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Chapter 3
Establishment of a voluntary pre-commitment system
3.1
This chapter will briefly describe one of the key reforms contained in
the bills, the establishment of a state or territory-wide pre-commitment system,
and issues raised with the committee in relation to it.
3.2
Based on the committee's experience over the past two years, which
includes a significant inquiry into pre-commitment, the committee offers a
number of suggestions to improve aspects of the pre-commitment system for
consideration by those putting the systems in place. The committee notes that
the legislation only specifies the minimum requirements, that jurisdictions are
free to do more and that its suggestions are for increased functionality on top
of the minimum requirements detailed in the bill. It offers the suggestions
based on evidence provided to the committee during its previous inquiries.
Pre-commitment system
What is it?
3.3
Although legislation can make concepts such as pre-commitment appear
complex, stated simply, pre-commitment is a tool which poker machine players
can use to set a budget and limits around their play and the system will assist
them to remain within those limits.[1]
It is intended to be a state or territory-wide system so that those limits
apply wherever they play. The system proposed in the bill is voluntary and use
is free for players.[2]
There is no requirement to use the system but players who wish to use the
pre-commitment system would register and set their own limits around how much
they are able to lose over a particular period.[3]
3.4
Associate Professor Paul Delfabbro, a gambling researcher at the
University of Adelaide, agreed that providing players with more information to
make them aware of their expenditure will be useful for players. Even though he
explained that an opt-out system over an opt-in system would have greater
effect, he supported the intent of the legislation to bring about change.[4]
Biometric identification is banned
3.5
To identify a person who chooses to register, the system may use a
photograph or signature but biometric identification is explicitly banned.[5]
Some submitters felt that this could limit the technology options in the future
as technologies develop and the use of biometrics in this area and others
becomes more convenient, widespread and therefore more accepted.[6]
The Independent Gambling Authority, SA, suggested that the prohibition on
biometrics should be subject to reversal by the regulations.[7]
Committee view
3.6
The committee recognises the importance of privacy and human rights
concerns with respect to biometric technology. However, the committee also
recognises the need for viable technology to enable consistent identity
management to ensure that pre-commitment practices are enforceable.
3.7
The committee has no firm views on this issue but notes that the rest of
the bill remains technology neutral to assist states/territories and venues with
different systems to select technology that is most appropriate for them to
meet the requirements. While the committee understands that the use of
biometrics in Australia is not yet widespread and accepted in these areas, it
notes that limiting the technology options of states/territories and venues into
the future seems to be at odds with the rest of the bill which is technology
neutral.
3.8
The committee suggests that this issue could be included in the Productivity
Commission (PC) review of assessment of progress in complying with the
requirements of pre-commitment systems.[8]
The PC could include the provisions around the prohibition for the use of biometrics
in its review to consider whether states and territories are finding the restriction
is inhibiting their ability to offer more functionality to players.
Recommendation 1
3.9
The committee recommends that the ban on the use of biometrics be
included as an issue for the Productivity Commission to consider in its review
of assessment of progress in complying with the requirements around
pre-commitment.
Ensuring registration and use is
simple for players
3.10
The Australian Churches Gambling Taskforce noted that the bill allows
for multiple providers of pre-commitment within a state or territory for the
one pre-commitment system. It therefore felt there was a need to clarify that a
player will only need one device to access the system.[9]
Committee view
3.11
The committee agrees that in order to facilitate use, the system needs
to make registration and use simple for players. It notes that clause 28 indicates
that a player can only have one registration per player per jurisdiction. It
assumes this would cover a single access device/method but does not oppose
further clarification in the bill if the government believes this is warranted.
Setting limits
3.12
The Explanatory Memorandum of the National Gambling Reform Bill 2012 stresses
that the pre-commitment system does not determine loss limits or limit periods
for people who choose to register.[10]
A player may set any loss limit, including $0 which means they are effectively
preventing themselves from using gaming machines as a registered user.[11]
Committee view
3.13
The committee notes that in evidence to previous inquiries, particularly
from problem gamblers and treatment providers, the ability to set limits or exclude
themselves from becoming a registered user of the system, remotely, ie. away
from the venue and gaming machines, such as in counsellor's offices or via the
internet is valued by those with a gambling problem so they don't have to enter
a venue.[12]
The committee believes that enabling players to set limits outside the venue
and away from gaming machines should be made available to registered players as
it would assist problem gamblers to make use of the system.
Reaching loss limit
3.14
If a person uses a gaming machine as a registered user, then once the
person reaches their loss limit they are prevented from using gaming machines
in the state or territory as a registered user for the rest of the limit
period.[13]
However, the system is not required to prevent a person who is not registered
from using a gaming machine.[14]
3.15
The committee notes that reaching a limit as a registered user does not
prevent the player from continuing to play as a non-registered player.
Changing limits
3.16
If a registered player wants to increase their loss limit or decrease
the limit period, the system must prevent the change from taking effect until
after the end of the limit period.[15]
However, if a registered user wants to decrease their loss limit or increase
their limit period that change must take effect as soon as practicable.[16]
Committee view
3.17
The committee notes that there is no guarantee that decreasing loss
limits would take effect immediately, so players could continue to play at
harmful levels until this occurs. It would be desirable for this decrease in
loss limits to be able to take effect immediately to strengthen the harm
minimisation intent of the bill.
Pre-commitment information to be
displayed
3.18
The bill provides that information on settings must be displayed to the
user before play, including the amount remaining of loss limit and length of
time since the loss limit was set or changed. During play, information on net
losses and amount remaining of loss limit is to be displayed. Requirements
regarding the form, frequency, content and position of the information may be
prescribed in the regulations.[17]
At the end of a session the machine must transmit the total amount of money or
credit that the person spends and the total amount of money or credit that a
person wins.[18]
Transaction statements
3.19
A registered player will be presented with a transaction statement on
request. The information to be provided is specified and the information must be
provided without charge.[19]
3.20
The Australian Churches Gambling Taskforce highlighted its preference
that, in addition to being able to access a statement on request, gamblers be
issued with this information every six months unless they have specifically
requested not to. It explained:
The provision of statements of activity is one way of letting
gamblers know how much they are spending, while they are in a 'rational mind
set'. The more regular the activity statement the better, but given the amount
of money that a person can lose over a year, a six monthly activity statement should
be a minimum requirement.[20]
3.21
The need for more frequent transaction statements was also underlined by
the Independent Gambling Authority, SA which argued that statements available
on request is a 'weak harm minimisation measure because those most in need of a
transaction statement will not request it'. In South Australia transaction
statements are required to be provided at fixed periods depending on the level
of activity.[21]
Committee view
3.22
During previous inquiries the committee was told that problem gamblers
have difficulty keeping track of how much they are spending and tend to
underestimate how much they have lost. A key of the reforms objective should be
to provide the player with information on their play quickly, easily and
regularly. The committee therefore agrees that transaction statements should be
provided regularly to registered players as it is their intention to keep track
of their play. The committee would encourage a facility to be incorporated in
pre-commitment systems that in addition to being provided with a transaction
statement on request, a player is provided with statements regularly according
to their intensity of play. The committee also suggests there could be an
option of viewing transaction statements via an icon on the screen which could be
printed on request.
Loyalty schemes
3.23
The bill is silent on the potential for pre-commitment systems to be
linked by venues to loyalty schemes. The Australian Churches Gambling Taskforce
noted that some loyalty schemes already offer pre-commitment. However, it
pointed out the extent to which loyalty schemes are used to actively promote
gambling and how this would be incompatible with the aim of pre-commitment.[22]
3.24
Dr Samantha Thomas echoed this view:
From a health promotion and public health perspective,
linking harm minimisation schemes to industry based incentivisation schemes is
extremely problematic. It may send conflicting messages about gambling to
individuals, and may also enable industry to collect extensive data about the consumption
patterns of individuals (both of gambling and other products within venues),
which may enable them to more effectively target individuals. It is important
that the Government considers how pre-commitment can run independently and be
protected from the influence of such schemes.[23]
3.25
The committee raised this issue with Professor Paul Delfabbro who stated:
It is a difficult one. Loyalty schemes do provide a way to
get the systems going. The availability of loyalty schemes has made it possible
to do some of these trials. Without the loyalty systems, it would not have been
possible to even do the limited research we have done. It is a difficult one
that I would have to reflect upon. There is not a lot of evidence that having a
loyalty system necessarily contributes to more problem gambling. There are
certainly some inducements, which I think are problematic and there is
certainly legislation around those. It is one where there are probably
arguments both ways. Loyalty systems may create more industry cooperation; it
may lead to making it easier for industry [to] support...precommitment, which may
have benefits. It depends on the type of loyalty scheme.[24]
Committee view
3.26
In its first inquiry into pre-commitment the committee acknowledged the
differing views on this issue. It did not consider the case for prohibition
with loyalty schemes was overwhelming, although it acknowledged there are
legitimate concerns in some quarters. It concluded that as it could assist some
players to use pre-commitment features, if individual venues decided in the
interests of their members to link pre-commitment to loyalty schemes this
should not be prohibited but that it would be prudent for regulatory
authorities to monitor the effects of linked loyalty programs.[25]
The committee suggests that this issue is included in the review of
implementation by the Productivity Commission.[26]
Recommendation 2
3.27
The committee recommends that the linking of pre-commitment to loyalty
schemes be included as an issue for the Productivity Commission to consider in
its review of assessment of progress in complying with the requirements around
pre-commitment.
Approval period
3.28
The committee notes that the approval period for a pre-commitment system
is 10 years unless revoked.[27]
While the committee understands that operators want regulatory certainty, it
notes that the timeframe does not prohibit new pre-commitment systems and
trusts it does not inhibit innovation and enhanced functionality from being
implemented, such as that being suggested by the committee.
Implementation timelines
3.29
The timelines in the bill for implementation affect state and territory
systems, gaming machines manufacturers, state and territory regulators, and
venues.
States/territories
3.30
The uniform timelines and conditions on all states and territories were
noted despite the different technological environments and the lack of central
monitoring systems in some jurisdictions[28]
and different communication protocols. The committee notes that subclause
58(2)(b) of the bill clarifies that there are no penalties if there is no
approved pre-commitment system available.
3.31
Ms Liza Carroll, FaHCSIA addressed the issue of jurisdictional
monitoring systems:
I think the issue is in some states there might be a central
monitoring system, such as that in Queensland, which will make it easier for
the venues to be linked together. In some states, like in New South Wales,
where I think their central monitoring system is up for renewal in around
2015-16, they still have an older style central monitoring system. But for the
linking of the venues there are other options other than through a central
monitoring system. There is technology out there that would allow venues to
link together, which does not have to be through a central monitoring system.
That is obviously easier if it already exists.[29]
Committee view
3.32
The committee notes that through the Council of Australian Governments
Select Council on Gambling Reform all states and territories have indicated they
will support the required infrastructure for pre-commitment technology in all
jurisdictions in every gaming venue.[30]
The bill allows states and territories to continue to run their own systems. Recognising
the different technical environments in each state and territory, the bill is
not prescriptive regarding pre-commitment technology which could be
machine-based, venue-based or more widely networked. It could also be multiple
systems that share data. Technology will need to be determined state-by-state
according to what already exists.
Manufacturing and importing of Electronic
Gaming Machines
3.33
Chapter 5 outlines the requirements for manufacturing and importing
gaming machines to ensure that all new gaming machines manufactured in
Australia or imported to Australia from 31 December 2013 are pre-commitment
capable. With the requirements for pre-commitment systems not due to commence
until 31 December 2016, this provision will ensure that new machines coming on
to the market from 31 December 2013 are pre-commitment capable. The
Explanatory Memorandum notes that this will help minimise the impact of introducing
pre-commitment as there will be ongoing machine replacement between 31 December
2013 and 31 December 2016 (31 December 2020 for small gaming premises).[31]
It prescribes civil penalties for constitutional corporations if they
manufacture or import non-compliant gaming machines.[32]
3.34
The technical challenges for manufacturers were outlined by the Gaming
Technologies Association (GTA) whose members supply gaming machines.[33]
However, when asked whether industry can find a way to sell machines at the end
of 2013 that would be consistent with the bill, Mr Ross Ferrar, Chief Executive
Officer stated:
Industry will always comply with all legislation. When I say
'industry' I mean our members. I hate to repeat myself, but they sell games and
machines all around the world and they comply with all legislation and all
regulations worldwide. They hold licences which mean that if they do not then
those licences are jeopardised.[34]
3.35
Mr Ferrar added that his members have been 'doing their best to prepare
for every eventuality'[35]
and will 'do everything in their power' and that their 'commercial success
depends on being able to sell gaming machines'.[36]
Mr Ferrar highlighted that they need to know the specifications at the earliest
possible opportunity and that he was meeting with officials from the Department
of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to
discuss this.[37]
3.36
The committee notes information from Aristocrat that they have already developed
a venue-based voluntary pre-commitment functionality, held a trial, and that NSW
regulatory approval for the venue based voluntary pre-commitment module of the
pre-commitment functionality has been granted.[38]
3.37
Ms Liza Carroll, Deputy Secretary, FaHCSIA addressed the issues around
technology options:
What the legislation does is provide the parameters within
which the machines would need to operate, and within a particular state and
jurisdiction. Because we did not want to preference one type of technology we
have purposely tried to not be explicit about saying, 'This is the kind of
technology you would use.' The regulations become very important here, and we
will be developing those regulations in consultation with a range of
stakeholders, including industry and others. In that regulation we will be able
to get some more of that specification. As you have heard, the circumstances
are quite different around Australia. We also know there will be innovation in
the industry and we want to make sure the legislation does not pre-prohibit and
limit the amount of innovation and new things that can come onto the market.[39]
3.38
Responding to the claims by the GTA, Mr David Agnew, FaHCSIA, replied:
There are a number of technical solutions to enable voluntary
precommitment. So, while Mr Ferrar may have made a claim around manufacture of
machines and impact on machines, there are a number of other technical
solutions to enable precommitment.[40]
3.39
In answers to questions on notice FaHCSIA provided further information
on technology options:
There are a number of pre-commitment systems available and
already operating in Australia that may be compliant with the legislation.
These systems have been trialled in Queensland and South
Australia, and are operating within venues in a number of states.
These include, but are not limited to, the following systems:
Maxgaming SIMPLAY
Worldsmart Playsmart
eBet Odyssey
Global Gaming Industries Max-e-Tag
Crown Play Safe
It is possible that a number of existing and new
pre-commitment providers of these systems will seek to become approved
providers under the legislation.
The Department has not been prescriptive about particular
systems or technologies in the legislation, but instead the legislation sets
out the functional requirements for a system to be approved. This approach
provides maximum flexibility for industry to choose systems that suit their
particular operating environment. It also allows for new systems to be
developed and marketed over time, in addition to those currently available.[41]
State regulators
3.40
Ms Carroll advised the committee that FaHCSIA has been speaking with
regulators and other state government officials. She advised that the specifics
of what is required of a regulator will be covered with the development of the
regulations.[42]
Ms Carroll added:
...we have had broad consultation with a range of parties,
including regulators and state governments. We recognise that there is a whole
lot of things that state governments do in their own regulation but that what
will occur out of this legislation is a Commonwealth regulator. Minister
Macklin has made it quite clear that our preference would be to refer those
powers to state government regulators, but we still have to go through that
consultation process.[43]
3.41
In response to further questions about whether the timelines are
achievable, Ms Carroll responded:
All I can say is that with the information we been provided...and,
certainly, from our discussions with different parties, we would be working on
the basis that we could come up with solutions that are possible and that the
regulation could be implemented in that period of time.[44]
Committee view
3.42
The committee notes advice from FaHCSIA that the legislation is
purposefully not prescriptive regarding technology to be used. This recognises
that states and territories have different monitoring systems currently in
place and gaming venues have various systems in place. The legislation
accommodates the need for states and territories and venues to be able to choose
from the range of technical options that best ensure their compliance with the
requirements. The committee also notes that consultation with states and
territories and their regulators will be ongoing as regulations are developed.
3.43
Clubs Australia raised questions about the treatment of existing
pre-commitment systems[45]
as under clause 46 of the bill all pre-commitment systems require approval by
the Regulator. The Explanatory Memorandum notes that approval by the Regulator
is intended to ensure that pre-commitment systems are offered on reasonable
terms that are fundamentally consistent across Australia.[46]
The committee expects there will be a number of options available to the
Regulator regarding existing systems. If current systems have the minimum
features they could be approved or there could be an interim approval pending
final approval which would provide a transitional period to achieve formal
regulatory approval. This issue will form part of ongoing consultations.
3.44
The committee notes that a number of issues raised by the Independent
Gambling Authority, SA, regarding how the legislation will interact with state
and territory regimes[47]
would also be covered as part of the ongoing consultation between states and
territories and the Commonwealth.
3.45
This legislation has been available as an exposure draft since February
2012 and the committee notes advice from industry that manufacturers have been
doing their best to prepare for every eventuality. The committee has confidence
in the ability of industry to innovate. The commercial and regulatory imperatives
that mean it will be in their interests to do so.
Venue timelines and costs
3.46
The implementation dates are:
-
31 December 2016 for larger venues;
-
31 December 2020 for venues with 11 to 20 machines; and
-
for smaller venues with 10 or fewer machines, when machines are
replaced in their usual replacement cycle.
3.47
Clubs Australia expressed concern about the implementation timelines for
venues with more than 20 poker machines, saying that it does not provide
sufficient time for clubs to absorb the compliance costs and may result in
non-compliance. It suggested an expansion of the definition of small venues so
that the timeframe can also take into account a venue's average revenue per
machine.[48]
3.48
The Australian Hotels Association expressed its preference to install
pre-commitment technology via the natural replacement of machines.[49]
The committee notes that the Victorian Hotels Association when responding to
the Victorian governments discussion paper on voluntary pre-commitment, while
it described the timeframes (2015-16) as challenging, it supported voluntary
pre-commitment.[50]
3.49
Whereas industry has expressed concern about the timelines for
implementation in the bill, the Australian Churches Gambling Taskforce was
disappointed at the 'generous time extension' for venues with 20 gaming
machines or less to comply with the requirements. It argued that this will mean
venues with large revenue generation per machine, which would be capable of
introducing the requirements, will be able to delay implementation.[51]
3.50
FaHCSIA told the committee that it had undertaken independent work
around this aspect which found that the initial timeline and then the extended
timeline for smaller venues are achievable.
We have had independent technical advice, noting that
independent technical advice is not out of the manufacturers space, that says
that the time frame is achievable.[52]
3.51
In answers to questions taken on notice, FaHCSIA provided a link to the
independent technical advice received from the Toneguzzo Group which was subject
to an FOI request on 12 August 2011.[53]
3.52
Ms Liza Carroll, Deputy Secretary, FaHCSIA further addressed the issues
around timelines for industry:
We have had consultation with the industries and with a range
of parties over a length of time. It is our understanding that the 2016 time
line and then the extended time lines for small venues are achievable. That is
based on both some independent work that the department had done and the
different evidence and information that we have been given, particularly by
manufacturers and suppliers, about the different kinds of machine technology
and some of the things that have been raised today about the fact that it is
not all about machine replacement—a lot of machines can be upgraded, and the
upgrades to machines can be relatively simple and easy to do...[54]
3.53
Ms Carroll also spoke on the suggestion by Clubs Australia to expand the
definition of small venue so that it includes average revenue per machine:
The main issue with going to a different definition is that
data is not made available in any easy form. In fact, it is quite hard to get
revenue data about clubs generally. What is available across Australia is the
number of machines. So it is very clear that that is an easy mechanism to use. It
is already available. The other complication if you went to a revenue measure
would be what you would be counting and discrepancies in arguments about what
revenue looked like. It would be a lot of red tape. Our view would be that that
would be a lot of extra reporting for all clubs.[55]
3.54
Ms Carroll emphasised that they have been working to minimise the cost
to industry and minimise regulatory burdens but there was a need to balance these
considerations with the costs to individual problem gamblers, their families,
others affected and the community. Industry costs have to be weighed up against
the social consequences and social costs[56]
which were estimated by the Productivity Commission in 2012 to be $4.7 billion.[57]
Ms Carroll reassured the committee that in the view of the Department, clubs
will have the revenue to pay for the necessary changes.[58]
Committee view
3.55
The committee notes that when the government announced its reforms in
January 2012 these reforms were supported by Clubs Australia. The legislation
was made public as an exposure draft in February 2012 and Clubs Australia
participated in consultations on the exposure draft in February. The timeframe
and requirements on venues have not changed since the exposure draft.
3.56
The committee notes that the concerns of clubs regarding the timetable
have been taken into account and more than 25 per cent of pubs and clubs will
be able to introduce the changes as they replace their machines, at no
additional cost. An additional 26 per cent of pubs and clubs (those with between
11 and 20 machines) have until 2020, which is more than eight years lead time.
In this period, many machines would have to be replaced as part of the usual
replacement cycle, now with pre-commitment built in, at no additional cost. In
New South Wales, which has more than half the nation's poker machines, almost
two thirds of pubs and clubs have been given extra time to get ready for the
voluntary pre-commitment system.
3.57
The committee also notes that the government has taken into
consideration that small clubs and pubs are not the same as large gambling
venues located in cities. Therefore not all clubs will be required to implement
pre-commitment technology by 2016. These changes are being phased in over a
decade to reduce costs for smaller pubs and clubs. In fact, more than half of Australia's
clubs and pubs will have extra time to prepare, and 63 per cent of clubs and
pubs in regional areas will have more time.[59]
3.58
The committee is mindful of the concerns about regional and remote
venues, but supports maintaining an evidence-based approach. As a result, the
committee considers that this issue should be included in the review of
implementation to be undertaken by the Productivity Commission (PC). The PC
could consider whether there are grounds for further exemptions for smaller
venues in regional and remote areas.
Recommendation 3
3.59
The committee recommends that the issue of whether there are grounds for
further exemptions for smaller venues in regional and remote areas should be included
as an issue for the Productivity Commission to consider in its review of
assessment of progress in complying with the requirements around
pre-commitment.
Need for a national education and social marketing campaign
3.60
As noted in the committee's first report,[60]
to facilitate take up of pre-commitment by players, there will be a need to
launch an effective national awareness and education campaign that is targeted
not just at players (who won't use it if they don't understand it), but also
staff who are likely to be asked questions and will be in a good position to
encourage use. This important aspect was noted by Dr Samantha Thomas:
It is important to note that social marketing and education
initiatives will be an important part of the implementation of the scheme. As
the proposed pre-commitment scheme is one which seeks to encourage individuals
to make ‘responsible’ choices about their gambling, education and social
marketing initiatives will be essential in educating and encouraging
individuals to use the new technology. These social marketing initiatives
(which must be broader than campaigning) will be necessary in providing
accurate, targeted and tailored information to the community about the scheme.
Social marketing and education schemes should consider the range of factors
that may encourage and prohibit individuals from using the scheme. For example,
given that most pre-commitment schemes at this stage will be voluntary rather
than mandatory, it may be that individuals choose not to use the scheme for
fear of being stigmatised as someone who may potentially have a problem with ‘losing
control’ with gambling. Social marketing has a clear ethical dimension, and as
such, it is important that any social marketing and education schemes are
developed independently of industry, and are regularly evaluated to ensure
their effectiveness.[61]
Recommendation 4
3.61
The committee recommends that the government develop an appropriate
national education and social marketing campaign for voluntary pre-commitment
and work with industry to develop training for staff.
Committee comment
3.62
The committee notes the preference of submitters in this[62]
and previous inquires that the pre-commitment system be mandatory rather than
voluntary. The committee is encouraged by the trial of mandatory pre-commitment
proposed for the Australian Capital Territory. While there are some details of
the trial in the bill, including requirements about the design and evaluation
methodology, the trial is not dependent on the legislation passing. The bill[63]
ensures that machines will be mandatory pre-commitment equipped and therefore,
at some future point, the committee notes that it does not stop a jurisdiction
deciding to adopt mandatory pre-commitment.[64]
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