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Chapter 5
An overview of pre-commitment
5.1
This chapter outlines pre-commitment as a harm minimisation strategy for
problem gambling on electronic gaming machines (EGMs) by looking at the
evidence base around pre-commitment including the trials of pre-commitment that
have been undertaken both in Australia and overseas. The chapter also presents
an overview of the current status of pre-commitment initiatives and activities
at both state and Commonwealth levels. The chapter concludes with a discussion
around research issues, including research capacity.
What is pre-commitment?
5.2
Most people who gamble make some attempt to control their gambling, such
as undertaking to limit their spending. However, some find it difficult to stick
to these self-imposed limits, particularly when they are in the throes of the
gambling experience. Put simply, pre-commitment is a tool to assist a gambler
stick to their limits:
Pre-commitment refers to a system enabling a gambler to set
limits on how much they will spend or how long they will play – before they
start gambling.[1]
5.3
The Productivity Commission noted that those who play high intensity EGMs
find it particularly hard to limit their spending:
Around 70 per cent of EGM players report that they at least
sometimes exceed their spending limits, with 12 per cent doing so often or
always. Higher risk gamblers exceed limits more frequently and report greater
harm from doing so. Players reported greater problems limiting expenditure on
EGMs compared to other recreational activities, like consuming alcohol,
spending on tobacco and entertainment/leisure activities.[2]
5.4
Pre-commitment systems have been trialled in a number of countries,
including jurisdictions in Australia. Further details on these trials are
provided below.
5.5
Mandatory or full pre-commitment simply refers to a system where a player
is required to set limits and then cannot renege on these. Limits could not be
changed simply because a player decided on a whim to change his or her mind.
Once the player reached their pre-set limit, further play is disabled.[3]
Evidence from voluntary pre-commitment trials
5.6
A number of trials on voluntary pre-commitment have been undertaken in
Australia in recent years. Overseas jurisdictions have also conducted trials, notably
Nova Scotia in Canada. Pre-commitment trials for other modes of gambling have
also occurred in Sweden (for online poker) and New Zealand (online lotteries).
Although the trials in Australia have largely concluded, one trial remains
ongoing in South Australia.
5.7
As noted the pre-commitment schemes that have been trialled have been
voluntary schemes—players were not compulsorily required to set limits. The
committee was advised by some in the industry to reject the evidence from these
trials:
Advocates for pre-commitment point to the trials in South
Australia, Queensland and Nova Scotia as evidence that pre-commitment can be
implemented, and works. They also point to Norway as a country which has
implemented mandatory pre-commitment successfully. Clubs Australia does not
agree with these assertions.
- Australia’s trials have been for voluntary, venue-based
pre-commitment.
- Nova Scotia’s extensive trials had a requirement for participants
to have a card, but it was voluntary to use the pre-commitment features on the
cards, such as spending or time limits, or enforced breaks in play. Nova
Scotia’s trials were explicitly not intended to redress problem gambling.
- Norway has had no reduction in problem gambling since
implementing mandatory pre-commitment.[4]
5.8
Others regarded the level of evidence provided from these trials as
being of value. The Responsible Gambling Advocacy Centre asserted for example:
The existing research, analysis and evidence all strongly
point to the advantages given to regular gamblers through access to a
pre-commitment system. Moreover, a mandatory system is the best way to maximise
pre-commitment’s harm minimisation benefits and the consequent positives that
will flow to the general community from those benefits.[5]
5.9
The committee took the view that evidence from these trials provides
valuable insights into the optimal design features that could be incorporated
into a pre-commitment system. These trials also demonstrated to the committee
that there is a genuine and ongoing interest amongst jurisdictions in improving
their harm minimisation and consumer protection measures. As the South
Australian Responsible Gambling Working Party noted:
It is the Working Party’s position that the more information
a customer has regarding their EGM activity the more informed they are to make
choices regarding their gambling. Enabling customers to set limits, be it
money, time or bet size, will assist customers to play within their own
preferences, circumstances, financial and social limits.[6]
5.10
Summaries of these trials and the main findings of their evaluations are
presented below.
South Australian trials
Worldsmart Technology Pty Ltd
(J-card) Trial
5.11
The Worldsmart Technology trial was conducted between August 2008 and
February 2009 in six regional and metropolitan hotel venues across South
Australia. The trial was evaluated by Schottler Consulting.[7] Findings from the
evaluation were also reported by the South Australian Responsible Gambling
Working Party.[8]
5.12
The trial used a pre-existing club loyalty card (the J-card). The card
held player information and recorded any pre-set limits players had nominated.
Patrons could set spending limits (daily, weekly, fortnightly and monthly),
time limits, breaks in play, personalised reminder messages when these limits
were reached and several other options. These features were collectively known
as Playsmart.
5.13
If a player exceeded any of their pre-set limits a low beeping noise
notified the player. If play continued loyalty points ceased to accrue to their
J-card. The cashier who was also notified if a pre-set limit was exceeded had
to physically go to the machine to turn off the message and, often would speak
to the player about their limit being reached.
5.14
The evaluation found that only a small number of patrons opted to use
the limit setting features of Playsmart but a larger number elected to receive
default messages at specific turnover points. The evaluation found that
barriers to take-up of limit setting included a lack of knowledge around the
features. For instance, only 68 per cent of surveyed users understood that
monetary expenditure limits could be set, only 45 per cent knew about the
ability to personalise limit reminder messages and only 22 per cent were aware
of the availability of breaks-in-play.[9]
5.15
Around 60 per cent of those who set limits set daily spending limits.[10]
The evaluation found that spending by patrons who set limits fell
significantly. Of note, declines in expenditure were most marked amongst
problem and moderate risk gamblers. On average problem gamblers experienced a
55.8 per cent decline in expenditure, while moderate risk gamblers experienced
an average decline of 48.8 per cent.[11]
ChangeTracker Card Trial
5.16
The ChangeTracker Card trial was a small three month trial of a manual
pre-commitment system. The trial involved the patron using a card to manually
record their cash to coin transactions at the cashier of the venue where they
played EGMs. The card was marked when cash was exchanged for coin. The card
could record a weekly budget, daily exchange amounts (up to 5 exchanges), and
the total exchanged for the week. Patrons retained their card.
5.17
The very small sample size (just 20 patrons used the card) does not
allow for any statistically valid conclusions to be drawn. However some useful
insights into player attitudes to pre-commitment were gained. These included:
-
active recruitment was more successful than passive recruitment
-
the key driver of player participation was an interest in
tracking money spent on gambling
-
although viewed as user-friendly, the card was not considered
useful in managing expenditure
-
the main barrier to take-up was the perception the patron would
be identified as a problem gambler,
-
support for the concept of the card was greater than the use of
the card.[12]
Global Gaming Industries Trial
(Maxetag system)
5.18
The Global Gaming Industries (GGI) trial began on 1 March 2010 using
another loyalty card system, the Maxetag loyalty system. The trial is currently
ongoing across three venues in South Australia.
5.19
The system involves the use of a radio frequency (RF) tag which is
swiped across a reader installed at the machine. The tag itself comprises a
smart chip and an antenna. Patrons can set a daily spend limit either at the
beginning of play or during play. The limit follows the patron across machines
in the venue but not across venues. On breaching a limit, a flash and audible
beep occurs at the patron’s tag reader, as well as a message that they have
exceeded their limit and the amount by which it has been exceeded.
5.20
Patrons can also access a session statement from a foyer terminal. The
statement identifies the pre-set spend limit set, the actual spend, the
difference between the two and the time spent playing.
5.21
The committee attended a site visit at one of the trial sites in
Adelaide to view the technology in action. The trial is yet to be evaluated. Mr
Earle Rowan, Systems Analyst, GGI, described the system to the committee as
'educational':
The system we have on trial in South Australia at the moment
is a system whereby an individual can set a limit at the gaming machine for
that session of play. We describe it as an educational system. It is an attempt
to educate people to gamble responsibly rather than to force them.[13]
5.22
Mr Scott MacDougall, Managing Director, GGI described to the committee
how the Maxetag system works:
What happens is that as you tag on, or put your card into the
device, it says, ‘Would you like to set a limit?’ You physically have to say
yes or no, so you are making a conscious decision before you move forward and
you push yes or no. So you set your limit, but it does not stop the machine or
lock the machine when you reach your limit. It will give an audio warning and a
visual warning, and every time you insert money after that it will keep warning
you. It is like a seatbelt alarm. Eventually you put your seatbelt on, you
would like to think, in this case...[14]
5.23
Mr Earle Rowan, GGI, provided some insights into the current trial. One
issue he identified was protecting privacy:
When you are getting people to say, ‘I want to set my limit,’
as Scott rightly pointed out, it may well be your next-door neighbour who is
sitting behind the counter. So anonymity has become an issue that we find
actually works. A person could do it themselves and could be given
encouragement to do it themselves, which we are doing through various marketing
methods. We have now just introduced some audio in the venues and we are
running a trial to promote the system. We are starting to sell this and we are starting
to see a movement towards taking this up. It is very early days at the moment,
but it is encouraging.[15]
5.24
Mr Scott MacDougall, GGI, added:
...we have taken an approach whereby an individual can go to
our foyer terminal, they can tag onto that with a device and it will print out
a small sheet with no identification on it whatsoever that tells them how much
they spent, how much they targeted to spend and how many hours they have been
in the venue. They can do that at any time throughout the gambling cycle.[16]
5.25
The potential cost of the hardware or 'wedge' as it is sometimes called,
was also discussed with the committee:
Mr Rowan—Again, there is no problem with putting a wedge in a
machine; we do that in South Australia. We have put hundreds of them in four states.
Senator BACK—Is that the $800 that they were talking about?
Mr Rowan—Yes. It has gone up a little bit since then.[17]
Queensland trials
5.26
Three trials using cashless or card based gaming have been undertaken in
Queensland; the first being in 2005 at the Grandview Hotel, Cleveland. Lessons
from this earlier trial subsequently informed two later trials—Maxgaming's
Simplay trial at Redcliffe RSL and the Odyssey (eBet) trial at Sandgate RSL.
Evaluations of these latter two trials on player behaviour were prepared by
Schottler Consulting.[18]
The findings were also summarised by the Queensland Office of Regulatory
Policy.[19]
Maxgaming Simplay trial (Redcliffe
RSL)
5.27
In the Maxgaming Simplay trial conducted at the Redcliffe RSL around 340 people
were recruited during the eight month trial period. Players used a ‘kiosk’ to
set limits on their card and to obtain information statements. Participants
opted into the system by swiping their existing club membership card at the
‘kiosk’ and then navigating through a series of screens, setting spending or
other limits.
5.28
The Simplay card required players to enter a PIN at the commencement of
a gaming session, although players could re-insert their card into other machines
subsequently without the need to re-enter their PIN. The card was linked to a
secure account, with the player transferring credits from the card to the
machine at the commencement of play—hence the cashless gaming. Residual credits
were transferred back to the card at the end of the session of play.
5.29
If a player exceeded their pre-set limit they were alerted that the card
was ‘disabled’ for the remainder of the day. The patron could no longer play
with his or her card in that or any other grouped venue for the day, though
they could choose to play on by using cash only.
5.30
The evaluation found that only a minority (13 per cent) set limits but a
majority of players (85 per cent) opted to use the cashless gaming feature. Of
those who set limits, two thirds exceeded their limit at least once. The
process for signing up to the system was perceived by players to be relatively
simple, taking approximately 30 seconds. The efficient sign-up process was seen
as an important feature to players.[20]
5.31
The evaluation found that participants liked the convenience of cashless
gaming. A small number of players saw the value of setting pre-commitment
limits, but few players saw this as the major benefit of the product.[21]
In terms of reducing the harmful effects of problem gambling, the evaluation
found that players who set limits were more likely to decrease their
expenditure. Furthermore, problem gamblers and those at moderate risk were more
likely than those at low or no risk to spend less overall.[22]
Odyssey trial (eBet)
5.32
In 2008 a six month trial of pre-commitment using card-based gaming was
conducted at the Sandgate RSL Club. The system provider was a partnership
between Odyssey Gaming Technology (Odyssey), a Licensed Monitoring Operator
(LMO) in Queensland, and eBet Ltd (eBet), a gaming systems developer. The
card-based gaming system at Sandgate is colloquially referred to as ‘eBet’. As
with Redcliffe, the trial used a cashless gaming card, with optional
pre-commitment features.
5.33
The number of participants for the Sandgate trial was 66. Once again the
sign up process was seen by participants to be easy. Some 28 per cent of
players opted to set a daily spend limit. When surveyed, a significant
proportion of players (45 per cent) felt that the card had encouraged them to
think about the affordability of their gambling expenditure.[23]
Importantly, those who did set spending limits (including problem gamblers) decreased
their expenditure more than those who didn't set limits. The net daily spend of
players who set a limit decreased from $64.02 to $39.26 spend per player per
day, while daily spend of players who did not set a limit (but used the card
for cashless gambling) only decreased slightly.[24]
5.34
Since these trials, both the eBet/Odyssey and Maxgaming Simplay systems
have been approved for roll-out to gaming venues across Queensland. The
committee had the opportunity to visit the Sandgate RSL to view e-Bet's
pre-commitment tool operating in the venue and Club Pine Rivers to view the
Maxgaming Simplay system.
5.35
The submission prepared by eBet highlighted their view on the need to
protect player privacy:
The evidence shows that from an acceptance perspective the
main concerns of players appear to centre on identification and privacy. These
are in turn related to issues involving personal freedom, choice and individual
responsibility. Such concerns are supported by studies of pre-commitment undertaken
in Queensland (Sandgate RSL), South Australia and Federal Government
commissioned research (Gambling Research Australia). In Queensland a trial of a
venue based system/card gaming was conducted and a report by Schottler Consulting
clearly identifies intrusive identification procedures as a barrier to uptake
by patrons.[25]
5.36
Mr Tony Toohey, Chief Executive Officer, eBet, echoed this in his
evidence to the committee:
What needs to happen is that that information needs to be
ring-fenced so no authority can touch it. That leads to a level of trust. If
people know nobody can get and they are assured of that, then they will be
happy to participate.[26]
International evidence
5.37
A number of witnesses referred to the trials of pre-commitment in Nova
Scotia, Canada and the pre-commitment situation in Norway.
Norway
5.38
In 2007 concerns over problem gambling on video lottery terminals (similar
to EGMs) led to the removal of all privately operated machines. In 2009, new
state-operated VLTs were introduced with strict regulations including limits on
where machines could be located, mandatory timeouts every hour, a ban on
spinning wheel games and limits on maximum wins. Players are also required to
use a player smart card, which has a play summary, limit setting options,
self-exclusion options and allows players to transfer money from their bank
account onto the card. Gambling on VLTs is entirely cashless.
5.39
Players must first insert their smart card, verify their player ID, and
then remove the card before they can play. There is a mandatory spending limit
on all cards of around $AUD80 per day, but players can also set their own
spending limits and timeouts. Prior to the implementation of the mandatory
system, a pilot study was undertaken which found that only a small percentage
of players opted to use the optional limit setting features.[27]
5.40
Some witnesses referred to the evidence from Norway to argue that
prevalence rates of problem gambling would drop under mandatory pre-commitment.
Dr Mark Zirnsak Director, Justice and International Mission Unit, Uniting
Church of Tasmania and Victoria pointed out that:
...pretty much on the month that the slot machines were
removed, there was a dramatic drop in the number of people seeking assistance through
problem-gambling help services. It will also show that for that year, even
though it was only half of the year that the slot machines had been removed,
the number of calls to problem gambling help services dropped to about 1,100
compared to over 2,000 for the previous years. Further, there was a subsequent
study by Lund[28]
which appears in the Journal of Gambling Studies—it is quoted in a
number of submissions to the Productivity Commission—which found that as a
result of the removal of slot machines the prevalence of problem gambling
dropped.[29]
5.41
Economist and academic Dr Jamie Doughney also pointed to the Norwegian
evidence:
How do we know that such an approach would be effective? The
nearest possible empirical evidence that can be adduced here is the work from
Norway, where they went from something to nothing, that the level of problem
gambling declined considerably. The amount of use or of gambling products
dropped as well.[30]
5.42
Others disputed the evidence. Clubs Australia asserted that, 'Norway has
had no reduction in problem gambling since implementing mandatory
pre-commitment'.[31]
While the evidence from the study by Lund analysing the impact of the removal
of EGMs in Norway showed declines in gambling participation and gambling frequency
following the temporary removal of high intensity EGMs in 2007,[32]
it did not assess the prevalence of problem gambling following the
re-introduction of modified EGMs in 2009. The Lund study established that high
intensity EGMs are risky and that following their removal from the Norwegian
market problem gambling prevalence rates dropped:
...the post-EGM prevalence of gambling problems was
significantly lower than the problem prevalence under the EGM regime a result
that in itself suggests that the EGM’s reputation as a high risk game is well
deserved.[33]
5.43
Given that EGMs were only re-introduced into Norway in 2009 it is too
soon to be drawing solid conclusions around the prevalence of problem gambling in
this intervening short period. However, the committee notes that the Lund study
confirmed that high-intensity EGMs are harmful and believes it is reasonable to
conclude that reducing their impact, through mandatory pre-commitment, will
result in lower rates of problem gambling in the community.
Nova Scotia
5.44
A mandatory pre-commitment system (known as My-Play) is currently being
rolled out across video lottery terminals (similar to EGMs) in the Canadian
province of Nova Scotia. During the first year, sign-up to the program is still
voluntary. From April 2012, it will be mandatory for players to use the My-Play
card in order to play on all video lottery terminals in the province.[34]
The My-Play card enables players to monitor their play and set spending and
other limits. The implementation of My-Play follows a series of pre-commitment
trials that were conducted between 2004 and 2006. The trials showed a reduction
in expenditure was achieved and this was mainly attributable to the use of
spending limits and the provision of player information on expenditure.[35]
5.45
A Fact Sheet on the trials showed that players at low or moderate risk
of gambling harm benefited the most from pre-commitment, whilst those at higher
risk benefited less.[36]
5.46
Since the roll-out of My-Play commenced, spending on VLTs in Nova Scotia
has declined by 2.8 per cent.[37]
A recent benchmark survey measuring player's attitudes to My-Play showed that
more than half of regular VLT players support the system, and 68 per cent of
problem gamblers regarded it favourably. Some 29 per cent of regular players
intended to sign-up to My-Play, with 47 per cent of problem gamblers indicating
they would join. Most problem gamblers favoured limit setting features,
tracking of losses and self-exclusion features.[38]
Unintended consequences
5.47
A number of witnesses raised the issue of unintended consequences. These
included migration to other forms of less regulated gambling, card swapping and
fraud.
Migration to other forms of
gambling
5.48
Some industry witnesses suggested that people who disliked the
restrictions of pre-commitment would migrate to other forms of gambling. Mr Peter
Newell, President, Clubs Australia, argued:
Question 2 is: will the proposals be effective in reducing
problem gambling? Our answer to that is also no. Norway introduced mandatory
precommitment and the result was that players moved to Internet gambling.[39]
5.49
Mr David Curry, General Manager, Government and Corporate Relations, ALH
Group also argued that players would migrate to online gambling when faced with
mandatory pre-commitment, citing further evidence from Norway:
Firstly, the unintended consequence of mandatory precommitment
will mean, I think, that a percentage of people, people who have a problem with
their gambling, will migrate to all other forms of gambling in an unregulated
environment, particularly online. The data I have from the senior adviser at
the Norwegian department of church and culture was that 54 per cent of callers
to the gamblers help line in Norway for the first quarter of 2009 were related
to i-gaming.[40]
5.50
He further elaborated:
The evidence that I have was from a senior adviser to the
Norwegian government. In terms of iGaming 22 percent of calls through the
national helpline were related to iGaming in 2006. In 2007 it was 41 per cent
and 15 per cent sports betting on top of that. In 2008 it was 70 per cent of
the calls and 23 percent of sports betting on top of that. In 2009 the first
quarter was 54 per cent of calls and 17 per cent sports betting, remembering
that from 1 July 2007 slot machines were banned in that jurisdiction.[41]
5.51
Dr Jamie Doughney, Victoria University, referred to the evidence from
Norway to refute this view:
The Norwegian evidence is absolutely decisive on that point.
People do not migrate. In fact, it would appear that because some gambling
products are purchased in a complementary way, overall gambling losses decline.
I think the Norwegian evidence is very strong in that respect, and you have had
that submission presented to [you] before, particularly the article by Lund
that was published.[42]
5.52
The Norwegian study by Lund, acknowledged there had been 'increased
participation' in internet gambling following the removal of EGMs, but
attributed this 'to a shift from traditional gambling channels, and part of a
general tendency in contemporary gambling, rather than as a substitution
effect'.[43]
Moreover, WA's restriction of EGMs to the casino and relatively low state-wide
incidence of problem gambling,[44]
also suggest that gamblers denied EGMs will not migrate to other forms of
gambling.
5.53
The proposition that migration would occur was not accepted by the
Productivity Commission, as the following exchange shows:
Dr Lattimore—Only that there has been evidence in relation to
at least a Norwegian experience in this area, where there have been a number of
changes to machines, not just precommitment. They have then been able to
examine the pattern of behaviour of the people as restrictions have been placed
on the gaming machines. What you did not see—bingo aside, curiously; but bingo
is a very safe form of gambling—
Mr Banks—You have not stood between my mother and a bingo
prize.
Dr Lattimore—was a significant increase in participation in
other forms of gambling when the measures were introduced. I am probably doing
a great disservice to the pronunciation of the researcher, Jonny Engebo, who
came from the Norwegian Gaming Authority. We can provide that information to
you if you are not familiar with it. Similarly, Ingeborg Lund did a study again
in Norway—a good place because of its natural experiments—and his conclusion
was that there was no evidence that people switched to other forms of gambling.
So you have to look at the evidence that is available, and from what we have
seen so far there is no evidence that there is a significant displacement
effect to other forms of gambling.[45]
5.54
Academic Dr Charles Livingstone also disputed the industry view:
I would like to make two brief further points. Firstly, some
industry people in particular have suggested that successful reduction in the
rate of problem gambling amongst poker machine gamblers would lead to an
increase in the rate of utilisation of other modes of gambling, particularly
the internet. There is no research evidence to support that and, in fact, there
is considerable research evidence to suggest quite the opposite. A recent paper
by Ingeborg Lund,[46]
which I will provide to the committee subsequently if they are interested,
deals with the Norwegian situation when poker machines were withdrawn from the
market there in 2007 and so provided a natural experiment in the behaviour of
gamblers. The results of that study, which was a very comprehensive study, were
published in an international gambling journal of good repute and suggested
that in fact the rate of gambling reduced even below that which poker machine
players had participated in before. So there is absolutely no evidence to
suggest that success in dealing with problem gambling in the poker machine
business would lead to any switching of modes.[47]
5.55
Mr Gary Banks, Chairman, Productivity Commission added:
...migration has not been seen to be a major issue. Poker
machine players tend to be poker machine players and are not all that likely to
suddenly become internet based gambling players or punters on the horse races.
There is a different kind of mechanism there. Another dimension that distinguishes
poker machine play from, say, internet gambling is to the credit of the venues,
and that is that they provide a social setting for people to go and gamble. For
example, we have seen that since the liberalisation of gaming machines women
have been far more active gamblers and, unfortunately, have also been recruited
into problem gambling to an extent far greater than in the past, because they
did not find other forms of gambling as attractive. They did not want to go to
the track and so on. But they find in going to the club, having a meal and a
drink and then playing the machines that they feel safe and secure and in a
social environment, without having to interact with people. Part of the benefit
of gaming is that it does provide these sorts of benefits...[48]
5.56
Mr Tom Cummings, a former problem gambler offered the following view:
There is a fundamental difference between a gambling addict
and a poker machine addict. I believe the majority of poker machine problem
gamblers are addicted to poker machines, not gambling in general. I know this
was certainly the case for me. Poker machine addicts will, for the most part,
not transfer their gambling behaviours to another form of gambling.
Even if this were true, it is no reason not to implement
mandatory pre-commitment. We are not talking about reforming a range of
gambling industries; we are talking about poker machines. If people did
transfer their gambling behaviours to other areas, then they would need to be
assessed next.[49]
Card swapping and fraud
5.57
Some witnesses were concerned that a mandatory scheme would encourage
card swapping by players or even fraud. Mr Trevor Croker, Managing Director,
Aristocrat, commented:
Even in Norway and other jurisdictions where we have seen
card based solutions, people are still buying and trading cards. These are not
necessarily complete solutions. I think finding a complete solution is going to
be a very difficult outcome. It should not be something we should not aspire to
but it would be very difficult. We have seen that card based or identification
based solutions have caused problems in other markets with people trading and
buying cards et cetera.[50]
5.58
Associate Professor Paul Delfabbro, University of Adelaide, pointed to
evidence of card swapping in one of the Nova Scotia trials. The evaluation by
Omnifacts Bristol found 'significant rates of card‐swapping: 20% of panellists had reported
a card at least once and 30% said that they had lent a card and 37% had either
borrowed or lent a card at least once'.[51]
5.59
That card-swapping could occur under pre-commitment was accepted by one
of the state regulators. The Independent Gambling Authority, SA, commented
about this issue in its report into smartcard technology in 2005:
The Authority accepts that there may be a level of identity fraud
or card swapping whereby the most serious problem gamblers will avoid the
operation of the loss limiting or exclusion program.[52]
5.60
Some suggested that biometrics could overcome this problem. According to
Responsible Gaming Networks:
The use of biometrics in pre-commitment systems has now been
recommended to overcome this problem by leading international academic
researchers in the prevention of problem gambling from the USA and Canada.[53]
5.61
Identity fraud by players seeking to circumvent the system was also
raised. The Independent Gambling Authority, SA, noted this could be an issue
when it enquired into smartcard technology in 2005:
Identity fraud is a problem in the general community. It is
true that some problem gamblers might seek to commit identity fraud in order to
gamble. This raises an issue about the level of assistance that a smartcard
system should be able to give to the general community, and the extent to which
gamblers ultimately must take responsibility for their own activities.[54]
5.62
The Victorian InterChurch Gambling Taskforce observed that the risk of
identity fraud needs to be balanced against the option that a player would only
need to wait 24 hours in order to re-set their limits. Any ID checking should
not create player hostility toward pre-commitment:
Against this, a person who does not like the limit they have
set themselves may only have to wait 24 hours to change their limit to avoid
the need of having to try and beat an identity checking system or to avoid
having to swap or purchase an access device from another gambler whose device
is below the set limit. Also, consideration needs to be given to minimising the
degree to which the identity checking measures create hostility or feelings of
unreasonable intrusion from gamblers, creating a feeling of ill-will towards
pre-commitment rather than a tool to empower gamblers in managing their
spending.[55]
Committee view
5.63
The evidence base from trials demonstrating the benefits of
pre-commitment is limited mainly to trials of voluntary systems. While trials
are only part of the total evidence base, these have demonstrated that
pre-commitment features such as limit setting can lead to small reductions in
gambling expenditure, including among problem gamblers and those at moderate
risk. The evidence also shows that contrary to the view espoused by Clubs
Australia, levels of problem gambling fell after the removal of EGMs in Norway
and migration to other harmful forms of gambling did not occur. The trials have
also shown that take-up of voluntary pre-commitment is relatively low, but that
barriers to take-up include concerns over privacy of player information and
lack of understanding and knowledge of pre-commitment features. A further trial
of pre-commitment as recommended by the Productivity Commission would provide
further useful information on the specific information requirements that
players need in order to use the system wisely.
5.64
The committee notes the selective use of evidence among some in the
industry. Industry representatives were quick to point out there had been no
trials of mandatory pre-commitment, using this point to attack the credibility
of any evidence for mandatory pre-commitment and ignore evidence from other
sources. The industry has stated its preference for a voluntary pre-commitment
scheme. Yet, when pressed by the chair to provide evidence that a voluntary
scheme would be effective in reducing revenues from problem gamblers and
reducing harms, industry was unable to do so.
5.65
The committee also recognises that with the introduction of a mandatory
pre-commitment scheme there is potential for unintended consequences to arise. Recognising
that not all systems are 'bullet proof', the committee considers that the best
method for addressing unintended consequences is through a risk management
approach that seeks to manage and minimise risk, balanced with an assessment of
the potential costs of any strategies and ensures a consistent approach is
taken by agencies. The proposed trial recommended in chapter six should also assist
in helping identify appropriate strategies to address these.
Recommendation 8
5.66
The committee recommends a risk management framework be developed by the
national regulatory authority (see recommendation 28). The framework should be
made available to other bodies involved in implementation to draw upon.
Recommendation 9
5.67
The committee recommends that pre-commitment cards will need to
demonstrate sufficient integrity and robustness in order to minimise identity
fraud but not require onerous signing up processes or infringe upon
individual's privacy.
Current pre-commitment arrangements
5.68
The committee was interested to obtain information on the full range of
current pre-commitment activities being undertaken in Australian jurisdictions.
States and territories
5.69
The committee was disappointed that despite inviting all state and
territory governments to make submissions to the committee only one, NSW, elected
to provide a written submission.[56]
Information on the current status of pre-commitment arrangements in the
jurisdictions is largely drawn from other publicly available sources. The table
below shows the current arrangements around voluntary pre-commitment in the
states and territories, as the committee understands them to be:
Table 5.1: Voluntary pre-commitment in states and territories
![Voluntary pre-commitment in states and territories](c05_1.gif)
Source: Adapted from the
Australasian Gaming Council[57]
Commonwealth and COAG activities
Problem Gambling Taskforce
5.70
Ms Liza Carroll, Deputy Secretary, Department of Families, Housing,
Community Services and Indigenous Affairs (FaHCSIA) provided the committee with
a summary of Commonwealth activity around pre-commitment and problem gambling.[58]
She outlined the department's lead role, in close consultation with Treasury,
in progressing gambling reforms.[59]
5.71
Ms Carroll outlined the range of harm minimisation initiatives that have
been developed over the last decade through the former Ministerial Council on
Gambling.[60]
She noted that the current reform proposals around pre-commitment, dynamic
warnings, cost of play displays and limits on ATM withdrawals are currently being
progressed through the Problem Gambling Taskforce located in the department. She
also advised that Dr Jeff Harmer, Secretary, FaHCSIA, chairs an
interdepartmental committee with senior representatives from other departments.[61]
COAG Select Council on Gambling
Reform
5.72
Ms Carroll also outlined the work and role of the Council of Australian
Governments Select Council on Gambling Reform, for which the taskforce provides
secretariat support. The council is chaired by Minister Macklin with assistance
from Minister Shorten and includes ministers from relevant departments of all
state and territory governments. At its first meeting on 22 October 2010, the
council agreed to establish Commonwealth-state working groups to look at
progressing pre-commitment reforms, ATM withdrawal limits and dynamic warnings
and cost of play displays. A forward work program focusing on online gambling
and indigenous gambling was also agreed.[62]
Ministerial Expert Advisory Group
on Gambling
5.73
In addition to the COAG group, Ms Carroll described the work of the Ministerial
Expert Advisory Group on Gambling that has been established to provide specialist
and technical advice to the government. Chaired by Professor Peter Shergold, it
reports to both Minister Macklin and Minister Shorten. The advisory group
includes a wide range of expertise drawn from across the gambling sector, as
well as academics, gambling counsellors and advocates and service providers.[63]
5.74
The committee notes the work of these bodies at the national level, but
was disappointed none chose to make a submission to the current inquiry.
Recommendation 10
5.75
The committee recommends that representatives of problem gamblers and
consumer groups be invited to join the membership of the Ministerial Expert
Advisory Group on Gambling.
5.76
The committee thanks the department for providing the legal advice that
was commissioned by the Commonwealth on the Commonwealth’s constitutional
competence and prospects for legislating in the area of problem gambling. It
notes this advice has now been publicly released.[64]
The committee looks forward to the opportunity to review any legislation that
may be subsequently introduced into the Commonwealth Parliament.
Research issues
5.77
During the inquiry a number of witnesses raised issues around research,
including the need to improve the evidence base, fill knowledge and data gaps,
improve coordination and develop the national research capacity.
Need to improve the evidence base
5.78
The need to improve research and build an evidence base was raised with
the committee by a number of witnesses. Associate Professor Linda Hancock
argued that current research efforts into gambling are deficient:
It is incredibly hard to put together a national picture. In
Victoria, for example, we only got venue based revenue figures when the
government put up the machines for sale.[65]
5.79
Professor Alex Blaszczynski argued:
The difficulty is, of course, that the quality of research
addressing many of these issues I think is lacking and as a consequence there
is a lot of speculation about what the impacts are of specific
responsible-gambling measures.[66]
5.80
Industry representatives also agreed that better research is needed, but
that this needs coordination. Mr Anthony Ball, Clubs Australia observed:
There does need to be
better research. Part of the reason we are sitting here and it is so
adversarial is that there is very little good research out there about whether
this proposal or any others are going to work. So there does need to be better
coordinated research, absolutely.[67]
5.81
Mr Trevor Croker, Aristocrat, also called for improvements to the
evidence base:
It is critical that a robust evidence base be established and
that any measures implemented in the interim be subject to review, evaluation
and, if necessary, amendment to ensure gaming policy is constructed on the
basis of firm evidence.[68]
Knowledge gaps
5.82
It was pointed out to the committee that there are considerable gaps in
current knowledge around how problem gambling emerges in individuals. Dr
Charles Livingstone observed:
I think one of the lacunae—there are many lacunae—in academic
research on gambling is that there are very few studies of any vigour or rigour
on gambling careers: how people move into and out of gambling activities. Most
people who have a gambling problem in Australia, we understand, have a gambling
career of about five years, during which they lose significant sums of money
and often their families and all the rest of it as well. The costs are very
significant. But most people actually recover without intervention. We do not
understand the pathways in, we do not understand terribly well the risk factors
associated with the likelihood of developing a gambling problem and we
certainly do not understand how people overcome gambling problems in any
significant way.[69]
5.83
He added that current research is often focused on treatment options but
that it should encompass broader issues including causal factors:
A lot of research has focused on counselling, and that is
important, but it has limitations. I think we need to have many more studies
which are ecological/anthropological/social and which look at the causal
factors and how we can address those. There are also some limited studies in Australia—and
this is an emerging field—relating disadvantage to all sorts of health
outcomes.[70]
5.84
Links between poverty and gambling should be explored, for instance:
One of those, clearly—from the existing research and from
research which we know is being undertaken currently—is about the relationship
between poverty, disadvantage and inequality and the likelihood that one will
have a gambling problem. Just as we know that those who are disadvantaged have
worse health outcomes, we also know—but we have not yet really examined why—those
people have a much greater likelihood of experiencing a gambling related
problem. So I think that the whole field of social research into gambling—which
is, I think, underdone very significantly in Australia—and the technical issues
that Richard has raised are also very worthy of study and understanding.[71]
5.85
Gaps in data collection that limit research capacity and policy
development were also identified by the Productivity Commission in its recent
report into gambling:
One area in which useful gains could be made relates to
gambling data. While much is collected, there is a shortage of data that are
directly applicable to policy issues. Moreover, the usefulness and value of
gambling data is diminished by differences in the way that some jurisdictions
specify, measure, record and report the data...There would be clear benefits
were jurisdictions to coordinate their collection of data to obtain more comprehensive
coverage and greater consistency across jurisdictions.[72]
5.86
In addition, the Commission pointed to inconsistencies across the
gambling surveys conducted by the states and territories which particularly
affect their scope and content:
While these [surveys] have proved invaluable, there are
significant difficulties in getting a coherent picture of gambling in Australia
due to differences in the content and implementation of those surveys.
Differences relate to their frequency; scope (such as which gambling activities
and expenditures are included); consistency in the questions used and in their
ordering; the gambling screens applied; and in the definition of terms (such as
what constitutes a 'frequent' or 'regular' gambler).[73]
Improving national research
capacity
5.87
It was put to the committee that one way to improve gambling research
capacity was to establish a national gambling research centre. Associate Professor
Linda Hancock suggested that a national, independent gambling research
institute could provide new information on gambling:
If you had a national monitoring system, if you had a
national independent gambling research institute, you would have all sorts of
new intelligence on gambling in Australia.[74]
5.88
She argued gambling research needs dedicated funding because it is an
area subject to criminal activity, such as money laundering. Research could be
funded by a tax on the gambling industry:
Senator CROSSIN—You are suggesting that some dedicated money
towards research in this area might integrate and pull together some of this.
Prof. Hancock—This very issue is why Michael O’Neil and I
wrote this paper, which is: Risky business: why the Commonwealth needs to
take over gambling regulation. In that we quote from the national inquiry
into money laundering, which names gambling as a risk area. At the moment it is
very easy to launder money. There is a need for an independent research based institute
and that is why we suggested a supertax on the gambling industry as a way of
funding it.[75]
5.89
Mr Mathew Rowell, Relationships Australia, Tasmania, argued that a
national, independent body was needed to hold national data:
There should be a regulatory body that is independent of the
industry that provides some distance and some oversight and that is able to
hold that data. In Tasmania, the gaming commission and the Department of
Treasury and Finance hold a lot of the data that comes out of the research that
we do here and engages with industry about getting access to that data. In the
same way, a national scheme should be regulated by the Australian government.[76]
5.90
Ms Cheryl Vardon, Chief Executive, Australasian Gaming Council, argued
that any national body should include industry representation:
It has come up several times and at the outset we are happy
to say that we also support a national gambling research entity which would
include the industry as a member. Gambling research in Australia is also a
relatively new area of industry. It is often repetitive, a bit directionless
from our point of view and needs better coordination.[77]
5.91
She added that protocols to protect the commercial sensitivities of data
collected from the industry would need to be developed:
Mr CHAMPION—If we had some sort of research body run by the
government, would that allow commercial sensitivities to be protected? Has that
been a barrier to research in the past?
Ms Vardon—The kind of organisation you are talking about is
different from the national body which is presently in place, Gambling Research
Australia. From the model of similar organisations overseas of course good
protocols between industry and government and regulators have to be in place.
There has been some effort over the years to begin work on those protocols.[78]
5.92
Mr Ross Ferrar, Chief Executive Officer, Gaming Technologies
Association, also supported a national research body:
Allow me to break your question down as I understand it. The
first part was: does your association support a national research body?
Emphatically, yes.[79]
5.93
Mr John Whelan, Australian Hotels Association, pointed out that current
state-based research initiatives lead to different priorities being developed
and a more co-ordinated approach was needed:
A change in the way that research is conducted across
Australia has been discussed. I think there is real merit in that. Because
gambling has been regulated at a state level and there are different priorities
in different states and territories, people have gone off and conducted their
own research separately. I certainly think there is merit in exploring that and
having government, industry and all stakeholders involved in the process.[80]
5.94
Professor Malcolm Battersby warned that relying on government
commissioned research is less than optimal:
The second conflict of interest is in the research.
Governments are pretty well the only groups in Australia that commission
research and most of that is targeted research, the research that they want to
have done.[81]
5.95
He suggested there needs to be more independent, academic research:
The alternative is something like the NHMRC or the ARC and they
have tended to fund very low levels of what I would call independent academic
research. Yes, I think there is a systematic bias, if you like, in terms of
what research is done and even how the findings are disseminated.[82]
5.96
The current national research body, Gambling Research Australia (GRA)—an
initiative of COAG's former Ministerial Council on Gambling—was established in
2001 following the Productivity Commission's 1999 report into Australia's
gambling industries. In its report at the time, the Commission proposed that
'a properly constituted national research facility' be established 'to
facilitate national cooperation and coordination in data collection and
research'.[83]
5.97
The committee notes the Productivity Commission recently criticised the
independence of the GRA, describing it as a 'satellite' of the Ministerial
Council on Gambling.[84]
The Commission also highlighted shortcomings with GRA arising from its current
structure, in particular:
-
GRA's lack of independence;
-
lack of research capacity and limited capacity to assess research
it commissions;
-
failure to incorporate stakeholder input; and
-
lack of transparency and accountability.[85]
Committee view
5.98
The committee accepts that there are significant gaps in research and
knowledge particularly around data collection and coordination and our
understanding of problem gambling. These limit the usefulness and relevance of
research efforts and their relevance to policy development. The committee
agrees that the national research effort around gambling needs to be improved
and better directed. The committee is also concerned that current funding
arrangements whereby governments directly fund research while obtaining
gambling revenues, raises issues around conflict of interest and bias. The
committee also accepts the view that GRA, which is tasked with driving and
coordinating national research, is hampered by current structural arrangements.
While acknowledging the need to improve arrangements in this area the committee
is concerned that any extra research capacity should not result in the unwarranted
collection of personal information or intrude upon player privacy.
Recommendation 11
5.99
The committee recommends that a national, accountable and fully
independent research institute on gambling be established to: drive and
coordinate national research efforts, monitor the effectiveness of policies to
reduce harms from problem gambling and build an evidence base sufficient to better
inform future policy development. The committee recommends that annual funding
for this new body be derived in part from a small levy on gambling taxes
collected by state and territory governments and a commensurate contribution
from the Commonwealth.
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