Wednesday, 27 October 2010

Suicide Barriers on the Westgate

After years of promising action, suicide barriers are finally being erected on the Westgate Bridge linking Melbourne and its western suburbs as a part of a reported $1.4 billion upgrade. It is deeply sad that people act to end their lives in this way. The evidence linking so many Victorian to thoughts of suicide makes obscene those who argue so vehemently against measures that reduce the harm of gambling on the pokies.Readers may recall the Herald Sun story where it was revealed that about 12,000 Victorians pokie gamblers contemplate suicide. This is based upon a huge Victorian state study with 15,000 participants. Yet the Victorian government fails even to adopt the smallest of steps to full pre-commitment as recommended after 11 years of study by the Productivity Commission.

These suicide barriers symbolise the obscenity that seems Victoria's pokie policy. Do nothing that will even stem the flow of pokie gambling losses. Let not even the most damaging evidence of harm to Victorians get in your way.

About $20 million will be spent on lights on the Westgate's poles and cables. Imagine what the benefits would be if the same $20 million were spent on software that limited each pokie bet to no more than $1 and limited the volatility of pokies so that gamblers could lose no more than $120 per hour.

I do not know how these people are able to sleep at night. I am reminded of their terrifying contempt for the good of Victorians every time I drive over the Westgate.

Friday, 22 October 2010

Jan Juc's Bittersweet Victory

While there is still time left for the Beach Hotel to lodge a VCAT appeal, it was nice to be part of the first decision in many years by the VCGR to knock back a pokies application. Unfortunately, the decision is a poor one. In this blog the focus is on the issue of the applicant demonstrating that it would practice responsible gambling procedures should it be successful.

Here's the finding of the Commission under the heading of "Responsible gambling proposals"
"Mr Pertzel set out in his witness statement the work that has been carried out by him as general manager in order to prepare for the possible introduction of egms at the Hotel, including development of a staff training manual and a venue-specific responsible gambling policy. However, copies of these documents were not provided to the Commission. ..."
So we really haven't a clue what his policy might be. The paragraph goes on about how the policy that was not produced will be disseminated and the legal requirements about codes of conduct. One would have expected an adverse finding.

Not from this Commission.... Here's their finding:
The Commission has also been satisfied that if the application is approved, appropriate measures would be put in place to foster responsible gambling and address any instances of problem gambling that might arise.
The logical conclusion that can be drawn is for applicants to produce nothing because you'll automatically pass this apparently inconsequential test.

But it gets worse. Much much worse.

Mr. Pertzel, on behalf of the Beach Hotel produced job descriptions for his proposed venue manager and the assistant venue manager. There is no reference to responsible gaming practices in the job descriptions of either the venue manager nor the assistant venue manager. He does make reference to gaming performance and that a report is to be made to a David Blewett. There is no evidence lead as to Mr Blewett’s involvement with the Beach Hotel nor his qualifications.

Mr Pertzel’s evidence particularising his investigations into Responsible Gaming practices discloses minimal investigation. While his written statement indicates that contact had been made with problem gambling help services, the fact is that there are no such services in Surf Coast Shire. The only gambling help service is located in Geelong. There is no evidence of correspondence between this service and the Applicant.

Mr Pertzel’s co-director, Mr Closter indicated his involvement with management would comprise no more than showing up “on Friday and have a few beers” and that he had “a chat about it over the last few weeks”. While Mr Closter vows “best practice”, there is no evidence that either he or Mr Pertzel have made substantive investigation to be able to determine what “best practice” might be.

There was no evidence before the Commission that the Applicant nor anyone associated with the Applicant had undergone any training whatsoever in responsible gaming practices.

During the hearing, Mr Closter stated a mistaken impression that the VCGR supplies training. The impression that the AHA provides training in responsible gaming indicates ignorance of the joint venture disclosed on the Association’s web site with the William Angliss Institute.

Mr Closter’s evidence and the Chairman’s responses are set out below:
MR CLOSTER: Look, firstly, I like to delegate as much as I can to Rohan, so I’d show up there on Friday and have a few beers, it’s not necessarily I’m involved in the management. That’s strictly – it’s more on the financial side. In terms of responsible gaming and service of gaming, certainly Rohan and I and Stuart have had a chat about it over the last few weeks. And there’ll be, you know, best practice. So whatever the best practice is, and that is not trading 24 hours, as an example. We’ll be trading in the hours that we do trade in currently. Things – all the training that is available out there, supplied by either the VCGR or the AHA, and any other governing bodies, is what we’ll take up, as directors and as employees of the property.

MR THOMPSON: Have you considered getting consultative help in that regard?

MR CLOSTER: Certainly we will, yes.

MR THOMPSON: There’s some good people out there, I think, that are very well able to provide that to you.

MR CLOSTER: Yes, absolutely.

MR THOMPSON: Rather than have to reinvent the wheel.


Mr Thompson’s question and suggestion to Mr Closter fills a significant gap in the Applicant’s knowledge of responsible gambling practices. Rather than suggesting means to engage persons who might fill a gap in the Applicant’s knowledge, with respect, the Commission should be testing the applicant’s own suitability. Mr Thompson’s suggestion to Mr Closter that “rather than reinventing the wheel” Mr Closter engage a consultant is suggestive of a diminished need to be personally and fully informed about responsible gaming practices. Neither Mr Closter nor Mr Pertzel demonstrated that they would have sufficient knowledge to ascertain whether a consultant was satisfactorily discharging their obligations.

I did put the above submissions to the Commission. I am not surprised that they were ignored. My opinion is that Mr Thompson, as a Commissioner exercising judicial powers, acted improperly in filling this gap in the Beach Hotel's case and then making a finding upon that evidence he extracted.

Wednesday, 20 October 2010

What Pre-Commitment Might Look Like

Set out below are my suggestions as to how an effective pre-commitment system might be configured. There is little original thought in this as it borrows almost totally from the recommendations of the final report of the Productivity Commission. As always, comments are welcome.

Every pokie (casino, club and pub) has a pre-set limit that permits recreational gambling. The suggested default limit is 25¢ maximum bet. This will result in an average loss per hour per machine of around $30; within the limits of recreational gambling. This allows for recreational gamblers whether they be from Australia or overseas to gamble safely without the need for any device.

Should the $30 standard be too low, gamblers could obtain a pre-commitment device that allows them to opt out. To prevent a person from having or using multiple keys, they have to ID themselves at time of issue and consideration must be given to photo, biometric, or PIN identification. Adoption of the Norwegian system of direct electronic debit or credit is another solution.

The pokie would be activated to allow this higher risk gambling by this device (analogous to a key) that is either 'on' or 'off'.

While there will be a default setting on the device, the gambler sets their own limits. The setting of limits can be done via the Internet or a terminal other than the pokie itself. Government mandates no limit. However, in line with the Productivity Commission's own findings; the goal is that it should not be possible to lose more than $120 per hour on pokie gambling.

No need for government monitoring of actual gambling. Allows all entertainment features of pokie gambling to remain.

If the gambler is gambling within those limits, the machine is on. Once those self set limits are exceeded the key is internally disabled and no longer unlocks any machine i.e. the key sets itself to “off’

So if the gambler sets a limit e.g. “I can lose $5,000 in a week” and loses $5,001 in a day then gambling stops until the week expires. Nothing can be done to reactivate the key until the week expires. No one knows what limits the individual sets.

Monday, 18 October 2010

Victoria Abandons Pre-Commitment

The proposals set out in the Victorian government's consultation paper on pre-commitment demonstrate that the government intends do as little as possible to implement the considered recommendations of the Productivity Commission. These well researched recommendations were made after 11 years of study.

Click here to download the Victorian government's consultation paper that puts forward a fundamentally incorrect understanding of what is the true meaning of "pre-commitment". The Paper also sets out it's preferred recommendation that pre-commitment consists no more than a pop-up screen that disappears after 15 seconds or sooner.

Set out below is my submission:
“Policies addressing business practices that generate harm – such as pollution and hazardous products – do not give much weight to the resulting revenue impacts of raised standards … The revenue impacts associated with effective policies addressing problem gambling and other harms are analogous to this.”

Productivity Commission Final Report 2010 Page 11.28

"Victoria has the worst rate of problem gambling prevalence of any Australian state and thereby the worst harm minimization practices of any Australian state.

Based upon its own September 2009 epidemiological study 12,000 Victorian pokie gamblers contemplate taking their own life and about 6,000 Victorians were led to do something against the law as a result of their pokie gambling.

A further Victorian government study found a strong relationship between crime and pokie gambling:

“Gaming expenditure per capita is significantly positively associated with nearly every type of crime in all years of the analysis.”

The Productivity Commission (“PC”) found that “the harms from problem gambling include suicide, depression, relationship breakdown, lowered work productivity, job loss, bankruptcy and crime.” “For each problem gambler, several others are affected - including family members, friends, employers and colleagues.”

Given just these facts, the Department of Justice’s Pre-commitment Consultation Paper (“Paper”) is objective proof of a terrifying and continuing contempt of the interests of the people of Victoria with respect to the harm caused by pokie gambling. This considered statement is based upon the findings set out in the government’s own research. The Paper ignores the substance of the recommendations of the Productivity Commission.

The Paper also ignores the findings of the August 2009 study published by the Victorian Department of Justice titled Impact of changes to Electronic Gaming Machine characteristics on play behaviour of Recreational Gamblers.

The Paper gives weight to the biased Responsible Gambling Ministerial Advisory Council. No weight should be given to the views of this Council given that it’s makeup comprises mainly of people whose interests lie with preservation of the income derived from gambling losses. It is expected that this Council would suggest a course of action that would do little to impair the flow of gambling income. The Paper confirms that expected result.

The Paper’s definition of “Pre-Commitment” set out in the first line of the document is not only misleading but also wrong. Commonsense meaning of the word “commitment” connotes a pledge to a course of action. It is wrong to define the word commitment as the mere ability to set a limit. This is not semantics; rather, this distortion sets the direction of the Paper. Commitment means a commitment; not something else. “Self imposed limits are not commitments.” (PC Final Report 10.5) “The very concept of pre-commitment is that it is a contract that parties cannot breach without significant consequences.” (PC Final Report 10.23

The correct definition is found on page 10.2 of Productivity Commission’s final report:
“… regulatory options that would give people the opportunity to constrain their behaviour when in gambling venues (pre-commitment), with limited potential for reversal”

The Paper’s policy direction away from the true definition of Pre-Commitment must be corrected otherwise measures introduced will not minimise the harm of pokie gambling.

The absence of any specification or even the briefest mention in the Paper of an identifying device is in direct conflict with the first and essential key recommendation of the Productivity Commission for even partial pre-commitment. This failure is fatal.

Rather than the ineffective policy options described in the Paper; the findings of the Productivity Commission in Recommendation 10.4 and Chapter 10 of their final report should be expressly adopted including the specification of an identifying device. This approach is consistent with publicly stated agreement between the Prime Minister and the Member for Denison.

In particular, the Victorian full pre-commitment system must incorporate these essentials;
  • A compulsory device for all pokie gambling including pubs, clubs and the Crown casino
  • Non-transferable i.e. include measures to avoid identity fraud
  • Set a default limit that the gambler must opt out of
  • Require that gambling stops within a set period once limits are exceeded i.e. a commitment."

As a result of further debate, I have partially modified my suggestions to an arrangement taking better account of the concerns of the pokie industry. I will set these out in my next blog.

Friday, 15 October 2010

Nick Xenophon's Landmark Speech

On 13 October 2010, Nick Xenophon spoke as a "Distinguished Speaker" to the Gaming Executive Summit meeting at the Etihad Stadium. Here's what he said....

When I first entered Federal politics, way back in 2007, I addressed a conference similar to this one, basically as a way of introducing myself.

A lot of people then saw me as some scruffy-looking upstart from South Australia, obsessed with the damage being done by your industry.

And they were right.

Today I continue to campaign against poker machines and the harm caused by gambling addiction.

A lot has happened in the last three years.

Back in 2007, it was a struggle to get Federal politicians motivated to act on this issue.

Kevin Rudd….remember him?

Well, he made all the right noises before the 2007 election saying, quote, he "hated poker machines and knew something of the damage they caused to families".

Frustratingly though, Kevin didn't actually get around to intervening and to better regulating your industry.

I think he was going to do it in ‘due season’.

But one of the things he did achieve was to ask the Productivity Commission to conduct an inquiry into gambling, a decade following the PC’s landmark 1999 report.

The latest report was handed down on June 23rd this year.

For some reason it didn’t get much air play that day.

It may have had something to do with events that unfolded in Canberra that night, that led to our first female PM.

Notwithstanding that temporary distraction, the Productivity Commission’s findings and recommendations are troubling for the poker machine industry. And judging by some of the responses to the report by many of you and your peers, I'd say many of you were indeed troubled.

As you should be.

Reform of the gambling sector is inevitable.

As you would know, the Productivity Commission found that around 40 percent of losses on poker machines – and 40 percent of your profits on poker machines – come from problem gamblers.

In fact, the Productivity Commission said it could be higher than that, perhaps as much as 60 percent; but let's stick with the conservative figure for now.

Of course, I suspect you all privately knew this even before the Commission’s report.

Although, Clubs NSW did try to argue in its submission to the Productivity Commission’s inquiry that "only" 23.1 percent of gamblers can be considered 'problem gamblers'.

Well, you know what, that's still 23.1 percentage points too many.

And at 23.1 percent, that means problem gamblers lose $800 million on Clubs New South Wales pokies alone, which flows straight through to the clubs of New South Wales’ bottom line.

That flow, that river of gold to pokies venues, results in a river of tears for so many.

Now, whether we're talking 23 percent, 40 percent or 60 percent, that's still many tens of thousands of people who shouldn't even be on the machines to begin with.

Given Clubs New South Wales admits that problem gamblers are playing their machines, the question is how do we better protect players?

Now, in the past my critics have tried, I would argue fairly unsuccessfully, to paint me as a wowser or a moraliser.

I'm neither.

I simply believe that poker machines are an unsafe product that needs to be better regulated, and made safer.

It's that simple.

I'm not trying to stop recreational players gambling on the machines.

I am simply trying to protect the hundreds of thousands of problem gamblers and those at risk of becoming problem gamblers from harming themselves with your dangerous product.

And we all know that it's not just the individual playing your machines that's affected.

It's their families too.

It's their partners.

Sometimes it is their bosses they steal from to fund their addiction.
The Victorian government’s own research found that 6,000 Victorian pokies gamblers admitted that their gambling led them to do something against the law.

Some of you have even tried to make your venues 'family friendly' in an effort to make your addictive product appear okay.

But in doing so, you have simply normalised an adult activity in the minds of many children.

I am glad to see both Coles and Woolworths have now agreed to the National Principles adopted by the State and Territory Gaming Ministers which says unequivocally that children should not be exposed to the sights and sounds of gambling.

And I am assured by the heads of both chains that their venues are being refurbished to protect children from exposure to gambling.

Kids learn what they live and children should not be privy to what is an adult-only past time.

But we must not pretend to ourselves that it is only children who are vulnerable.

Before politics, I worked as a lawyer.

It sickened me to see people losing their personal injury payouts to the pokies that seemed to take over virtually every pub in my state from the mid 1990s.

The final straw was when a client of mine, who was intellectually impaired, came to me in tears, hurt and confused because his so-called "friends" who ran the local pub didn't want to be his friends any more.

For months they plied him with free drinks, even to the point where he was so intoxicated, they would push the machine’s buttons for him.

Their ‘friendship’ also included giving credit so he could keep chasing his losses.

They'd even picked him up from his small unit to take him to their venue...all so he could gamble away everything he had. Almost 30 thousand dollars later, his money was gone and so were his "friends".

I know that one dodgy pub does not make an unsafe industry, but an unsafe product does.

Since the cliffhanger Federal election, gambling reform has finally made it onto the national political agenda, thanks in large part to Tasmanian Independent MP, Andrew Wilkie, who negotiated a deal with the Prime Minister which will bring about the Productivity Commission’s mandatory scheme of national pre-commitment by 2014.

The reaction from the industry, specifically from Clubs Australia, was hysterical and deliberately designed to scare.

"They're going to fingerprint every Australian and treat us all like criminals," it’s Executive Director, Anthony Ball, claimed to the press.

It was nonsense of course, because no style of pre-commitment has been chosen by the Government yet – in fact, the Committee is due to hold its first meeting only next week, and there are plenty of models to choose from.

One – ONE – submission to the Productivity Commission talked about a bio-metric USB stick that only runs when a player runs his or her finger on it.

The fingerprint is retained only on the USB to activate it, and, to be effective, does not added to any sort of database, let alone a central database.

Yet, Clubs Australia came up with "They're going to treat us all like criminals".

Pathetic, but I wasn't surprised by the tactics.

After all, that's what these guys do.

They would rather run scare campaigns than debate the facts, because they know the facts are damning.

Ironically, the day before Clubs Australia launched its fictional finger-printing fear campaign, Andrew Wilkie and I had written to every Federal Member and Senator warning of such a campaign and advising them of the sort of spin that would be coming their way.

The first bit of spin the industry likes to fall back on is the claim that 'only' 0.5 percent of Australians are problem gamblers.

To use the Productivity Commission’s own words, claims like that are "misleading".

Clubs Australia has also claimed that a system of mandatory pre-commitment for all poker machines would be "completely untested".

Again, this is not true.

There have been results on full pre-commitment and sensible bet limits in Norway, as well as studies of optional pre-commitment in Nova Scotia.

There are also optional pre-commitment schemes being tested here in Australia, in Queensland and South Australia.

Clubs Australia would be aware of these studies – I'm sure many of you would be aware of these studies also.

So why tout these inaccuracies?

Why try to scare the public with lies, when we all here know that problem gambling is a real issue that needs to be addressed and pre-commitment will significantly reduce the harm caused by poker machines?

Could it be the $800 million? Or taking the Productivity Commission’s conservative 40 percent figure, could it be the $5 billion lost nationally by problem gamblers each year?

Clubs Australia has also argued that a full pre-commitment scheme would be an unfair burden on recreational gamblers.

They offer no evidence to support this claim.

However, there is significant evidence to prove that this claim is simply wrong.

For example, a Victorian Government study titled ‘Impact of Gambling Machine Characteristics on Play Behaviour of Recreational Gamblers, released in September 2009 concluded:

“From a recreational gambler perspective, it is quite apparent that the new policy decision of compulsory limits during play is not likely to adversely impact the gaming experience of recreational gamblers, as most indicate that this would only very marginally affect their play. Similarly, the same applies to the concept of having a compulsory set limit past a certain expenditure point – this was not seen as a major issue for recreational gamblers and hardly affected player enjoyment."

Clubs New South Wales has also piped up, claiming that if their machines were made safer they would have to reduce their community contributions.

Much is made by clubs about these contributions, but the Productivity Commission has questioned the value of these claimed contributions, saying that many of the benefits go back to the club venues, not the community at large; and that the gross value of social contributions by clubs is likely to be significantly less than the support Governments provide to clubs through tax and other concessions.

In other words, according to the Productivity Commission, the clubs industry takes much more tax breaks than it gives back in community benefits.

Clubs Australia has also tried to argue that any move to make machines safer would cost jobs.

Again, the Productivity Commission rejects this.

It says that while "many people are employed in the gambling industry, most are highly employable and would be in demand in other parts of the service sector were the gambling industry to contract. In that sense, the gambling industries do not create net employment benefits because they divert employment from one part of the economy to the other."

A report commissioned by the Tasmanian Department of Treasury and prepared by the South Australian Centre for Economic Studies found that:

"Gambling facilities employed an average of 3.2 persons per $1 million in gambling income, 8.3 persons per $1 million income from sales of liquor and other beverages and 20 persons per $1 million income from meal and food sales."

So if you really want to create jobs in the community you should be arguing for less pokies venues, not more.

Poker machines are a net job killer, not a job creator.

Anthony Ball from Clubs Australia is on the record as saying he supports "people’s right to set their own limits on what they can afford to spend gambling".

Well, a comprehensive pre-commitment system, as proposed by the Government and the Productivity Commission after 11 years of study of the impacts of gambling, will achieve this.

And what we do have finally is a Federal government that has agreed to intervene if the States, who unfortunately are hopelessly compromised by the taxes they receive from gambling revenue, do not act.

The fact is, and you well know it, the community today sees the harm caused by poker machines and the Federal Government is moving to better regulate the industry.

The Productivity Commission made a number of key recommendations and all of these will be part of the Federal Government's Committee Inquiry, including the introduction of maximum $1 bet per spin.

Tasmanian Greens' MP, Kim Booth, recently introduced a Bill into the Tasmanian Parliament to achieve this, and I have introduced a similar Bill in the Senate, which is also calling for the volatility of machines to be slowed.

Many of you might have read that hearings into the Tasmanian Bill got rather heated when Kim Booth defended his knowledge of the issue, after being questioned by a somewhat belligerent spokesperson from the local branch of the Australian Hotels Association.

Mr Booth rejected claims he didn’t understand the impact of the machines.

He said he'd seen plenty … like the time he walked into a venue to see an elderly blind woman playing a machine with her husband guiding her hand.

He called on pokies bosses to go with him and speak to the husband whose wife suicided as a result of taking the payroll and taking it down to the casino.

He then offered to take them down to the cemetery and show them some of the corpses of some of these victims if they'd like.

Your industry should have seen this backlash coming. You should have known people would eventually fight back after the enormous damage these machines have done.

So much has been lost by so many because of these machines…houses, savings, businesses, lives.

Your product is an unsafe product.

And I am tired of seeing your unsafe product causing so much harm.

When other products have been found to cause significant harm to a significant number of users they have been banned.

Poker machines make half their profits from people who are addicted.

People with an addiction do not exercise free choice.

Free choice is when you can rationally weigh up the costs and the benefits of your actions, and then you choose.

The people who make your industry so wealthy can't do this because they are hopelessly addicted.

It's not 'entertainment' or 'gaming'.

The current state of your industry can only be described as an obscenity.

And it has got to stop.

Also, the potential for harm through online gambling is frightening.

Tim Costello summed it all up a decade ago when he said that, quote, “with internet gambling, you’ll be able to lose your home without ever actually having to leave it”.

So, parallel to the Joint Committee into Gambling and the implementation of pre-commitment technology, as agreed to between the Prime Minister and Andrew Wilkie, I have initiated a separate Senate Inquiry into interactive and online gambling, including sports betting, the potential for corruption and match-fixing, and the need to better protect consumers.

When I came to Canberra, I suspect many in this industry expected business as usual.

No-one expected one of the major parties to act.

But politics is unpredictable, and for those who thought common sense wouldn’t win the day eventually, well, you would have been delusional.

My message to your industry is simple; accept reform now.

This conference today, I see, has a prime focus on maximising growth of this industry.

But growth of this industry is unsustainable and untenable if you continue to be part of a business that knowingly exploits and destroys so many lives.

You have a clear choice here. You can either embrace reform and be constructive participants to tackle problem gambling, or you can fight change, knowing you are only delaying the inevitable.

At least you have a choice, which is a lot more that can be said for those whose lives have been destroyed by your dangerous products.