the vcgr spins it again

The Victorian Commission for Gambling Reform recently released their EGM annual figures, without a lot of fanfare or fuss. These figures detail Victoria’s spending on EGMs (electronic gaming machines, which in Australia means poker machines) for the 2010-11 financial year. And just like last year, the amount of spin that they’ve managed to pack into one short press release is quite outstanding.

Last year, if you recall, the press release was titled “Poker Machine Spending Continues To Fall,” when in fact it was the first drop in pokie spending in the state in six years. This year they’ve gone one better. The press release, which was issued in late July, is titled “Poker Machine Spending Up On The Year But Down Over Decade.”

Think about that. What does it mean? We’ve spent more, but not compared to the past ten years? Sort of.

Here’s the reality. We have indeed spent more on poker machines in the past twelve months; a little over $2.65 billion in fact, which is an increase of 2.1% on the previous year. And no, in case you’re wondering that’s not turnover, or bets, or some other less meaningful amount; that’s the amount of money kept by Victoria’s poker machines, before tax, after all the playing was done. That’s how much Victoria lost.

A 2.1% increase equates to an extra $54 million on the previous year. Another way of looking at it is that each poker machine in the state made over $2,000 more than last year. Industrious little buggers aren’t they?

But wait! cries the VCGR. It’s not really that bad; we’re really spending less! If you take population growth into account, spending per adult is down 7.4% over the past ten years! So we’re doing well!

Umm… no. You can’t do that. You can’t take one factor into account and ignore everything else. What about the fact that there are fewer venues and poker machines in Victoria now than there were ten years ago? What about the worsening economic position that our world has found itself in? Surely these would be conducive to less spending as well… but they’re not.

The grim reality is that we lose half a billion dollars more each year on poker machines now, than we did at the turn of the century… even with fewer venues and fewer machines. Population growth can’t justify that.

And nor can the VCGR.

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8 Responses

  1. mrtiedt says:

    Wow. More or less $500 per person. Take into account the non players and the very occasional players, then you can imagine how much money the problem gamblers are losing each.

    Scary stuff.

  2. cyenne says:

    Yep… the official line is $613 per adult in Victoria, per year. Throw in the kiddies and it comes “down” to around $500 a head. More outrageous poker machine mathematics! 😉

  3. Keep it real says:

    Tom

    Inflation for the year was more 2.1% so in real terms pokie expenditure in Victoria actually decreased.

    In fact in real terms Victorians lose some $400 million dollars less on pokies than what they did in 2000.

    But hey don’t the facts spoil you spin 😉

  4. cyenne says:

    Nice try, “Keep it real”. I always welcome visitors from ClubsNSW, thanks for dropping by.

    Given how desperate the VCGR are to show their figures in the best possible light, do you really think they just “missed” mentioning inflation in their press release?

    You can’t index poker machine spending for inflation. There are simply too many variables that can impact the bottom line. All you can do is look at how many dollars were spent.

    And spending has gone up.

    How very “ClubsNSW” of you to try and turn a $54 million increase into a $400 million decrease.

  5. Keep it real says:

    Tom,

    You do a great job of raising awareness about problem gambling and I am sure this site helps a lot of people. But you really should stick to topics where you actually know what you are talking about.

    The Productivity Commission saw fit to index poker machine spending for inflation (table 2.3). So your argument that it can’t or shouldn’t be done is complete rubbish. It’s the preferred way to compare expenditure across periods.

  6. cyenne says:

    Once again “Keep it real”, nice try. Fortunately I do have some idea of what I am talking about.

    Table 2.3 from the Productivity Commission report is the “Expenditure across forms of gambling over time” table. It displays REAL expenditure… the actual amounts spent in the time frames being displayed.

    That entire chapter of the report (A Snapshot Of The Gambling Industry) makes very little specific reference to inflation, other than to say that when inflation is considered, EGM expenditure has dropped marginally over the decade. The $400 million decrease you claim for Victorian gamblers is by no means a marginal amount.

    I do find it funny that, after your bosses have made every effort to discredit the Productivity Commission report and refute its findings, that you’re now using it to try and prove a point. You can’t have it both ways, no matter how hard you try.

    The thing is, the real cost of playing a poker machine has not kept pace with inflation. A $1 bet in 2001 is still a $1 bet today. If anything, playing a poker machine today is cheaper than it was a decade ago, especially as one and two cent machines have become the mainstay of the industry, supplanting the ten and twenty cent machines for popularity. Yet the amount being spent continues to rise.

  7. Keep it real says:

    Tom,

    You are making a fool of yourself REAL means adjusted for inflation as oppossed to the NOMINAL figures you are quoting (hence the “Keep it real” tag). Like I said you don’t have a clue what you are talking about.

    I used the Productivity Commission as evidence because its hold credibility with you I could quite as easily have quoted Australian Gambling Statistics produced by the Queensland Office of Economic and Statistical Research.

    Anyway don’t expect you to admit you are wrong, I’ll leave it at that

  8. cyenne says:

    Thanks for coming back, “Keep it real”, I suspected you might.

    I have always been able to admit to my mistakes… something I’m not sure you would. And you’re still picking and choosing statistics from a report you refute, to try and prove your argument.

    It’s interesting that you don’t refer to Table 2.7, which shows that EGM expenditure in Victoria has been relatively constant in REAL terms for many years… and which shows that EGM expenditure nationally has increased by 12% in REAL terms over the same period.

    It’s interesting that you don’t refer to Figure 2.6, which shows that the only significant decreases in EGM expenditure in pubs & clubs in REAL terms were caused by the introduction of smoking bans.

    It’s interesting that you don’t refer to Table 2.10, which shows that EGM expenditure per person in REAL terms has been rising steadily across the country for years.

    Don’t talk to me about spin, “Keep it real”… your employers are the masters at that. I could never come close.

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