poker machines. Early last decade, concerns were growing in Norway about the rate of problem gambling on slot machines, which were everywhere at that time. As a result, the Norwegian government took action. They banned note acceptors in slot machines from mid 2006, and in July 2007, slot machines were banned altogether. They were replaced 18 months later by interactive video terminals, or IVTs, which were networked and subject to full mandatory pre-commitment. You couldn’t play an IVT without registering for a card and setting limits on your spending. Sound familiar?

The Norwegian experience has been cited by both sides of the poker machine divide as proof that they’re in the right. ClubsAustralia often refer to Norway’s gambling industry as proof that poker machine players will migrate en masse to gamble on the internet, while supporters of the Wilkie/Xenophon-led reforms point to Norway’s IVTs as the model that our own poker machine industry should emulate.

So who is right? The only way to tell is to go straight to the source. “From Slot Machines To Gaming Terminals – Experiences With Regulatory Changes In Norway” is the title of a presentation that was made to the EASG conference in Vienna in 2010 by Jonny Engebø, senior adviser with the Norwegian Gaming Authority. It details the state of the Norwegian gambling industry and the impact that note acceptor bans and the removal of slot machines (and subsequent replacement by IVTs with mandatory pre-commitment) have had on problem gambling in that country.

Engebø’s presentation is brief but quite clear. For the 18 months that slot machines were banned, there was no significant increase across the general population in any other form of gambling in Norway. In fact, the opposite was true; participation in most other forms of gambling decreased during that period.

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Looking specifically at slot machine players, the same trend held true. There was a small increase in online gambling; before slot machines were banned, 8% of slot machine players also gambled online. That rose to 14% after the bans took place, which still means that the other 86% of slot machine players did NOT turn to the internet when their EGMs were taken away. In fact, from the presentation it would appear that they didn’t turn to any other form of gambling at all.

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Slot machine players were asked if they would spend more money on other forms of gambling after the bans came into effect. 94% said no. Two separate surveys revisited this question after the bans were put in place, and it was found that 91 – 99% of former slot machine gamblers were NOT spending more money on other forms of gambling.

Probably the most telling statistic is the volume of calls to gambling help lines in Norway. When note acceptor bans were put in place in mid 2006, calls to help services dropped by around 16%. When slot machines were banned altogether, call volumes dropped by a further 38%, and then again by 28% the following year. Overall, calls to gambling help lines dropped by 62% over the whole period, and once IVTs with mandatory pre-commitment were introduced to replace the banned slot machines, call volumes stayed low.

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Finally, the presentation looked at how slot machine players felt about the removal of all slot machines from Norway. The results were startling; 91% of all slot machine players in Norway were either happy that the machines had been removed, or didn’t care.

So, to summarise Engebø’s findings: removing slot machines altogether had little or no impact on other forms of gambling, was approved by the vast majority of slot machine players, and resulted in a drastic drop in the incidence of problem gambling (as evidenced by calls to gambling help services). When gambling machines were reintroduced with mandatory pre-commitment built in, the incidence of problem gambling remained low.

This certainly seems to coincide with the position put forward by proponents of Australia’s poker machine reforms. Additionally, it puts the lie to the claim, widely asserted by politicians and the gambling industry, that poker machine addicts will gamble on anything to satisfy their addiction. The vast majority of poker machine addicts are addicted to poker machines… not gambling in general. I made this point to the Joint Select Committee, and many others have said the same thing time and time again. Eventually they’re going to have to take notice.

So what of the claims being made by ClubsAustralia?

There are three statements I feel should be examined in light of what Engebø’s presentation tells us. The first comes from ClubsAustralia Executive Director Anthony Ball, and was made during his submission to the Joint Select Committee on Gambling:

The Norwegian Government admits that the rate of problem gambling has actually increased over the past 3 years. Not surprisingly, gamblers have simply switched from poker machines to the internet where credit card betting is allowed.

Mandatory pre-commitment in Norway has failed to deliver what it promised. The country is barely one third of the size of NSW, and yet the Norwegian Government has managed to link just 2,300 machines in the last 2 years. At that rate it’ll take more than 170 years to network all of Australia.

Engebø’s report says otherwise; and as a member of the Norwegian Gaming Authority, Engebø himself is a representative of the Norwegian government… so he would know, wouldn’t he?

Next is another statement from Anthony Ball, this time in an open letter on the proposed gambling reforms:

A ban on poker machines as Senator Nick Xenophon and more recently Andrew Wilkie have advocated would have little effect on the overall number of problem gamblers in Australia. The same can be said for their latest silver bullet to problem gambling, mandatory pre-commitment.

We know this because of the experience in Norway, which is the only country in the world to have mandated pre-commitment technology.

In July 2007, the Norwegian Government banned all 12,700 poker machines. At that time the machines were located in bars, supermarkets, shopping centres, airports and even petrol stations.

The consequence of this ban was not what the government expected. The rate of problem gambling actually increased from 0.7 per cent to 0.8 per cent of the population. Both the Norwegian Gaming and Foundation Authority and the largest independent research organisation in Scandinavia attributed the rise in problem gambling to an explosion in online gambling.

Twelve months later and faced with turnover on internet gambling exceeding that of poker machines at the time of their removal, the Norwegian government reintroduced poker machines into the community.

It is partly due to this experience that numerous academics and problem gambling counsellors have declared mandatory pre-commitment is destined to fail in its attempt to reduce problem gambling in Australia.

An explosion in online gambling? Really? Just 6% of slot machine players took up online gambling when slot machines were removed, in addition to the 8% who were already actively gambling online. Hardly an explosion! And notice that Ball makes it appear that “poker machines” were reintroduced in an effort to combat online gambling… this is not true. The removal of Norway’s slot machines and their replacement with IVTs was carefully planned and scheduled. The small increase in online gambling had nothing to do with it.

And finally, here is an excerpt from ClubsAustralia president Peter Newell’s address to the National Press Club, when he launched the “Un-Australian” campaign:

There are more poker machines in Crown Casino than currently in Norway and the Norwegian Government owns them all.

In 2007 it decided to withdraw every poker machine for a year, with the aim of returning machines with quite modest compulsory daily, and monthly precommitment limits set by the Government, not by the individual player.

Guess what happened in that year when there was not a poker machine in sight?

Problem gambling in Norway did not decrease one iota as players simply migrated to other forms of gambling, particularly the internet.

So if you take anything out of Norway, take that.

I don’t know if Newell was an a-ha fan back in the 80’s but if so, he should have stuck with “Take On Me” and left everything else from Norway well alone. A 62% drop in calls to gambling help services, but “problem gambling did not decrease one iota”? Oh dear.

It would be nice to give Newell, Ball et al the benefit of the doubt; maybe they didn’t know that Engebø’s report refuted everything they were trying to say. But if that’s the case, when why did they cite the Norway experience, over and over again, to try and support their own arguments? How can they justify doing so, if they hadn’t in fact read the report?

Sadly, I think the obvious conclusion is true. The facts are publicly available, and have been for some time. Norway’s experiences with problem gambling and mandatory pre-commitment have been reported in the media, and have been blogging fare for others before me… the most notable being PokieAct’s Paul Bendat, who wrote about this very topic the day after Peter Newell’s address to the National Press Club. As usual, ClubsAustralia were all too aware of the facts, and they picked and manipulated the figures to try and mislead not only Parliament, but their members as well.

ps: congratulations to anyone who noticed something strange about Newell’s statement to the National Press Club. Yes, he really did say that the Norwegian Government owns all of Crown Casino’s poker machines. Guess he should be a little bit more careful, no? 🙂

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1 Response

  1. Sue Pinkerton says:

    Way to go Cyenne! Blows their arguments out of the water.

    With regards online gambling and Norwegian citizens, you note the percentage who visited ‘foreign websites’ dropped down a couple of percent almost as soon as the increase started AND there was a GLOBAL explosion in both online casino’s and participants in online gambling at the time, so how much of the increase would have occurred anyway, we can’t tell.

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