Monday, 21 June 2010

Tony Robinson's Poor Maths

For a Minister in charge of Victoria's pokies and consumer affairs, we're entitled to have someone who can add. Or someone who has bothered to read the most important report to be released in his portfolio. Or at least someone who has knowledge of the laws he is charged with administering. Judging by what Tony Robinson said in response to Green MLC, Sue Pennicuick, Victoria's Minister for Gaming can't add, has not bothered to read the Productivity Commission's draft report and is deficient in his knowledge of the Gambling Regulation Act, the law he is charged with administering.
Here's what he said:
"There was an element of the PC report that we disagreed with, and it was the means by which they came to a conclusion about the maximum loss rate per hour. They came out with a figure of $1200. This was actually predicated on a $10-bet limit, so straightaway in Victoria we are at $5. As I understand it — as it is been explained to me — you could only lose $1200 per hour if you left your finger on the button continuously and did not take it off for a full hour and you did not achieve a single credit in that time. That is a hypothetical figure; I do not think it bears a relationship to what happens commonly. It might happen once or twice a year, but I am just not aware of too many people who sit there for an hour — you would get a very sore finger."

Let's consider the facts.

At the time the Productivity Commission's draft report was released, the maximum bet per button push was $10 but, contrary to what Tony Robinson stated, the PC wrote it down to $5. So it would seem that the Minister failed to read the report.

One then needs to calculate how many times a gambler is legally permitted to push a button every hour. This is found in paragraph 9.2 of the Victorian additions to the National Gaming Standards where it states:
"For a game approved by the Commission after 1 January 2003, unless the game is to be operated in the approved “specified area1” the spin rate or interval between spins on the gaming machine must not be less than 2.14 seconds per play."
It's best to read the actual page where the Productivity Commission findings appear. Here's the relevant page of their draft report.

The Victorian legally permissible loss per hour at 2.14 seconds per $5 spin is not $1,200 but $8,411.21. What the PC did to get to $840 per hour is to extrapolate the national return to player of 90% although they heavily self qualified even that calculation. This is the issue of volatility already the subject of an earlier blog.

But let's be more realistic and build in some delays between button pushes and calculate the maximum amount that could be lost. At 3 seconds per push, the calculation comes to $6,000 per hour. This statement made by Tony Robinson about $1,200 is terribly wrong.
"you could only lose $1200 per hour if you left your finger on the button continuously and did not take it off for a full hour and you did not achieve a single credit in that time"
Tony Robinson misses the true calculation by a factor of 5x!

What is even more troubling is the Minister's lack of awareness of the reality of problem gambling when he says:
"I am just not aware of too many people who sit there for an hour — you would get a very sore finger"
Tony Robinson needs to get out in his electorate more and, at least, visit the two Woolworths' associated venues, the Blackburn Hotel and the Mitcham Hotel. He'll find gamblers not only sitting in front of these harmful machines for much more than an hour but also, (through promotions like auction dollars) being encouraged to do so by our largest retailer.

All of this underlines the need for the most simple solution to be adopted. That's the $1 per button push / $120 per hour volatility loss limit / $20 maximum cash acceptor. It's relatively inexpensive to implement, will not affect the truly recreational gambler and target the addicted.

Monday, 7 June 2010

Is John Haddad "The One"?

There are similarities between the world promised by the promoters of the More Pokies for Mildura (otherwise known as the Mildura Jewell casino) and the world of The Matrix. Have a look at this trailer for the first installment:

How would you know the difference between the dream world and the real world?

In his full colour brochure, John Haddad spruicked his casino operation credentials with a letter from The Hon Warwick Smith MP then a minister of the Howard government. Click on the image to read the operations credentials page.From reading this page, one would assume that John Haddad built and operated the Christmas Island casino as managing director of The Federal Hotels Ltd. As Chairman of Casino Management International, he was in some way successful as the administrator of the Christmas Island Casino.

Surely, he would not be spruicking failures or absence of involvement?

Enter the world of The Matrix where everything seems to be not as it should.

In September 2001 and inquiry was held into the tender process followed in the sale of the Christmas Island Casino and Resort by the federal Joint Standing Committee on the National Capital and External Territories. Click here to read the report. Paragraph 2.4 provides as follows:
"Construction of the resort began in the late 1980s. In 1992, following the failure of negotiations with Federal Hotels, which had held the original contract, (Christmas Island Resort Pty Ltd) sought expressions of interest from other companies to oversee operation of the casino and resort."
The footnote to this paragraph states:
"In 1988-89 CIR entered into an agreement with the Federal Hotels group to operate the resort. During 1992 the three-year contract expired and negotiations began over a new agreement. The two parties were unable to reach a new agreement. Federal Hotels, however, continued to provide technical support while arrangements were made for a new operator of the hotel and casino."
The track record is to expect John Haddad to stick around for three years.

According to a 4 Corners report, the Christmas Island casino was full of controversy. Click here to read a reference to that 4 Corners report.

Given that John Haddad spruicks his appointment as administrator, one would expect the reality that he did a fab job. This does not seem to be the case. News reports from July 2009, indicate that the casino has been closed for more than 10 years. The buildings have fallen into disrepair and that it may now be used to deal with the influx of asylum seekers. Click here to read the 2 July 2009 report in The Age.

It seems that the 'real world' of John Haddad's casino management, based upon Christmas Island, is for irreconcilable differences to develop after 3 years, questionable foreign involvement, and eventual closure leaving deteriorating buildings.

Quite different from the 'dream world' John Haddad is seeking to impose upon the people of Mildura.