1.4       In response, Clubs Australia and the Australian Hotels Association launched what was nothing more than a scare campaign against the reform, targeting Government members in marginal seats. Assertions from these organisations included the claim that people would need a ‘licence to punt’, that the Government was going to track people’s gambling activity, and that any type of gambling reform would see clubs no longer able to make contributions to their local communities. I have attached a letter sent from Mr Wilkie and myself to all Members of Parliament in 2010, refuting those claims.

1.5       It is worth noting at this point that several studies, including one by the Productivity Commission, have raised concerns about how much sporting clubs actually return to their local communities in exchange for the tax breaks they receive as not-for-profit organisations. Most recently, a report commissioned by Uniting Care and undertaken by Charles Livingstone, Chebiwot Kipsaina and Angela Rintoul of the School of Public Health and Preventative Medicine at Monash University found that, on average, clubs in New South Wales returned the equivalent of only 1.3 per cent of their poker machine losses to the communities they claim to support.[4]

1.6       However, in early 2012, the Government gave in to the pressure from the gambling industry, following the recruitment of the Member for Fisher, Peter Slipper MP, into the Speaker’s Chair. No longer in need of Mr Wilkie’s support to stay in government, the ALP withdrew support for mandatory pre-commitment and instead said it would trial mandatory pre-commitment in the Australian Capital Territory, and work towards implementing a form of voluntary pre-commitment across Australia. This was a blatant breach of the agreement Mr Wilkie had entered into with the Prime Minister.

1.7       It is also important to note that the Opposition has sided with the industry throughout this process. It did briefly consult with the intention of forming its own policy for reform, but it appears this has not progressed.

1.8       Ultimately, this issue must be about problem gamblers and those directly affected. I acknowledge the Committee for the time they have taken to speak to people who have been affected by addiction, either directly or indirectly. I thank the Committee for its efforts in this area, because those discussions have played a vital part in informing Committee members and putting a human face on this issue.

1.9       Sadly, however, what should have been about human suffering and a dangerous product has now become all about vested interests. Instead of being a fight for what is right, it has become a fight for what is least offensive to those with the most money.

1.10   I wish to formally note that I consider both Mr Wilkie and the Australian Greens have acted in good faith throughout this process. I believe them when they say this is only the first step and they will continue to fight for reform.

1.11   However, I am fundamentally unable to support this bill. I cannot support legislation that is so qualified and conditional, and fraught with technical difficulties. It will also not help problem gamblers in any significant way. Further, this legislation is a direct result of a fundamental breach of trust on the part of the Government and, as is set out below, the Government cannot credibly explain its position.

1.12   Voluntary pre-commitment does not work. Formal studies have repeatedly shown that these systems are not effective at limiting losses.

1.13   A study into poker machine pre-commitment schemes prepared for the Nova Scotia Gaming Foundation in Canada found that voluntary schemes consistently failed because they relied on the willpower of players.[5]

1.14   The Nova Scotia study found that high risk players were unlikely to use a voluntary system. It also found that high risk players would often continue to gamble beyond their limits unless they were locked out of play and that they lost more money than they intended "most times they play".[6]

1.15   The take-up of voluntary pre-commitment schemes has also been shown to be woeful. In South Australia, Worldsmart Technology’s J-Card loyalty scheme allows a player to set self-imposed limits on time and spending. After reviewing Worldsmart’s scheme, the Productivity Commission reported:

“Relatively few consumers have enabled their loyalty card for pre-commitment features. By mid-September, 233 of just under 32,000 loyalty card members (or 0.7 percent) had enabled pre-commitment options.”[7]

1.16   Ultimately, the idea of voluntary pre-commitment seems to be based on how governments believe people should behave, rather than how they actually behave.

1.17   Beyond this fundamental issue, it is important to note that the bills also contain significant flaws and weaknesses. I will be moving a number of amendments in the Senate to highlight these, but my main concerns relate to the structure of the pre-commitment systems and the lack of incentive for any party to establish such a system. For example, the penalty provisions in the National Gambling Reform Bill 2012 contain an exemption for where ‘there is not an approved pre-commitment system for a State or Territory’.[8] A similar exemption applies to the gaming machine regulation levy, which is designed to encourage compliance among organisations that are not constitutional corporations.[9]

1.18   The only place FAHCSIA could point to a requirement for a pre-commitment system to apply across a whole state or territory (and therefore cover all machines in that state or territory) is in the Explanatory Memorandum to the bill.[10] Further, the penalty provisions to require compliance do not apply if there is no system, so it is hard to see how this legislation could be enforced at all.

1.19   Most importantly, this legislation will not provide immediate assistance to problem gamblers, or those at risk of problem gambling. The fact that the voluntary systems are not required even to have a default loss limit is very problematic.

1.20   I would have been more inclined to support this legislation if it had also mandated that machines at least should be capable of being limited to $1 bets and hourly losses of $120, as recommended by the Productivity Commission.[11] This measure was intended to work in conjunction with pre-commitment, and is vital in reducing the intensity of play. Poker machines in Australia operate at an incredibly high intensity, which many consider increases their addictiveness.

1.21   For a product that is touted as ‘entertainment’, it seems unbelievable that gamblers can lose up to $1,200 an hour.[12] This cost can hardly be considered a form of recreation. Limiting losses to $120 an hour will not only reduce the harm caused by these machines, but bring them more into line with an average person’s idea of ‘recreational spend’. The Commission’s research indicates that some 88 per cent of recreational players and about 80 per cent of all players never spend more than $1 per button push.[13]

1.22   Not only has the Government disregarded this key reform, it refuses to give the reasons for this policy position. Previously, it has claimed that the cost of implementation will be excessive, with the Minister for Families, Community Services and Indigenous Affairs, the Hon. Jenny Macklin MP, claiming in January this year that it would cost $1.5 billion.[14] However, despite promising at that press conference that the Department would release the basis for those figures, they have never been publicised.

1.23   Indeed, two Freedom of Information requests from my office failed to reveal the basis for that figure, and resulted in documents that were more redactions than information.

1.24   Further, the Government has not explained with any credibility how it willing to make the machines mandatory pre-commitment ready (at the ‘flick of a switch’) but refuses to do the same for maximum $1 bets. The maximum $1 bets reform was the primary reform recommended by the Productivity Commission, yet the Government refuses to even have machines capable of supporting it.

1.25   I understand that this has become a difficult political issue for the major parties. Tragically, it appears this has now become a ‘tick and flick’ exercise for the Government, just to get the ‘problem’ off the table.

1.26   However, this issue will not go away. Earlier this year, the Stop the Loss Coalition released data from a survey by AMR Research that revealed over 70 per cent of Australians want poker machine reform, and only two in ten believe no further action is needed. Further, over 80 per cent supported the introduction of maximum $1 bets, which rose to a massive 90 per cent for intending ALP voters.[15]

1.27   To put this in context, most Australians would know of someone who has been affected by poker machine addiction. The Productivity Commission figures from 2008/09 indicate that over $10 billion a year is lost on poker machines,[16] with problem gamblers accounting for between 22 to 60 per cent of that figure, with 40 per cent the accepted average. Also according to the Productivity Commission, there are between 80,000 and 160,000 adult Australians who are suffering from ‘significant problems with their gambling’, with a further 230,000 to 350,000 at risk of developing further problems.[17] On average, each of these problem gamblers affects seven other people.[18]

1.28   Too many Australians have first-hand knowledge of the damage caused by poker machines for the issue to disappear from the political radar, as perhaps both the Government and the Opposition hope.

1.29   Ultimately, to use gambling terminology, in my view this legislation is a ‘loss disguised as a win’. It will not do enough to help existing gamblers or curb problem gambling in the future, and those measures it does contain may not be enforceable.

1.30   To that end, I call on the Government and the Opposition to support a plebiscite on the issue of maximum $1 bets and $120 maximum average hourly losses to determine the will of the Australian people.

1.31   The Government has not explained why it is willing to have machines mandatory pre-commitment ready but not maximum $1 bet ready, which is arguably a cheaper, simpler, and easier to explain option that will be more effective. The Government’s failure to support this measure as recommended by the Productivity Commission is, I believe, a cynical act of bad faith on their part.

Recommendation 1: That the bills not be passed unless amended to include provisions for the implementation of maximum $1 bets and hourly losses of $120 on all gaming machines in Australia.

Recommendation 2: That there be a plebiscite to be held at the next Federal Election to determine the will of the Australian people on the maximum $1 bet and $120 hourly loss recommendation of the Productivity Commission.

NICK XENOPHON

Independent Senator for South Australia

Attachment 1 (PDF 2795KB)

Attachment 2 (PDF 721KB)

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