We all know how that turned out, don’t we? Despite a national media storm reporting the announcement as “fact”, the AFL had made no such commitment… and a day or so later, AFL supremo Andrew Demetriou faced the TV cameras and told “that bloke from Clubs Australia” (Anthony Ball) to Just Shut Up.

(Here’s what I wrote about the situation at the time. Very pleased that I published this the day before Demetriou’s press conference!)

It was a pivotal moment for the AFL. Although they neither supported nor condemned the reforms, they were now well and truly on the national stage in terms of gambling scrutiny. And as the spotlight intensified, the AFL started to pay closer attention to the encroachment of gambling in its back yard.

Sports betting, for example. More and more teams were seeking wagering sponsorships, with all the naming and branding rights that go with them, and stadiums were striking their own deals with regards to advertising and signage. The increasing association of AFL clubs with poker machines was also a worry; almost two thirds of AFL clubs nationally run gaming venues, and in Victoria only North Melbourne is pokie-free.

All this just created more headaches for the AFL, who are openly committed to providing a family-friendly competition. Now, more than ever, integrity was crucial; issues such as gambling in all its forms had to be addressed. It is to the AFL’s credit that they actually appear to be doing just that.

There have been some quiet changes. Gambling advertising is disappearing from the giant electronic scoreboards; it’s a fantastic move that’s been made with a minimum of fuss and publicity. At a club level, teams such as Geelong and North Melbourne have aligned themselves with organisations such as Gamblers Help and World Vision. And yesterday the AFL took another step towards disentangling itself from the gambling industry in a move that has instantly drawn national attention.

Demetriou, appearing as a guest on Channel Nine’s The Footy Show, announced that the AFL was willing to help its clubs sell off their poker machines. More than that, they’re planning to actively seek consortiums to take the pokies off clubs’ hands, should the clubs agree.

This is a brilliant proposal, and one that should be roundly applauded for more than simple altruistic intent. Reducing the number of poker machines operated by AFL clubs is great PR for the league and provides a massive boost to their integrity, but it also helps ensure the viability of many AFL clubs for years to come.

The reality is that for some clubs, poker machines are a curse rather than a blessing. North Melbourne’s involvement with pokies and Etihad Stadium cost it millions of dollars, which is no doubt why they’ve chosen to stay away from them since then. Other clubs are locked into leases and business arrangements that see them making a pittance from their machines… it is only the already-wealthy clubs such as Collingwood and Hawthorn that have been able to negotiate deals that see them reaping the rewards of their poker machine venues.

So giving clubs an “out”, a means of divesting themselves of their machines without financial repercussions, would be something many clubs would jump at. Add to that the uncertainty over the future of the poker machine industry, with legislative changes looming on the horizon and a definite shift in the public perception of the industry which could well lead to a downturn in spending on machines down the track, and the AFL’s decision starts to look better and better.

You only have to look to the NRL to see what can happen when gambling and poker machines become enmeshed with sport. Their clubs were dragged into the poker machine debate out of necessity, as in many cases it was poker machine revenue that allowed them to survive; the resistance was spearheaded by Penrith Panthers, who operate at a loss year after year despite raking in more than $90 million annually from their pokies. The reputation of the NRL has suffered as a result.

It needs to be said that this won’t reduce the number of poker machines or venues. The AFL is not talking about getting rid of their clubs’ pokies altogether… just selling them to someone else. The machines will continue to operate much in the same way they always have.

But if the clubs agree to the AFL’s proposal, and buyers can be found, then the AFL will have taken a massive and significant step away from the poker machine industry, and gambling in general. The clubs that do agree to the idea will no longer be compromised by the venues they run, and will be insulated from whatever legislative changes the future may bring. And supporters will no longer have to accept the fact that their teams are propped up by the gambling dollar… well, the poker machine dollar anyway.

Let’s hope the clubs play along.

For a breakdown of gambling involvement in Australian sport, please see gambling and your team.

For media reports about Andrew Demetriou’s announcement, check out these links:

AFL will help clubs clear out all their poker machines

AFL to help clubs sell off poker machines

AFL moots clubs getting out of poker machines

AFL wants clubs to dump pokies

Oh, please.

Australia’s poker machine industry is no different; in fact they’re long-practised at the dubious art of blocking anything that could impact on their bottom line, while at the same time professing to care about gambling addiction and raising themselves up as the backbone of the country. Social fabric, anyone?

Clubs Australia are at the forefront of this attempted revision of recent history. Having waged not one but two multi-million dollar attacks on poker machine reform, targeting marginal MPs and ultimately forcing a solution that they know will make no difference to Australia’s addiction to the pokies, they’ve now moved into the warm and fuzzy stage of their campaign. Sure, they’re still kicking Andrew Wilkie as hard as they can (because they know he’s still a threat to their addiction-based revenue) but now the focus is on the industry as champions of reform and friends of the addicted.

I kid you not. Why else would they issue a media release yesterday that contained no actual news, but lots of “Isn’t Wilkie evil?” and “Aren’t we awesome?” platitudes?

Their audacity is matched only by their denial. In the interests of historical accuracy, I’ve deconstructed their media release and provided a counterpoint to their claims. It’s the least I could do.

Clubs Australia’s statements are in bold; mine are interspersed throughout.

WILKIE NEEDS TO GET OUT OF THE WAY

ClubsAustralia has called on Andrew Wilkie to stop blocking genuine poker machine reform after his latest demand of the Federal Government.

No messing about. Note the use of the word “genuine”; the implication is that everything up until now has NOT been genuine.

Note also that the gambling reform bill that Wilkie is stalling on only covers voluntary pre-commitment for poker machines. Several trials of this technology have proven that it is only used by those who don’t need it, and the Productivity Commission clearly stated that pre-commitment had to be mandatory to be effective.

While clubs are getting on with the job of helping problem gamblers, Andrew Wilkie continues to issue political threats and demands on the Federal Government. It’s now clear that he is more interested in being on the front page of newspapers than supporting measures that help problem gamblers.

Oh, clubs are “getting on with the job” of helping problem gamblers, are they? So they’re voluntarily reducing bet limits? Shortening their gaming hours? Slowing down reel spin speeds? Lowering jackpots? Changing the poker machine playing experience?

Umm, no. They’ve implemented an expanded self-exclusion facility. People can now ban themselves from multiple venues via an online service. Nothing wrong with that, but it still places the onus of responsibility solely on the gambler. Gambling venues MUST have responsibility for the products they offer, but the clubs industry is far more interested in ensuring that their poker machines are protected, than in looking out for their patrons.

Throughout 2011 Andrew Wilkie threatened almost weekly to bring down the Federal Government unless they forced mandatory pre-commitment technology on poker machines.

That’s a little rich coming from the organisation that aimed its campaigns at marginal ALP electorates, mentioning MPs by name and threatening their political existence.

A trial in the ACT of this technology will now commence in February next year despite experience showing the technology has led to a huge rise in problem gambling in Norway, the only country in the world to have tried mandatory pre-commitment.

This is brilliant. Clubs Australia have been clamouring for a pre-commitment trial for months. They issued several media releases about a trial, went on radio and TV talking about a trial, criticised Wilkie and others for trying to proceed with pre-commitment without a trial… and now they’re bagging the concept.

Only three months ago, Clubs Australia issued another media release that opened with the following statement:

“Clubs Australia is encouraged by the Federal Government’s commitment to a full and proper trial of mandatory pre-commitment on poker machines in the ACT’s 60 clubs.”

Yet now they attack it. For the record, Norway does NOT have mandatory pre-commitment; their government controlled gambling machines have government-imposed spending limits. And they have not experienced a “huge rise” in problem gambling as a result. I’ve written about this before, more than once.

Clubs Australia Executive Director Anthony Ball said even though Andrew Wilkie has secured a trial, he is reverting to form by trying to bully the Federal Government.

Wilkie didn’t want a trial. That was Julia Gillard’s counter-offer. And accusing him of bullying tactics? Pot, meet kettle.

“Andrew Wilkie appears to have no idea what he actually supports when it comes to gambling reform and how to gain support for it.

“He has refused all industry offers to meet with him to discuss problem gambling and continues to threaten the Federal Government if they don’t agree to his ever changing position on poker machine reform.

Wilkie campaigned for the 2010 election on a platform that included $1 maximum bets for poker machines. Following his agreement with Gillard, that became a combination of mandatory pre-commitment and $1 maximum bets.

Which is pretty much what it is today.

I should also mention that others in the clubs industry (notably Jeff House, boss of Clubs ACT) has publicly stated that they would not deal with Wilkie, that he was not part of the process. Wonder how that ties in with all of these “industry offers” to discuss problem gambling?

“Two weeks ago he set the Government a deadline of 5pm that Friday. This weekend he again made threats, giving the Government 14 days to agree to an entirely different gambling policy.

“An entirely different gambling policy”? Rubbish. This is completely untrue.

“Last year Andrew Wilkie wanted to force the Government to support mandatory pre-commitment. This year it’s all about forcing them to support $1 maximum bets on poker machines.

Again the revision of history. The policy was mandatory pre-commitment for high-intensity poker machines, and no commitment for low-intensity poker machines with a $1 maximum bet. Now that that’s been knocked on the head by the government, Wilkie wants to ensure that $1 maximum bets are in place as a fallback if mandatory pre-commitment doesn’t get up. Not so different at all.

And for the record? Mandatory pre-commitment was the government’s suggestion in the first place.

“It’s clear Andrew Wilkie has absolutely no idea how to stop a problem gambler from gambling and no interest in working on real solutions. He is only interested in threats and headlines.

This shows how out of touch the clubs are with the reality of the situation. Poker machine reforms are intended to reduce the incidence of gambling addiction; it’s about prevention first and foremost. Their continual focus on “stopping problem gamblers” completely ignores the fact that the best way to stop a problem gambler is to prevent the addiction from taking hold in the first place.

No one is born a poker machine addict; it’s something that develops over time, sometimes quickly, sometimes slowly. Yet every single poker machine addict was once a recreational player.

Wilkie and others are, in my opinion, focused NOT on stopping a “problem gambler from gambling” but on reducing problem gambling (specifically poker machine addiction). Two very different things.

“For a man that secured just 14,000 votes at the last election to think he has the right to regularly threaten the Federal Government reveals a character which is completely unsuitable for Federal office.

Ah yes, this is an oldie but a goodie. Why not just go ahead and say our preferential voting system is unfair, Anthony? Because that’s what you’re implying. Wilkie was the most preferred candidate in his seat, and so he won. Just like all the other sitting MPs.

And just when did Clubs Australia become the authority on suitability for Federal office?

“I’ve heard it called political opportunism. I think political delusion is a far more appropriate description,” he said.

Oh very droll. Completely meaningless but I can only assume it sounded good when he thought of it.

And that’s it. There is not one statement that can be considered anywhere close to being news; not one statement that cannot be contested and dismissed. This is little more than a clumsy ham-fisted PR exercise, aimed at portraying Wilkie as an obstacle to poker machine reform, and Clubs Australia as the ones who really care.

Whereas the reality is that it’s the other way around.

The article opened with this line:

With pokie revenues in decline, venues find creative new ways to lure punters.

Excuse me? I didn’t realise poker machine revenues were in decline. I scanned the rest of the article for some justification for this statement but none was forthcoming; not surprising though, as this was a restaurant-based article. But Clubs Australia CEO Anthony Ball was quoted as saying:

There’s now a lot of competition for people’s disposable income so clubs have been diversifying and changing their business strategies to include better food, accommodation and other innovative things, particularly to attract families.

I thought about this for a while. Seems to me that the implication from Ball (and article author Sue Williams) is that clubs now have to compete with other entertainment options, and that this is behind not only the drive to diversify, but also the alleged drop in poker machine revenue.

Not sold on that, personally.

The second article was a press release from market research corporation Roy Morgan. They regularly release the Roy Morgan Gambling Monitor, in which they make pronouncements and predictions about gambling revenue based on market research surveys that they carry out.

The latest Roy Morgan Gambling Monitor stated that Australians spent $10.3 billion on poker machines in the 12 months to March 2012, which was a sharp drop from $12.3 billion in the 12 months to March 2011. Sharp indeed; that represents a drop of over just 16% in 12 months.

I’m not sold on this either. Roy Morgan source their figures from market research surveys, not actual financial information, and everything I’ve seen shows that poker machine spending is still increasing, and is certainly not in decline. Sure, maybe they look at the data in a different way… but the report containing this data costs $9,500. It’s a little out of my price range. But on the face of it, their assertion that poker machine spending has dropped by $2 billion seems a little odd.

So I decided to take a look.

Unfortunately, not every poker machine jurisdiction in the country makes their financial information available. The Northern Territory, the ACT and poker machine giants NSW obstinately refuse to publish revenue figures for poker machines. That, however, is not the case for the rest of the country. I was able to extract and collate figures for Tasmania, South Australia, Victoria and Queensland, and the tale they tell is compelling.

The Good

The good news is that, in some states, poker machine revenue is indeed in decline… if only marginally.

In Tasmania (according to the Tasmanian Department of Treasury and Finance), there has been a decline in poker machine revenue of around 3.3% over the past 8 months (since the beginning of the 2011/12 financial year). That equates to a drop of approximately $4.9 million from the previous period, from $146.8 million (July 2010 – February 2011) to $141.9 million (July 2011 – February 2012). Further information is not available, but there is a steady if small decline from month to month.

Tasmania poker machine spending

In South Australia (according to the South Australian Office of the Liquor and Gambling Commissioner), there has also been a drop in poker machine revenue since the beginning of the 2011/12 financial year. South Australia publishes data quarterly, and only data for the first half of the financial year is available; but from this, there has been a decline in poker machine revenue of around 1.1% over this 6 month period, when compared to the first half of the 2010/11 financial year. That equates to a drop of approximately $4.35 million, from $389.7 million (July 2010 – December 2010) to $385.3 million (July 2011 – December 2011).

South Australia poker machine spending

The reduction in poker machine revenue in Tasmania and South Australia may be small, but it is still a decrease on previous earnings. This is not the case for Victoria or Queensland.

The Bad

In Victoria (according to the Victorian Commission for Gambling and Liquor Regulation), there has been an increase in poker machine revenue of around 1.5% in the 12 months to March 2012. That equates to a jump of approximately $39.3 million from the previous period, from $2.636 billion (12 months to March 2011) to $2.676 billion (12 months to March 2012).

What’s more disturbing is that since November 2010, poker machine revenue in Victoria has increased every month bar one, when compared to the same month the previous year. And poker machine revenue in February 2012 ($202.9 million) and March 2012 ($228 million) was higher than for any other February or March since poker machines were introduced to Victoria 20 years ago.

In fact, Victoria is very close to recording an all-time high for poker machine spending in a financial year.

Victoria poker machine spending

In Queensland (according to the Queensland Office of Liquor and Gaming Regulation), there has been an increase in poker machine revenue of around 4.04% in the 12 months to March 2012. That equates to a jump of approximately $74.57 million from the previous period, from $1.84 billion (12 months to March 2011) to $1.92 billion (12 months to March 2012).

That’s a massive increase, almost double Victoria’s increase, but more alarming is the trend. Poker machine revenue in Queensland has been increasing month-to-month since the 2009/2010 financial year; every month has seen an increase on the same month the year before. This shows a steady and consistent increase in poker machine spending in Queensland.

Queensland poker machine spending

The combined increase in poker machine revenue in Victoria and Queensland ($113.8 million) over the past 12 months more than offsets the modest combined decrease in revenue in Tasmania and South Australia which, when adjusted to allow for the fact that they only cover a partial period, comes to around $16 million.

This suggests that there has in fact been a significant increase in poker machine revenue, not a decrease as has been stated; and it is the states with the strongest and most pervasive poker machine industries that are leading this surge in spending.

The Ugly

This suggestion naturally leads to the question mark that is NSW. As I said earlier, the NSW Office of Liquor and Gaming Regulation does not release financial information about the poker machine industry. That’s a real shame, as with more than twice as many poker machines as any other state, it would be informative to analyse NSW’s poker machine revenue over time and see exactly what is happening there.

Without access to the NSW OLGR’s data, I decided to take a look at a number of annual financial reports from clubs around NSW and see what they said. I chose the clubs movement as they are the strongest sector of the NSW poker machine industry, with fewer restrictions and regulations than the hotel industry.

I looked at Dee Why RSL, King of Clubs (Campbelltown Catholic Club), Parramatta Leagues Club and Blacktown Workers’ Club. I also looked at the annual reports for the Panthers and Mounties groups, as they both encompass a number of venues.

The results were in keeping with what is happening in both Victoria and Queensland. While the Panthers group had a decline in poker machine revenue of 0.33% (or $299 thousand) and Parramatta Leagues Club had a decline in poker machine revenue of 2.74% (or $1.3 million), the other clubs all showed strong growth over the past financial year.

Dee Why RSL had an increase of 7.68% ($2.5 million), the Mounties group had an increase of 11.13% ($7.26 million), Blacktown Workers’ Club had an increase of 5.45% ($1.89 million) and King of Clubs had an increase of a whopping 14.66% ($3.67 million).

Between them, these six clubs/groups recorded an increase in poker machine revenue of $13.7 million over the past financial year, which is a 4.6% jump; far more than was seen in Victoria or Queensland.

Admittedly this is only a subset of venues in NSW, but the trend of increasing poker machine revenue is consistent with the other states that have a high number of poker machines. As such, it is not unreasonable to suggest that nationally, poker machine revenue is continuing to rise and that this increase is driven by the three states with the most machines.

In fact, far from falling to $10.3 billion it seems likely that poker machine revenue in Australia is pushing onwards and upwards, and may even be approaching $13 billion, a record that would surely be an indictment on the industry.

This is not an industry in decline. Despite all efforts to persuade us otherwise, spending on poker machines continues to rise. Poker machine gambling still dwarfs every other form of gambling in Australia, and unless changes are made, always will. Given the high concentration of poker machines in low socio-economic areas (a circumstance that is repeated in every state in the country), this is a problem indeed.

When Harry Jenkins resigned from his position as Speaker of the House of Representatives five months ago today, the chorus of voices predicting the death of poker machine reform was deafening. The argument was that with an extra vote in the Lower House, Labor was no longer beholden to Andrew Wilkie or his demands for reform. Never mind that poker machine reform was popular with voters from all states and parties; a bullocking industry campaign targeted at marginal ALP electorates had made the government very nervous about pursuing this reform package. Jenkins’ actions were seen as giving Julia Gillard’s party a way out.

This perspective was reinforced when Peter Slipper assumed the Speaker’s role. Not only did Labor gain a vote in the Lower House, but the Coalition lost one. The balance of power shifted perceptibly towards the government and poker machine reform seemed doomed.

A day may be a long time in politics; five months is an eternity. While history shows that Gillard did indeed walk away from the letter of her deal with Wilkie, resulting in the termination of their agreement, no one could have predicted the events of the past month. It seems Wilkie may yet have the final say in this matter.

The game began again in earnest in March. Having devised a weaker gambling reform bill as an alternative to their original arrangement, it turned out the Government still needed Wilkie’s support to get the bill passed in parliament. Wilkie stonewalled, demanding significant changes, and although the Government was desperate to table the bill before the Easter parliamentary break, it was put on hold. Negotiations started between Wilkie and Macklin to try and come to some form of compromise. Wilkie insisted that the bill include the capacity to make pre-commitment mandatory, as well as the provision for $1 maximum bets as a fallback measure. He gave Macklin a deadline of last Friday, and as the deadline expired, Wilkie received Macklin’s final offer. He announced that he would think about it.

Then came “Slippergate”. Allegations of sexual harassment and Cabcharge rorts against the new Speaker were splashed across every News Limited paper in the country, and as the media worked itself into a frenzy, Slipper decided to stand down from the Speaker’s role.

The balance of power shifted again. Suddenly Wilkie’s vote meant more to the Government than it had the week before, and he knew it. Slipper’s unfortunate circumstances had once again elevated Wilkie to a position where he held the cards. It was a lucky break for Wilkie, whose decision to deliberate over his response to Macklin’s amendments was masterful in hindsight.

But where to from here? Gillard’s government does not introduce any legislation that it thinks will be defeated. At the same time, they cannot afford to cave in completely to Wilkie and reverse their position yet again on poker machine reform; to do so would be to admit that they are not so much a minority government as a government held hostage.

But to do nothing is not an option. The public wants reform; the results from an exceptionally well-timed survey by independent research firm AMR (on behalf of the Stop The Loss Coalition) show that 70% of Australians want mandatory pre-commitment for poker machines, and a whopping 83% want $1 maximum bets. And doing nothing means losing Wilkie’s support, possibly for good. The uncertainty over Slipper’s future makes that an untenable position.

But there is still a way out; a third alternative that may yet be the best of all worlds for Wilkie, Gillard and the public who have reinforced that what they want is action.

The key is not the Government’s bill, which only covers voluntary pre-commitment. It is a separate bill, a private bill that was introduced into the Senate in March by Senators Xenophon, Madigan and Di Natale. This is the Poker Machine Harm Reduction Bill, which covers $1 maximum bets and $500 jackpots.

It’s no secret that $1 maximum bets was Wilkie’s original preference, well before he struck his deal with Gillard, and he has been extremely vocal on the subject in recent times. What’s not so well known is that pre-commitment (mandatory or voluntary) and $1 maximum bets for poker machines are not mutually exclusive. They can co-exist without any trouble at all.

Wilkie’s best chance now is to promise his support for the Government’s amended gambling reform bill, in exchange for a guarantee from Gillard for ALP support for the Senate bill. With the backing of the ALP, the Greens and Independents, the Senate bill would easily pass both houses, negating the need to include $1 maximum bets in the Government’s proposal. And with Wilkie’s support, the government’s bill would also pass comfortably.

The game is not over yet.

The point, as Anglicare Tasmania CEO Chris Jones explained, was to break up the gambling experience. As he said:

“If they want a break, they can sit elsewhere, but they don’t need to take a seat in front of a machine.”

Not surprisingly, Clubs Australia came out swinging. Media boss and spokesman Jeremy Bath cranked the over-reaction dial up to eleven when he responded to the idea with this:

“It’s clear there is an element of the church that has been hijacked by the anti-gambling lobby and whose recommendations are more about physically punishing problem gamblers than helping them.”

I don’t think anyone really believes that removing chairs from gaming rooms is part of some covert plot to “physically punish” poker machine addicts… and besides, from what I’ve seen the industry is already doing a pretty good job of that themselves!

Me? I like the idea. So long as there were stools available that could be brought out, upon request, for those who need them, what’s wrong with it? Heck, I know how easy it is to settle into that chair, lean back and let everything slip away… so if standing up might help, then why not?

But it got me thinking. Good poker machine reform has to be about changing the playing experience. The best and most obvious way of doing that is to change the machines themselves, and I unequivocally believe that this has to happen. But there’s another way of changing the playing experience that can happen right now.

Let’s make gaming rooms food-free, drink-free, alcohol-free zones.

Why not? They’re already smoke-free, much to the disgust of the industry which dragged their heels on THAT one for as long as they could. They still moan about the drop in revenue that happened when smoking bans kicked in… never mind the whole cancer/emphysema thing, or looking after their patrons.

So let’s go one step further. No eating or drinking in gaming rooms. At all. If a poker machine player wants a drink or a bite to eat, then there’s nothing stopping them from walking out of the gaming room and into the bar, bistro or restaurant, and satisfying that need.

This isn’t a new idea, and it’s not an attack on anyone’s rights. Who can honestly say that they would fight for their right to eat hot chips while playing a poker machine? That’s bordering on absurd. And it’s not like there’s any shortage of food or drink in these places… we’re talking about pubs and clubs after all.

It would be more hygienic too. Imagine all those drinks spilt, all those greasy fingers from bowls of chips pressing the buttons… no need for that any more. A more pleasant and mess-free environment for everyone.

And in many ways it’s a merger of the responsible service of alcohol with the responsible service of gambling. No drinking while gambling. Simple, and far easier for staff to understand and implement.

So how about it? Should poker machine rooms become food/drink-free zones? It just may encourage people to take a break from their machines once in a while… a concept everyone, from the counsellors to the advocates to the government to the industry, supports. It may help prevent some people from developing problems with their gambling, while we wait for the fundamental machine reforms to kick in.

And it wouldn’t cost a single dollar to implement.

What do you think?

The GTA (in their own words) are a “not-for-profit company limited by guarantee”. Their members include Ainsworth, Aristocrat, IGT and Konami, to name a few… in fact, all of Australia’s poker machine manufacturers and suppliers belong to the GTA.

It is the GTA that concocted the outrageous cost estimate of implementing poker machine reform. Most recently, they used their submission to the Federal Senate’s Joint Select Committee on Gambling Reform inquiry into problem gambling prevention and treatment to reinforce this fiction.

In their submission, the GTA asserts that:

“The cost of upgrading machines for pre-commitment would exceed $3 billion for gaming machines alone.”

And:

“Whether for a $1 Maximum Bet or for Mandatory Pre-Commitment, the costs of changing gaming machine software are about the same.”

These statements summarise the GTA position on modifying poker machines for either pre-commitment or $1 maximum bets. They are based on faulty logic and incorrect assumptions and should be summarily dismissed.

The fundamental error in the GTA’s figures is that they assume that all of Australia’s poker machines will be reconfigured immediately. In their submission, they discuss the cost of upgrading poker machines in NSW and Queensland, and conclude:

“The cost of an immediate reconfiguration of this inventory would exceed $2.5 billion.”

Additionally, in their media release dated 9/11/2011, the GTA asserted that the total cost to change Australian poker machines to $1 maximum bets was in the vicinity of $3.25 billion.

This conclusion ignores that fact that any legislative changes regarding poker machines, whether they be for pre-commitment or $1 maximum bets, would not take effect until (at this stage) at least 2017. That means that over the next 4 years, any new poker machines could conceivably be designed to support pre-commitment or $1 maximum bets, with NO conversion costs. Indeed, this was the approach taken recently when Victoria passed legislation that lowered the maximum bet from $10 to $5.

This conclusion also ignores the natural replacement cycle for poker machines in Australia. In their submission to the Productivity Commission, dated 18/12/2009, the GTA spoke of the time-frame for the routine replacement of poker machines in Australia. They stated:

“Almost all gaming machines in Australian states and territories are routinely replaced over a 10 year cycle.”

It therefore stands to reason that approximately 10% of Australia’s poker machines are routinely replaced every year. It also stands to reason that these would be the oldest machines, for the GTA’s statement to be true.

Applying this premise to the GTA’s calculations yields some interesting results. Rather than use the figures from their submission to this inquiry (which were only for NSW and Queensland), I will use the figures from their 9/11/2011 media release.

In that media release, the GTA stated:

Australian gaming machines -

Cost to change to $1 bet limits/$500 payout limits

a) 25% (50,000 gaming machines) less than 3 years old = around $5,000 per machine ($250 million)
b) 25% (50,000 gaming machines) 3-5years old = $10,000 per machine ($500 million)
c) 50% (100,000 gaming machines 5+ years old = $25,000 per machine ($2.5 billion)

Total cost = $3.25 billion

Using the GTA’s own stipulation of a 10 year routine replacement cycle, by January 1 2017 approximately 40% of Australia’s current poker machines will have been replaced. Again, it is expected that these will be the oldest poker machines.

If poker machine manufacturers begin incorporating legislative changes into their machines from January 1 2013, then by January 1 2017 we would have the following scenario:

• 40% (80,000 gaming machines) configured to support pre-commitment / $1 maximum bets. No conversion costs ($0).
• 25% (50,000 gaming machines) requiring software changes only. Conversion costs of $5,000 per machine ($250 million).
• 25% (50,000 gaming machines) requiring software/hardware changes. Conversion costs of $10,000 per machine ($500 million).
• 10% (20,000 gaming machines) requiring replacement. Replacement costs of $25,000 per machine ($500 million).

Total cost = $1.25 billion

Even without challenging the GTA’s figures for software and hardware changes, it can be seen that their estimate for conversion is inflated by $2 billion.

They’re a lure to play. When you see that big sign with the numbers ticking over, often in the thousands of dollars, who wouldn’t be tempted to drop in a few dollars and try their luck? Jackpots are a tried and tested method of getting people in front of the machines, even though the chances of actually winning the “big one” are millions, sometimes billions to one.

The industry knows it. The current proposal to introduce $1 maximum bets includes a reduction in the maximum jackpot amount to $500 (down from $10,000). This has been vigorously attacked by Clubs Australia; their CEO, Anthony Ball, has been extremely vocal on the subject. As he wrote on The Drum last year: “Who would play a machine where the most you could win was $500?” Clubs Australia even issued a media release in January this year attacking the Greens for “hiding” the “bad news” about jackpots.

The manufacturers know it too. All of the big poker machine manufacturers have their own jackpot systems that work with their machines. Every year existing jackpot systems are refined and new ones introduced, because they know that jackpots are a lure to get people playing. And once they’re playing, statistics show that many of them don’t stop.

Everyone thinks that poker machine jackpots are a bonus prize, an “extra” that you can win on top of whatever your machine might pay you… but this isn’t true. Poker machines never pay out more than they have to, and that includes jackpots. The truth of the matter is simple.

Jackpots are a con.

It works like this. Poker machines have to return a certain percentage of all money bet to the player, over time. This is called the return to player (RTP) determined by legislation and is different for every state and territory. Right now, the percentages look like this:

ACT – 87%
NSW – 85%
NT – 85% for clubs, 88% for casinos
QLD – 85/92% for clubs/pubs, 90% for casinos
SA – 85% for games installed before 1/10/01, 87.5% for games installed after 1/10/01
TAS – 85%
VIC – 87%
WA – 90% (casino only)

That seems high… but as I explained last year, any poker machine can pay out exactly what they’re supposed to, and still take all your money. Simply put, most poker machines have to return 85 – 90% of all bets to the player.

Jackpots are included in this. They are not some generous bonus prize, but are paid for and incorporated into that RTP percentage.

Every time someone plays a game on a poker machine with a jackpot, a small amount of money is added to the jackpot. That money counts as part of the RTP. And what THAT means is that the actual money returned to players during normal game-play on jackpot-enabled poker machines is LESS than the legislated minimum.

And it’s legal.

What does this mean? Well, it depends on the jackpot. There are two kinds of jackpots for poker machines; stand-alone, and linked.

Stand-alone jackpots only apply to a single poker machine, and are usually displayed above the screen. If you’re playing a poker machine with a stand-alone jackpot, you’re the only person who can win it. So if you’re in Victoria (like I am) where the legislated minimum RTP is 87%, it’s common for stand-alone jackpot poker machines to pay a small percentage (3%, for example) into the jackpot pool, and the rest (84%, for example) to the player. This isn’t such a big deal, as it’s all happening on the same machine for the same player. But the jackpot certainly isn’t any kind of bonus prize; it’s offset by the fact that the poker machine returns less in regular game-play.

Linked jackpots are a little different. This is where multiple poker machines (usually four or more) are linked to a single big jackpot. That’s when you get the big sign over a bank of poker machines displaying the jackpot amount; any of those machines is eligible to win that jackpot.

Money is added to linked jackpots in the same way as it is to stand-alone jackpots; the only difference is that it takes that money from all of the machines connected to it. Every time someone plays a game on any of the poker machines attached to a linked jackpot, the jackpot goes up.

Again, this means that a linked poker machine will pay a small percentage into the linked jackpot, and the rest to the player. But now you’re competing against all the other players… and if you don’t win (and let’s face it, these big jackpots hardly ever go off) then you’re stuck with a poker machine that’s paying you less than the legislated minimum.

Still legal.

Some linked jackpots only take 2% or 3% from a poker machine’s RTP. That’s bad enough, as it decreases the chance of winning anything and, therefore, increases the chance of losing. But some take far more.

I dropped in to a poker machine venue near my work this morning to take a look. Yes, it was open at 8am and yes, there were half a dozen people playing… that’s a story for another day. But I pressed the “information” button on a one-cent Oceanus poker machine, one of several attached to a Grand Central jackpot worth more than $9000. This is what I saw.

While this poker machine had a “theoretical” RTP of 93.07%, which was higher than the minimum, 9.49% of that was being returned to the jackpot. The rest (83.58%) was what was being returned to the player.

Some machines are even worse. Gaming machine approval records show that there are poker machines out there (such as Double Happiness, Zorro Unmasked and 5 Koi) that actually have an RTP of around 78% or less. The difference is “paid” into the jackpot.

So next time you’re tempted to play a jackpot poker machine, remember that the jackpot isn’t a bonus. You’re paying for it with every bet you place, and lowering your chances of winning at the same time.

No wonder the industry loves jackpots.

Doubledown Casino is one of many simulated gambling applications that can be found on Facebook. The receipt ads, which were placed on the dockets of both retailers by the Shop A Docket company, contained a URL (doubledowncasino.com/pokies) which, when clicked, redirects to the Facebook application page.

Both Woolworths and Coles said that, while they were unaware that the ad had been placed on their receipts, they would ensure that the offending dockets were removed. Coles said that they would remove them as soon as possible (in the next few weeks), whereas Woolworths were adamant that they couldn’t do this before May 1.

So I was quite surprised yesterday afternoon when one of my Twitter friends, @andrew_hedge, sent me a picture asking me if this kind of gambling promotion was legal. Here’s the pic (thanks Andrew!) :

This was on the back of a Target receipt that had been printed just the day before. Target is part of the Coles/Wesfarmers chain, so it’s pretty obvious that their determination to act quickly was just so much hot air.

This isn’t an isolated incident. Disturbed by this occurrence, I went home and checked my own shopping dockets. I share a house with my brother and we keep our dockets so we can work out who owes what for our groceries. So I grabbed the dockets from the fridge, flipped them over and took a closer look.

Well, I can’t speak for Woolworths because I don’t shop there as a rule. I do shop at Coles, as it’s just around the corner and is pretty much the only supermarket in my area other than Woolworths. And of the eight Coles receipts that we had accumulated in the past couple of weeks, seven contained the Doubledown Casino ad.

So it seems that Coles’ commitment to removing these dockets was as devoid of sincerity as those cringe-worthy ads they run. They’re still out there, still spruiking a gambling application to everyone and anyone, young and old.

Think I’m overreacting? Consider this. After finding these dockets, I added the Doubledown Casino application to my Facebook page. There were no age warnings and no declaration of simulated gambling content. Simulated gaming apps on iTunes are at least rated 12+ for content, and are supposedly illegal for minors to download (although in practice that’s a joke), but Facebook doesn’t even offer that. And as an overseas website, they can get away with it.

Doubledown Casino may be free to play, but if you want extra chips or bonuses, it costs real money. And whether you play for free or actually spend your dollars, Facebook gets a percentage of the revenue.

And in late March, just a few weeks after the docket gambling story broke in the papers, Double Down Interactive (the company behind the Facebook application) was acquired, with a price tag of $500 million, by IGT… who just happen to be one of the big players in Australia’s real-life poker machine industry. So not only do IGT have poker machines all over the country, but now they have them on our computer screens and smart phones as well.

I guess there’s no gambling like Coles gambling. Hmm, catchy.

One of the reasons I started Cyenne almost two years ago was because, having decided to start writing about gambling addiction and poker machines, I took a look around to see what else was being written… and I drew a blank. There was nothing like this blog anywhere else on the internet.

Since then, I’ve written and published over 220 articles for this blog, and many more for a number of other websites and publications. I like to think that I’ve been able to shine a light on topics that people generally don’t want to think about: gambling addiction and the shenanigans of the industries that profit from it.

It’s been a long haul with a lot of ups and downs, and there’s no end in sight. Cyenne is here for the long haul. Along the way there have been some highlights:

* being the only one to call Clubs Australia’s bluff over the AFL joining in the poker machine anti-reform campaign, and being proven right the very next day while every newspaper in the country was wrong;
* exposing the introduction of “ear-phone” poker machines into NSW, which resulted in the banning of this technology in Victoria for at least the next 10 years; and
* making a vodcast for FAHCSIA which gave me a chance to tell my story in a whole different way;

… just to name a few.

Through it all, I’ve also made more friends that I can count, through this blog, through Twitter (which I originally joined just to promote my writing, although it has become so much more than that) and through my interactions with people who’ve read what I have to say and been moved to contact me to talk about it.

I’ve touched on my own struggles, my experience of addiction and my on-again, off-again fight against depression. I’ve done what I could to expose the lies of the industry whenever possible, and handed out a few plaudits along the way too.

It’s been a heck of a journey, and I know many of you have been part of it for quite some time. Thank you for reading, for taking the time to read what I have to say. Writing the words is one thing; knowing that they’re out there making a difference, however small, is something else again.

And still, almost two years later, there isn’t another blog like Cyenne anywhere on the internet.

So now I have a favour to ask of you. Voting in Australia’s Best Blogs 2012 is now underway, and Cyenne has been nominated for the competition. If what I’ve written has made a difference to you in some way, made you think, question, wonder about things that you may not have considered before… then please, take the time to vote, and vote for me. There’s a great big button over there on the right; one click will take you to the voting website. My blog is on page one.

I’m pretty proud of what I’ve done here. I hope you feel the same way.

But either way… regardless of whether or not you vote for Cyenne, most of all I want to extend my sincerest thanks to you, for reading, for commenting, for being part of the process. Writing isn’t the same without readers. You help make it worthwhile.

Thank you.

Cheers,
Tom Cummings
15/04/2012

ps: While (if!) you’re voting, take the time to scan the list of blogs for any others that you know and like. Give them a tick too. All good blogs deserve recognition!

A follow-up to my response to Clubs Australia’s recent call for gambling education in schools.

Regardless of whether school-based gambling education is a good idea or not, the primary responsibility for preparing our kids for adulthood lies with us.

Mums, dads, aunts, uncles, grandparents… our youth are our responsibility first and foremost, and always should be.

I have three beautiful daughters, aged 4, 11 and 17. I’ve spoken to each of them a number of times about things I think they need to know and understand. The message and the way I put it has naturally depended on which of my girls I was talking to and how old they were at the time, but we’ve talked about bullying, pornography, truth in advertising and the big one, sex… just to name a few.

And we’ve talked about gambling.

My girls know that I was, and still consider myself to be, a poker machine addict. I have always been completely open about this with them. They ask me questions and, as I do here, I always answer them honestly.

To shield them from my experiences would mean insulating them from the reality of the world we live in. There’s no way I can let that happen. My role as their father is far more important than letting my history lie dormant, or forgetting the pain I’ve gone through.

If we want our kids to be ready to face whatever the world can throw at them, we can’t assume that someone else will do it for us. We need to talk about it.