The Guardian 23 April, 2008
Legal war
over new Victorian "pokies" rules
Peter Mac
Victoria’s gambling corporations, Tattersalls Club and Tabcorp, have threatened legal action against the Victorian government, which intends to change the state’s poker machine licensing rules.
NSW introduced poker machines in the 1950s. All states have them at clubs and pubs except for Western Australia, where they may be found only in the casinos. Victorian governments resisted their introduction until 1990. The current government now receives $1.5 billion per annum in gambling taxes, of which $941 million comes from electronic gambling machines.
The state also has an estimated 32,000 poker machine "problem gamblers". Now there’s a euphemism! The misery which these machines inflict on families and individuals, particularly from the working class, is now just as evident in Victoria as in other states.
Tattersalls and Tabcorp currently have a duopoly on licences for Victoria’s 30,000 poker machines, of which 2,500 are installed in the Crown Casino. However, the licence period ends in 2012. Last week the Brumby government announced that in 2010 it will auction off the remaining 27,500 licences, that no organisation will be allowed to hold more than 35 percent of these licences, and that half of them are to go to clubs and half to hotels.
Hotels will no longer need to transfer the machines’ takings back to the two corporations, both of which will be forced to compete against each other and other corporations for licences, and face an estimated $1.3 billion loss in profits. Not surprisingly, the government’s announcement caused the share prices of both companies to plummet.
The potential loss of licences isn’t the only fly in the corporate ointment. To the government’s credit, automatic vending machines will be banned from gaming venues, and pre-commitment mechanisms will be introduced to the machines, to prevent problem gamblers from spending beyond a previously-agreed limit.
Licences for the gambling game Keno, which are currently shared by the two companies, and the licence for wagering, currently held by Tabcorp alone, will also be sold at auction.
Gamblers the big losers
Despite the government’s initiatives the future is likely to be even bleaker for gamblers, particularly problem gamblers. The loss of the ATMs, and the introduction of the pre-commitment mechanisms, are welcome, but they’re unlikely to make a very big impact.
Moreover, the number of machines will not be reduced, and they will now be more widely located in hotels and clubs, especially because of the government-imposed limit of 105 machines for any one venue. It is also likely that Tattersalls and Tabcorp will begin to purchase hotels, or interests in them, so that even more people will be affected by the "pokie" cancer.
As one commentator put it, "Brumby may have given the gaming giants a bloody nose, but he has also entrenched poker machines at present levels as a staple feature of Victoria’s social and cultural landscape".
Grim reapers
Some years ago the ABC’s Four Corners program revealed the wording of a confidential report prepared for Tattersalls by a psychologist, who unwisely referred to the danger (for the corporation) of having the gamblers "trance" interrupted.
This confirmed a suspicion long-held by many commentators that a certain combination of music and lights emanating from the machines can induce a trance-like condition in which the player is being compelled to keep using the machine, and that the clubs have deliberately used this effect to massive financial advantage.
The introduction of smoking bans in gaming areas seriously threatens this practice, because the desire to smoke is strong enough to overcome the trance, and the obligation to leave the venue for a smoke may result in the gambler deciding to cut his or her losses and go home.
Hence the attempt by many clubs to counteract the bans by introducing partly-covered "outdoor" areas in which players may continue to play the machines.
The clubs and other big poker machine licensees always argue that their intentions are benevolent, pointing to their financial support for local football organisations and other good works.
However, this financial support is miniscule in comparison with the profits they derive from the poker machines. The "benevolence" of Tattersalls may also be derived from the statement attributed to its chief executive, in testimony given to a Victorian inquiry this year, that he wanted to "screw the problem gamblers for as long as he could until he was forced to stop by government legislation".
As in other states, the appropriate policy for the Victorian government is surely to take initiatives to reduce the appalling impact of poker machines.
Here are some suggestions:
progressively reduce the number of machines in the state
enforce measures to drastically restrict the amount of money that gamblers (particularly problem gamblers) can lose on the machines
introduce labelling of machines to identify them as a hazard, just like cigarettes
ban the use of trance-inducing music and lights at gambling venues
limit the length of time in which any gambler can use the machines
provide support, if necessary financial support, for any club which wishes to drastically reduce the number of machines on its premises, or even to eliminate them altogether
introduce advertising and public education campaigns to expose the real effects of poker machines and other gambling facilities on Australian society.