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Gaming the gaming industry

Jun 20, 2019 • 14m20s

Australia records higher gambling losses than any country in the world, while the sector uses faulty research to avoid regulation.

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Gaming the gaming industry

18 • Jun 20, 2019

Gaming the gaming industry

[Theme music]

ELIZABETH:

From Schwartz Media. I’m Elizabeth Kulas. This is 7am.

Australia records higher losses from gambling than any country in the world. Our politics encourages the industry for the sake of tax revenues...and for fear of its powerful lobby. James Boyce on how the sector uses faulty research to avoid regulation.

[Theme ends]

[Poker machine noises]

[Poker machine music starts]

ELIZABETH:

James, how big is the problem of gambling in Australia? What's the scale of what we're talking about?

JAMES:

The scale is around 24 billion dollars a year lost in gambling. Over a thousand dollars per adult per year.

ELIZABETH:

James Boyce is a writer and historian. He wrote about Australia’s gambling problem for The Monthly.

JAMES:

These are the largest gambling losses in the world, not just by a small amount but by a significant amount, like they arere, in terms of per capita losses three times the U.K. Nothing is approaching the Australian gambling losses.

[Poker machine music ends]

[Music starts]

Archival tape – Unidentified journalist

"Nearly a quarter of a million Australians either have an addiction to online gambling or are at risk of heading down that path."

Archival tape – Unidentified woman 1

"We have a massive problem with it. It’s under-regulated, there are no consumer protections, it’s shoved at us constantly..."

Archival tape – Unidentified woman 2

"You never know when you are going to win… that’s the excitement, the thrill, the risk, the chase."

[Music ends]

ELIZABETH:

What makes Australia’s gambling culture unique? Why do we have such massive losses?

JAMES:

What's unique and distinctive about Australia, is that modern sorts of poker machines in Australia, they're not just in casinos or gambling only venues, but they're in the neighbourhood, they're out there in you in your local pub or club. This is the only place in the world, at the moment, that does that on a national scale. The Australia Institute has found that 76 per cent of the world's poker machines that are outside of casinos are here in Australia.

ELIZABETH:

And how did we get here, James, how did Australia develop that relationship with gambling?

JAMES:

Well if you listen to the state governments and if you listen to the gambling industry, they'll say, you know it's all part of Australian culture.

Archival tape from an old film – Unidentified man:

"But I’ll have you know this is a fair game, open and above boy, watch carefully. Now up.. [coin toss, coin clatters, yelling]"

JAMES:

It goes back, you know, you look at the soldiers playing two-up in the trenches.

Archival tape from an old film – Unidentified people:

"There some of my own boys, I’m afraid."
"They’re rather wonderful, outlandish in a sort of way."

JAMES:

And love of the horse races it's just ingrained in who we are.

Archival tape from an old film – Unidentified man:

"If bobby doesn’t win today, he’s finished, suppose I am too."

Archival tape – Announcer:

"And Phar Lap races to the lead."

JAMES:

Now, this is an absolute misrepresentation of history, I can assure you as a historian. From the late 1980s early 1990s, you had state governments running out of money. Health and education costs were going through the roof. So they turned to poker machines as a way of saving themselves. We weren’t a particularly big gambling country before that. This is all being driven by state governments, since that time. It's been a deliberate government policy choice.

ELIZABETH:

OK. What does it mean that we've had this policy development? What does it mean for individuals?

JAMES:

The effect of the harms being caused range all the way from the loss of tenancies, relationships break up, people losing jobs, going to prison’s. A Victorian study found that gambling was the second leading cause of imprisonment of people in Victoria, second to illicit drug use.

ELIZABETH:

And why aren't governments doing more to curb this?

JAMES:

Well, the traditional answer for that, and the one you'll hear the most, is that the state governments themselves are addicted to poker machine revenue. Now there is some validity in this argument of course, especially in Victoria, which has been the state most successful... well over a billion dollars a year of their state budget comes out of poker machine taxes. But I would argue the bigger answer is actually not that. Only about 25 per cent of poker machine losses around Australia are actually returned to state governments, and it should be a course far higher than that. And that points to the real problem here of why we're we've got no action which is the political power of the industry. There are many politicians who understand that if they were to say that they were going to institute any measures at all that had any benefit, that would mean reducing gambling losses, the poker machine industry will punish them.

ELIZABETH:

Right. How does that power the gambling industry actually work in real time?

JAMES:

Well it's partly direct donations, so they directly donate to political parties and to individual candidates. But it's also fear. Any politician or political party that does take a stand for sensible rational reform. Their opponents are given whatever they need to defeat them, say so they're given enormous financial support.

[Music starts]

ELIZABETH:

So when people do criticise the industry, what is the industry response to that criticism?

JAMES:

Soon as you name out the problem, their main first call of defence is always this research they point to. That over 99 per cent of Australians gamble responsibly.

ELIZABETH:

So responsible gambling?

JAMES:

Yeah, so why punish them? The rights, freedoms, the fun of everybody else who gambles responsibly... this is their main propaganda weapon of choice. But it's also a complete fabrication. Responsible Gambling framework and ideology is built on a lie that gambling harms are confined to a tiny proportion of the population. They are not.

ELIZABETH:

We’ll be right back.

[Music ends]

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ELIZABETH:

So the gambling industry relies on this problem gambling research, which it largely conducts according to its own terms. How are they collecting this information?

JAMES:

Well they, how they measure the problem gambling in the community is literally to do random telephone calls, like, normal market research survey. You just do random phone calls until you get someone to answer and until you get someone who's prepared to sit down and do the survey, which is a series of questions about your gambling behaviour.

[Phone rings]

[Music starts]

JAMES:

So, for example, they’ll ask you ‘how often you’ve needed to gamble with larger amounts of money for the same feeling of excitement?’

"How often do you bet more than you can afford to lose? Would you say never, sometimes..?

How often if you got bad bet another day to try and win back the money you lost?

How often have you borrowed money or sold anything to get money to gamble?

Thinking about the past year as well, how often have you felt that you might have a problem with gambling?"

[Music ends]

JAMES:

Now to expect that people would be able to honestly admit to face up to their extent of the gambling harm they are causing themselves and to their loved ones, to an anonymous person over the phone, I mean this is just ludicrous. The Productivity Commission to test what's a fairly obvious finding, that people would not be in a position able or willing, to answer these questions honestly to an anonymous researcher over the phone, did ask problem gamblers later who were in treatment whether they would have been in a position to do this. And of course, unsurprisingly, found that the majority would not have been. The other power that they use in this research is that they deliberately mislead the Australian public by using this term “problem gambling.” Now, most people in the community in plain Australian English, they assume that problem gambler means somebody with a gambling problem. So when they say ‘oh it's less than 1 percent of the Australian population are problem gamblers.’ The average person in the street understandably and reasonably thinks ‘oh that's less than 1 percent of the population who have a problem with gambling.’ Now it's not that at all, because the term “problem gambler” in these studies has a specific clinical derived definition, it's people with the most severe forms of gambling harm, people with a serious pathology.

ELIZABETH:

And James, what's the outcome, if we look at that research – research that calls people and hopes to get them at the right time, research that asks people to self-identify and that defines their problems incredibly narrowly and intensely, why are these systems built to keep the research working in the way that it does?

JAMES:

Well, the outcome of the research is simple: it just cements the status quo. It just doesn't lead to change because it's used to reassure everybody that there's no need to make policy changes. That everything's hunky dory. So it's not the industry's problem. It's not the government's problem. It's not a policy issue. We don't need to change anything, because 99 percent of the population are not experiencing harm.

ELIZABETH:

And James what is that real headline figure actually likely to be?

JAMES:

More reputable studies for one recently done in the ACT by the ANU found that over 60 percent of poker machine losses were done by people who experience significant levels of harm by their gambling. So only less than 40 percent of poker machine losses in the ACT were from non-problem gamblers.

ELIZABETH:

Wow.

JAMES:

We start to talk about non-problem gamblers, that's much more accurate, and we know that non-problem gamblers account for less than half of poker machine losses.

ELIZABETH:

Here we have an industry that controls a lot of the research and data we have on its behaviour. They pay government in various ways. It sounds a lot like where tobacco was 20, 30 years ago.

JAMES:

It's, it’s exactly the same. We had tobacco ensuring that the real questions weren't being asked for decades, decades after we knew the harm being caused. The only way through this was to reduce consumption. But we didn't get to that position until we freed tobacco research from the influence of the tobacco industry. The only way, you reduce the harm from tobacco is to reduce consumption

ELIZABETH:

And to have independence from industry in gathering data, so that you do have data that’s..?

JAMES:

Independent, absolutely.

ELIZABETH:

So the gambling industry has picked up the tobacco playbook and run with it. How do we get our way out of this situation?

JAMES:

Well it's... the Public Health approach needs to be exactly the same as with tobacco. The way that you reduce the levels of gambling harm in the community is very simple. And the way we do that is to properly and responsibly regulate the industry in the way that the rest of the world does the way Australia used to do. We've got enough evidence after three decades of research to know the harms being caused, to know that this is a very dangerous product we’re talking about.

ELIZABETH:

And James I guess that's how we've ended up with a whole industry that covers itself by the fiction of responsible gambling. And we've just had a federal election and no one talked about gambling almost at all?

JAMES:

Mmm! Far too scared to talk about it, and if you think about it

[Music starts]

JAMES:

This is not about ideologies. This is just about rational, sensible public policy reform. But the politicians, you'd expect, who'd have a particular concern with it from the left and the right are as unwilling as any others to take them on, because the industry is just so powerful and they're just too scared of them.

ELIZABETH:

Thanks for chatting to us, James.

JAMES:

Oh thanks very much, Elizabeth. Pleasure to talk to you.

[Music ends]

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ELIZABETH:

Elsewhere in the news:

In Florida, Donald Trump, has launched his re-election campaign for president. In a 76-minute speech, he rallied against many of the targets of his first campaign: the press, the elite, politicians. To cheers, he dismissed them as people who “look down with hatred on our values and with utter disdain for the people whose lives they want to run.”

And in Australia, the High Court has ruled that a sperm donor who was involved with the parenting of a child is legally that child’s father. The decision over-turns a ruling of the family court and could have implications for other, similar cases.

I’m Elizabeth Kulas. This is 7am, See you Friday.

Australia records higher losses from gambling than any country in the world. Our politics encourages the industry for the sake of tax revenues. James Boyce on how the sector uses faulty research to avoid regulation.

Guest: Writer and historian James Boyce.

Background reading:

The lie of 'responsible' gambling in The Monthly
The Saturday Paper
The Monthly

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7am is hosted by Elizabeth Kulas. The show is produced by Emile Klein, Ruby Schwartz and Atticus Bastow with Michelle Macklem. Our editor is Erik Jensen. Our theme music is by Ned Beckley and Josh Hogan of Equate Studio.

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18: Gaming the gaming industry