trust us, we’re clubs australia

You’ve got to hand it to Clubs Australia: they’re certainly consistent. For years they’ve been telling anyone who would listen that they’re the only ones who know how to help problem gamblers, all the while snarling and fighting like a cornered pit bull every time someone has the gall to suggest a strategy that may actually impact on the situation, and raking in billions of dollars every year in the meantime.

Their latest offering, a 34 page submission to the Victorian Competition & Efficiency Commission’s Inquiry into the Social and Economic Costs of Problem Gambling in Victoria, is no different. It’s a finely-crafted example of the best spin money can buy, and boils down to one simple phrase:

Trust us, we’re Clubs Australia.

Their submission was lodged with the VCEC almost a fortnight ago; you can find it here, on the VCEC website. This article in The Age today covered the general gist of the submission; however, just in case you don’t want to wade through the maze of tenuous connections, dodgy assumptions and outright falsehoods, here is a quick breakdown.

Productivity Commission Framework

First of all (according to Clubs Australia) the Productivity Commission inquiries into gambling from 1999 and 2010 can’t be trusted. Forget for a moment that they are widely accepted as the definitive, most comprehensive and detailed reports into the state of Australia’s gambling industry in general and poker machines in particular… nope, they’re no good. Three specific critics of the Productivity Commission are listed:

• The Institute of Public Affairs (IPA) who have a long history of opposing any form of additional regulation or preventative reform with regards to poker machines;
• KPMG, who just happen to be a major business partner of Clubs Australia; and
• A 2008 paper by Dollery and Storer which critiqued the Productivity Commission’s methodology. Never mind that Dollery and Storer also argued that the social and economic benefits of gambling had been overstated; as usual, Clubs Australia have cherry-picked the bits they wanted and discarded the rest.

The Norway experience (where slot machines were banned, and then replaced with video lottery terminals which used smart cards and government-defined spending limits) was also dusted off and trotted out, despite the fact that Clubs Australia’s claims in this regard have been comprehensively debunked.

Prevalence of Problem Gambling

The paper then moved on to the prevalence of problem gambling in Australia in general, and Victoria in particular. According to Clubs Australia there are fewer problem gamblers in Australia than first thought, and consequently the social costs have been “significantly overstated”. Their reasoning for this? “Recent research” by the IPA. Using this biased assumption as a launching point, they go on to point out flaws in the techniques used to measure and assess problem gambling, and conclude that the “true” Victorian prevalence rate for problem gambling is a tiny 0.4%.

The source of this data? Clubs Australia. Yes, they are using their own figures as proof to back up their claims.

Measuring the Costs of Problem Gambling

This is where the Clubs Australia submission moves into top gear. Apparently the bulk of “social costs” caused by problem gambling as “private intangible” costs, and should be excluded from estimates of the overall cost of problem gambling. This covers areas such as family breakdown and divorce, counselling, mental and economic hardship, mental and emotional distress, depression, suicide… the list goes on.

Clubs Australia justifies this approach by talking about the dangers of skiing. A slippery slope indeed.

And to back up this outrageous claim, they cite (of all things) the Henry Tax Review. Never mind that this review was focused on issues of taxation (hence the name), according to Clubs Australia it is the perfect methodology for calculating the social cost of problem gambling… no doubt because it drops the estimated social cost from $4.7 billion to $329 million. That’s a 93% decrease; no wonder the clubs love it.

Problem Gambling Impact Areas

In this section, Clubs Australia show their human side. They are concerned… not with the welfare of problem gamblers, but with the way “personal and family costs” are considered “policy-relevant”. They believe such costs should be excluded from the policy-making process.

There’s nothing more I can say about that. When a national organisation believes “personal and family costs” should have no impact on matters of policy, then everything else is superfluous.

Estimates the Social Costs of Problem Gambling in Victoria

The penultimate section of Clubs Australia’s submission attempts to redefine just how much problem gambling is costing Victoria. They again cling to the Henry Tax Review to justify their belief that intangible costs cannot be assigned a monetary value, and so should be excluded from questions of policy. And they kindly provide a set of figures that they consider to be “reasonably accurate estimates of the social costs of problem gambling in Victoria.”

Naturally these figures are significantly lower than anything the Productivity Commission had to say… and again, the source of these figures is Clubs Australia.

Trust’em, they’re clubs.


No surprises here. The Productivity Commission was wrong (except where they said things the clubs industry agreed with), intangible costs should be shunted to one side, and apparently the Victorian government makes 20 times more in a year in gambling taxes ($1.8 billion) than Victorian lose in social costs.

This submission is nothing more that a highly cynical, mercenary and materialistic melange of misinformation and greed. It is honestly frightening that Clubs Australia is responsible, in one way or another, for over 110,000 poker machines… more than half of the machines in the country. The dollar signs in their eyes and the need to keep their floundering industry afloat have blinded them to the reality of the pain and suffering that problem gambling and poker machine addiction causes… and they’ve let it happen.

Worse, they’ve helped it along.


4 Responses

  1. Chris says:

    If clubs with poker machines are banging on about “entertainment” how about the machines have a $1 limit with a governor of $120 per hour?

  2. Chisato says:

    Tom, I’ve just read the entire report which I wouldn’t have done if not for your critique. I cant agree with much of what you are saying. The concept of false positives and false negatives in prevalence studies is very real. Since overcoming my addiction several years, I’ve done quite a bit of research. I’ve wondered myself what the real problem gambling rate is given the gambling studies these days (at least in NSW where I live) are little more than a multiple choice survey. I fear your bitterness to the clubs is now clouding your ability to look at the issue of problem gambling with any objectivity. Hope your writing takes a turn for the better and less bitter.


  3. cyenne says:


    Thanks for your comments. If there is a bitterness there, it is no doubt based on an industry that will do and say anything to position themselves as the good guys in this debate.

    I don’t dispute what you say regarding prevalence studies and false positives/negatives. In fact, you’ll notice I didn’t refer to this at all in my overview of the Clubs Australia submission.

    However, the Productivity Commission report did look into this area in great detail, especially the incidence and impact of false negatives against false positives, how these could affect survey results and prevalence rates, and what they could mean for policy-making going forward. This is not an area that has been ignored at all.

    One significant flaw in Clubs Australia’s estimates is that they attempt to determine “problem gambling prevalence” across the entire adult population, including non-gamblers (who are the majority). This in itself gives a skewed result; taking poker machines as an example, only 25% (approximately) of the adult population use them at all, and only 10-15% of that group (again, approximately) use them regularly. Surely a more accurate figure for problem gambling prevalence for poker machine gamblers would exclude the 80% of the adult population who don’t use them, and therefore cannot by definition have a problem.

  4. Chisato says:

    Tom, I dont want to debate you and create an impression where you are the negative in this debate. I guess I just have a far softer attitude to the clubs…which doesn’t make me an apologist for them but rather perhaps just someone who’s addiction was less severe an therefore less personally damaging. The Productivity Commission relied on the existing prevalence reports so it doesn’t make sense for the clubs to apply false positives and false negatives to anything other than the existing rates.

    The Commission conceded false positives exist and have a bearing on the inaccuracy of the stats. Having acknowledged that…the PC then proceeded to do nothing with false positives and just present the existing prevalence rates. This was just one of many decisions the Commission made which I found baffling where they acknowledged short comings in the data or research but then relied on it anyway in their recommendations. I came away from reading the report with the perception that the Commission for whatever reason was reluctant to commission their own research. Research which could have addressed many of the data concerns it ironically had identified.

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