xenophon’s speech to the gaming executive summit

With the AFL season behind us, Melbourne’s Etihad Stadium has become available for other uses. One of these took place recently when the Gaming Executive Summit Australasia was held there, from 12-14 October. One of the key speakers was our own Sen. Nick Xenophon, and his speech was an absolute cracker.

Here is the transcript of Nick’s speech. Enjoy.


When I first entered Federal politics, way back in 2007, I addressed a conference similar to this one, basically as a way of introducing myself.

A lot of people then saw me as some scruffy-looking upstart from South Australia, obsessed with the damage being done by your industry.

And they were right.

Today I continue to campaign against poker machines and the harm caused by gambling addiction.

A lot has happened in the last three years.

Back in 2007, it was a struggle to get Federal politicians motivated to act on this issue.

Kevin Rudd….remember him?

Well, he made all the right noises before the 2007 election saying, quote, he “hated poker machines and knew something of the damage they caused to families”.

Frustratingly though, Kevin didn’t actually get around to intervening and to better regulating your industry.

I think he was going to do it in ‘due season’.

But one of the things he did achieve was to ask the Productivity Commission to conduct an inquiry into gambling, a decade following the PC’s landmark 1999 report.

The latest report was handed down on June 23rd this year.

For some reason it didn’t get much air play that day.

It may have had something to do with events that unfolded in Canberra that night, that led to our first female PM.

Notwithstanding that temporary distraction, the Productivity Commission’s findings and recommendations are troubling for the poker machine industry.
And judging by some of the responses to the report by many of you and your peers, I’d say many of you were indeed troubled.

As you should be.

Reform of the gambling sector is inevitable.

As you would know, the Productivity Commission found that around 40 percent of losses on poker machines – and 40 percent of your profits on poker machines – come from problem gamblers.

In fact, the Productivity Commission said it could be higher than that, perhaps as much as 60 percent; but let’s stick with the conservative figure for now.

Of course, I suspect you all privately knew this even before the Commission’s report.

Although, Clubs NSW did try to argue in its submission to the Productivity Commission’s inquiry that “only” 23.1 percent of gamblers can be considered ‘problem gamblers’.

Well, you know what, that’s still 23.1 percentage points too many.

And at 23.1 percent, that means problem gamblers lose $800 million on Clubs New South Wales pokies alone, which flows straight through to the clubs of New South Wales’ bottom line.

That flow, that river of gold to pokies venues, results in a river of tears for so many.

Now, whether we’re talking 23 percent, 40 percent or 60 percent, that’s still many tens of thousands of people who shouldn’t even be on the machines to begin with.

Given Clubs New South Wales admits that problem gamblers are playing their machines, the question is how do we better protect players?

Now, in the past my critics have tried, I would argue fairly unsuccessfully, to paint me as a wowser or a moraliser.

I’m neither.

I simply believe that poker machines are an unsafe product that needs to be better regulated, and made safer.

It’s that simple.

I’m not trying to stop recreational players gambling on the machines.

I am simply trying to protect the hundreds of thousands of problem gamblers and those at risk of becoming problem gamblers from harming themselves with your dangerous product.

And we all know that it’s not just the individual playing your machines that’s affected.

It’s their families too.

It’s their partners.

Sometimes it is their bosses they steal from to fund their addiction.
The Victorian government’s own research found that 6,000 Victorian pokies gamblers admitted that their gambling led them to do something against the law.

Some of you have even tried to make your venues ‘family friendly’ in an effort to make your addictive product appear okay.

But in doing so, you have simply normalised an adult activity in the minds of many children.

I am glad to see both Coles and Woolworths have now agreed to the National Principles adopted by the State and Territory Gaming Ministers which says unequivocally that children should not be exposed to the sights and sounds of gambling.

And I am assured by the heads of both chains that their venues are being refurbished to protect children from exposure to gambling.

Kids learn what they live and children should not be privy to what is an adult-only past time.

But we must not pretend to ourselves that it is only children who are vulnerable.

Before politics, I worked as a lawyer.

It sickened me to see people losing their personal injury payouts to the pokies that seemed to take over virtually every pub in my state from the mid 1990s.

The final straw was when a client of mine, who was intellectually impaired, came to me in tears, hurt and confused because his so-called “friends” who ran the local pub didn’t want to be his friends any more.

For months they plied him with free drinks, even to the point where he was so intoxicated, they would push the machine’s buttons for him.

Their ‘friendship’ also included giving credit so he could keep chasing his losses.

They’d even picked him up from his small unit to take him to their venue…all so he could gamble away everything he had.
Almost 30 thousand dollars later, his money was gone and so were his “friends”.

I know that one dodgy pub does not make an unsafe industry, but an unsafe product does.

Since the cliffhanger Federal election, gambling reform has finally made it onto the national political agenda, thanks in large part to Tasmanian Independent MP, Andrew Wilkie, who negotiated a deal with the Prime Minister which will bring about the Productivity Commission’s mandatory scheme of national pre-commitment by 2014.

The reaction from the industry, specifically from Clubs Australia, was hysterical and deliberately designed to scare.

“They’re going to fingerprint every Australian and treat us all like criminals,” it’s Executive Director, Anthony Ball, claimed to the press.

It was nonsense of course, because no style of pre-commitment has been chosen by the Government yet – in fact, the Committee is due to hold its first meeting only next week, and there are plenty of models to choose from.

One – ONE – submission to the Productivity Commission talked about a bio-metric USB stick that only runs when a player runs his or her finger on it.

The fingerprint is retained only on the USB to activate it, and, to be effective, does not added to any sort of database, let alone a central database.

Yet, Clubs Australia came up with “They’re going to treat us all like criminals”.

Pathetic, but I wasn’t surprised by the tactics.

After all, that’s what these guys do.

They would rather run scare campaigns than debate the facts, because they know the facts are damning.

Ironically, the day before Clubs Australia launched its fictional finger-printing fear campaign, Andrew Wilkie and I had written to every Federal Member and Senator warning of such a campaign and advising them of the sort of spin that would be coming their way.

The first bit of spin the industry likes to fall back on is the claim that ‘only’ 0.5 percent of Australians are problem gamblers.

To use the Productivity Commission’s own words, claims like that are “misleading”.

Clubs Australia has also claimed that a system of mandatory pre-commitment for all poker machines would be “completely untested”.

Again, this is not true.

There have been results on full pre-commitment and sensible bet limits in Norway, as well as studies of optional pre-commitment in Nova Scotia.

There are also optional pre-commitment schemes being tested here in Australia, in Queensland and South Australia.

Clubs Australia would be aware of these studies – I’m sure many of you would be aware of these studies also.

So why tout these inaccuracies?

Why try to scare the public with lies, when we all here know that problem gambling is a real issue that needs to be addressed and pre-commitment will significantly reduce the harm caused by poker machines?

Could it be the $800 million? Or taking the Productivity Commission’s conservative 40 percent figure, could it be the $5 billion lost nationally by problem gamblers each year?

Clubs Australia has also argued that a full pre-commitment scheme would be an unfair burden on recreational gamblers.

They offer no evidence to support this claim.

However, there is significant evidence to prove that this claim is simply wrong.

For example, a Victorian Government study titled ‘Impact of Gambling Machine Characteristics on Play Behaviour of Recreational Gamblers, released in September 2009 concluded:

“From a recreational gambler perspective, it is quite apparent that the new policy decision of compulsory limits during play is not likely to adversely impact the gaming experience of recreational gamblers, as most indicate that this would only very marginally affect their play. Similarly, the same applies to the concept of having a compulsory set limit past a certain expenditure point – this was not seen as a major issue for recreational gamblers and hardly affected player enjoyment.”

Clubs New South Wales has also piped up, claiming that if their machines were made safer they would have to reduce their community contributions.

Much is made by clubs about these contributions, but the Productivity Commission has questioned the value of these claimed contributions, saying that many of the benefits go back to the club venues, not the community at large; and that the gross value of social contributions by clubs is likely to be significantly less than the support Governments provide to clubs through tax and other concessions.

In other words, according to the Productivity Commission, the clubs industry takes much more tax breaks than it gives back in community benefits.

Clubs Australia has also tried to argue that any move to make machines safer would cost jobs.

Again, the Productivity Commission rejects this.

It says that while “many people are employed in the gambling industry, most are highly employable and would be in demand in other parts of the service sector were the gambling industry to contract. In that sense, the gambling industries do not create net employment benefits because they divert employment from one part of the economy to the other.”
A report commissioned by the Tasmanian Department of Treasury and prepared by the South Australian Centre for Economic Studies found that:

“Gambling facilities employed an average of 3.2 persons per $1 million in gambling income, 8.3 persons per $1 million income from sales of liquor and other beverages and 20 persons per $1 million income from meal and food sales.”

So if you really want to create jobs in the community you should be arguing for less pokies venues, not more.

Poker machines are a net job killer, not a job creator.

Anthony Ball from Clubs Australia is on the record as saying he supports “people’s right to set their own limits on what they can afford to spend gambling”.

Well, a comprehensive pre-commitment system, as proposed by the Government and the Productivity Commission after 11 years of study of the impacts of gambling, will achieve this.

And what we do have finally is a Federal government that has agreed to intervene if the States, who unfortunately are hopelessly compromised by the taxes they receive from gambling revenue, do not act.

The fact is, and you well know it, the community today sees the harm caused by poker machines and the Federal Government is moving to better regulate the industry.

The Productivity Commission made a number of key recommendations and all of these will be part of the Federal Government’s Committee Inquiry, including the introduction of maximum $1 bet per spin.

Tasmanian Greens’ MP, Kim Booth, recently introduced a Bill into the Tasmanian Parliament to achieve this, and I have introduced a similar Bill in the Senate, which is also calling for the volatility of machines to be slowed.

Many of you might have read that hearings into the Tasmanian Bill got rather heated when Kim Booth defended his knowledge of the issue, after being questioned by a somewhat belligerent spokesperson from the local branch of the Australian Hotels Association.

Mr Booth rejected claims he didn’t understand the impact of the machines.

He said he’d seen plenty … like the time he walked into a venue to see an elderly blind woman playing a machine with her husband guiding her hand.

He called on pokies bosses to go with him and speak to the husband whose wife suicided as a result of taking the payroll and taking it down to the casino.

He then offered to take them down to the cemetery and show them some of the corpses of some of these victims if they’d like.

Your industry should have seen this backlash coming. You should have known people would eventually fight back after the enormous damage these machines have done.

So much has been lost by so many because of these machines…houses, savings, businesses, lives.

Your product is an unsafe product.

And I am tired of seeing your unsafe product causing so much harm.

When other products have been found to cause significant harm to a significant number of users they have been banned.

Poker machines make half their profits from people who are addicted.

People with an addiction do not exercise free choice.

Free choice is when you can rationally weigh up the costs and the benefits of your actions, and then you choose.

The people who make your industry so wealthy can’t do this because they are hopelessly addicted.

It’s not ‘entertainment’ or ‘gaming’.

The current state of you industry can only be described as an obscenity.

And it has got to stop.

Also, the potential for harm through online gambling is frightening.

Tim Costello summed it all up a decade ago when he said that, quote, “with internet gambling, you’ll be able to lose your home without ever actually having to leave it”.

So, parallel to the Joint Committee into Gambling and the implementation of pre-commitment technology, as agreed to between the Prime Minister and Andrew Wilkie, I have initiated a separate Senate Inquiry into interactive and online gambling, including sports betting, the potential for corruption and match-fixing, and the need to better protect consumers.
When I came to Canberra, I suspect many in this industry expected business as usual.

No-one expected one of the major parties to act.

But politics is unpredictable, and for those who thought common sense wouldn’t win the day eventually, well, you would have been delusional.

My message to your industry is simple; accept reform now.

This conference today, I see, has a prime focus on maximising growth of this industry.

But growth of this industry is unsustainable and untenable if you continue to be part of a business that knowingly exploits and destroys so many lives.

You have a clear choice here. You can either embrace reform and be constructive participants to tackle problem gambling, or you can fight change, knowing you are only delaying the inevitable.

At least you have a choice, which is a lot more that can be said for those whose lives have been destroyed by your dangerous products.


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