Tuesday, 28 December 2010

The Truth About Pre-Commitment Reform Advertisement

Here is a copy of the advertisement the subject of newspaper articles in the Sydney Morning Herald and The Australian.So that readers can experience the advocacy underway by the NSW pokie clubs, click on the image and have a read of what the Mt Pritchard pokies club (Mounties) is sending to their members.Please bear with me and wade through some more "Truths" that balance the discourse.

Full Pre-commitment is is not an Andrew Wilkie creation nor an "outrageous policy" of Nick Xenophon. It is the key solution recommended after 11 years of study by the Productivity Commission as the best means to target problem pokie gamblers. All interested in the pokie gambling were welcome to put submissions. Representatives of ClubsNSW were fully consulted and heard both publicly and privately.

Adult prevalence rates be misleading according to the Productivity Commission. My view is that the statement made by the CEO of Sydney Juniors "It's a shame that the 99.6% of the community that gamble responsibly have to be over regulated for the .4% that don't" is misleading. I've reproduced their finding on this point below:
"Adult prevalence rates can be misleading
It is commonplace to represent prevalence estimates as shares of the adult population, but these figures can be highly misleading.
Currently adult prevalence rates are 0.7 percent and 1.7 percent of the adult population for problem and moderate risk gambling respectively. That looks small — and indeed some segments of the industry have suggested that consequently the social policy significance of such problems is also small. However, to put these figures in context, only around 0.15 per cent of the population are admitted to hospital each year for traffic accidents and around 0.2 per cent of the population are estimated to have used heroin in the preceding year. Small population prevalence rates do not mean small problems for society."
The better measure is people gambling regularly on pokies. Again, I'll reproduce the self-explanatory findings of the Productivity Commission:
"While the results vary by surveys, it is estimated that around:
– 600 000 Australian adults (just under 4 per cent) play the pokies weekly or more.
– 15 per cent (95 000) of this group are ‘problem gamblers’. A further 15 per cent of pokie players face ‘moderate risks’."
I have been to many NSW pokie clubs and many more pokie clubs and pubs. I understand what the IPART report said (based upon ClubsNSW own figures) about the value of clubs and the bulk of their "value" comprises of discounts on goods or services e.g. a cheap beer, a cheap parma or a cheap game of snooker for members. For this, Clubs benefit from a lower rate of state pokie taxes, full tax deductions for community donations (and even these may comprise only of services - not cash), land leased for peppercorn rents from local councils, as mutuals no Federal income tax on member derived income (this includes pokie gambling losses) and as sporting bodies, no income tax at all.
They enjoy an advantage on small businesses.
And they are whining for more subsidies. And, as we know, the Coalition has caved to this whining.
All the while, by their own admission, problem gamblers lose $800 million per annum gambling on ClubsNSW pokies.

A pre-commitment device is not mandatory for casual gamblers. Everyone does not have to set a limit. To say that this is the case misrepresents not only the Productivity Commission report but also Federal government policy. Here's what Jenny Macklin actually said:
"We also want to minimise the impact on occasional players and overseas visitors. The Productivity Commission’s model would allow occasional gamblers to play outside the pre-commitment system, by purchasing a pre-paid card for example."
Club NSW members should know about the points in my ad and I was prepared to put my money where my mouth is.

It seems that The Australian agrees that pokie reform is due. Click here to read today's editorial under the title of "Fostering responsible gambling". Or simply keep reading as I have reproduced the editorial in its entirety below:
JULIA Gillard has good reason to hold her ground as licensed clubs step up their campaign against the government's proposal.

That is, the government's proposal to mandate "pre-commitment" technology on poker machines in 2012 if the states fail to do so. The proliferation of poker machines in pubs in some states suggests that the gambling industry is rather good at getting its own way, especially when governments are too weak or too cash-strapped to resist. We trust the federal government is made of stronger stuff, but it should guard against rushing into half-baked measures that create problems and later have to be reversed.

Ultimately, individuals are responsible for their own spending, but pre-commitment technology fosters individual responsibility. Poker machines would be electronically linked across Australia, and players would be obliged to place a binding limit on how much they are prepared to lose. Such decisions are far better made in a rational manner before the first push of the button.

Offending the clubs and hotel lobbies will be deeply unpopular in sections of the Labor Party, which has long benefited from generous political donations from the industry. The states, which are more addicted to poker machines than the most hardened gambler, would also oppose any move that forced them to cut spending to offset the revenue losses that would flow from a reduction in gaming revenue, which provides virtual rivers of gold. In NSW, for example, gambling accounted for $1.6 billion last year, providing 8.6 per cent of revenue.

Pre-commitment technology would hardly be draconian in light of the Productivity Commission's finding that of the 600,000 Australians who play poker machines weekly, almost one in six players -- about 95,000 people -- are problem gamblers. The commission found that playing a single machine at high intensity, it was easy to lose $1500 in an hour -- a level of loss that hurts many families and individuals, especially in poorer outer-metropolitan suburbs and regional centres with heavy concentrations of pokies. The opposition wants pre-commitment to be voluntary. Unfortunately, it is the very people who most need help who would be likely to resist. Problem gambling and sensible poker machine regulation warrant a mature community debate, which is under way.

Sunday, 12 December 2010

Dazed and Confused Victorian Liberals

It's as if they stumbled into the light after years in a cave, the Victorian Liberals have a confused sense what to do about John Brumby's failed pokie policies that have left Victoria with the worst problem gambling prevalence of any Australian state. Despite a misleading headline, one hopes that the editorial correctly describes the dissension between Premier Ted Balleiu and Gaming Minister Michael O'Brien when it revealed:
"Mr O'Brien's comments opposing the introduction of mandatory pre-commitment appear to place him at odds with Mr Baillieu, who suggested in the state election campaign that mandatory pre-commitment should be introduced ''as soon as practicable''."
The Premier is right and Mr O'Brien wrong. Click here to read the full article.

The first misconception promoted by Mr O'Brien about the Federal Government's policy is that it is something made up between Andrew Wilkie and Julia Gillard. This is wrong. The Federal Government's policy is no more than an adoption of the key full pre-commitment recommendation of the Productivity Commission.

The second misconception is that all pokie gamblers will be required to participate in the pre-commitment system to gamble. Wrong, again. Mr O'Brien clearly did not read the Commission's final report or Jenny Macklin's speech where she said:
"We also want to minimise the impact on occasional players and overseas visitors. The Productivity Commission’s model would allow occasional gamblers to play outside the pre-commitment system, by purchasing a pre-paid card for example."
Put another way, the Commission has carefully designated the moment when dangerous gambling might begin. It is at that point when the gambler must make a pre-commitment decision.

Remember this is the very same Commission, Mr O'Brien's party wants to review the $34 billion NBN plan. How can they be so right for NBN, but, apparently so wrong on pokie gambling?

The answer is that they are right for both.

Mr O'Brien must do the right thing and applaud the Commission's recommendation about recreational gamblers and undertake effective Victorian implementation.

Saturday, 4 December 2010

Jenny Macklin's Jupiter Casino Speech

As much has been written about the Minister for Families, Housing, Community Services and Indigenous Affairs speech, everyone should read the issued text and make up their own minds as to its meaning and impact reconfirming the government's resolve to implement mandatory full pre-committment. It was delivered on 1 December 2010 at the 20th Annual Conference of the National Association for Gambling Studies. There is a terrific shift in language. See if you spot the omitted expression.
"I would like to acknowledge the traditional owners of the land on which we are meeting, the Kombumerri people, and pay my respects to their Elders both past and present. In particular, I pay my respects to Mr Graham Dillon, an Elder from the Kombumerri people who I understand is here today.

It’s great to be here today.

I’m told the NAGS conference really is the who’s who of gambling. Including industry, government officials, regulators and of course, academics and researchers in this field.

As I’m sure everyone in this room is aware, the Australian Government has embarked on some major reforms to tackle problem gambling. Our reforms are primarily targeted at improving the safety of poker machines for players.

Some of you may think this is a new area for the Australian Government to be moving in. And it’s absolutely correct that the regulation of gambling and poker machines has predominately been a state responsibility. But we have been working on this issue for some time.

In 2008, in our first term, the Australian Government, together with the states and territories, asked the Productivity Commission to conduct an independent inquiry into gambling, with a specific focus on problem gambling and harm-reduction measures. This inquiry was a follow-up to the Productivity Commission’s comprehensive investigation into gambling in Australia in 1999. This was a major piece of work.

The report - released in June this year - found that gambling is an important industry that is valued by many Australians. The gambling industry plays a significant role in our economy, including by supporting the hospitality and tourism industries. More than 145,000 people are employed in the industry, many in our regional cities and towns. Most Australians like to gamble, whether it’s the occasional flutter at the races, buying a lottery ticket, playing the pokies or a night out at the casino. Clubs and pubs are popular, friendly venues where Australians like to get together. For many people, gambling is an enjoyable thing to do while socialising with friends and family. And when they gamble Australians spend a lot of money – between 2008 and 2009 Australians spent $19 billion on gambling, almost $12 billion of it playing poker machines.

For most, gambling is an enjoyable form of recreation. Yet for a significant minority it is a highly destructive problem. There are between 80,000 and 160,000 Australians with a serious gambling problem.

Many of these people are gambling away their entire income – destroying their own lives and their family’s lives. They suffer mental and physical health problems, find it difficult to hold down jobs, are often in debt to support their gambling and can barely maintain relationships. And what is more distressing is that problem gambling disproportionately affects people who are already financially vulnerable. Australian studies have found that the highest rates of problem gambling are among 18-24 year olds.

And a high proportion of adult problem gamblers report they developed gambling problems during their teenage years.

We also know that gambling is becoming more attractive to women. Before the introduction of poker machines, women accounted for one in ten problem gamblers. Now it’s one in three.

At its worst problem gambling destroys lives.

In a horrific case, a young Northern Territory teenager died from an abscess on her leg because her foster carer – her great-aunt who had a severe gambling problem - neglected her. In the month of her niece’s death, the carer withdrew more than $13,000 from the ATM at the Darwin Casino, and was a frequent visitor. On the night before her niece died she stayed at the casino until 12.30 am. Her lack of care for her niece on that day and before her death was inexcusable but was in some part due to her gambling problem. It wasn’t until after the girl’s death that police found that the woman had lost $1.6 million over four and half years playing the pokies.

Problem gambling can be life absorbing. It takes up people’s time, uses their money and distracts them from responsibilities such as caring for their children or work.

There is persuasive evidence that poker machines need to be made safer.

Forty per cent of all money spent on Australian poker machines is spent by problem gamblers, even though they only make up 15 per cent of players. Problem gamblers spend an average of $21,000 a year on gambling. That’s a lot of money by anyone’s standards – money that isn’t being spent on food, the mortgage or paying off bills. This is not acceptable. We want gambling to be safe and enjoyable for everyone who wants to play.

The Productivity Commission’s advice is that the best way to make gambling safer is to focus on people playing regularly on riskier forms of gambling. That means focusing on people who regularly bet on poker machines, because it is people in this group who are at the highest risk of developing a gambling problem. Three-quarters of people classified as severe problem gamblers play poker machines. And other regular poker machine players, not necessarily categorised as problem gamblers, may be at risk.

A New South Wales study found that people who play the pokies regularly – at least once a week - are estimated to lose on average between $7000 and $8000 a year on poker machines. These people face the highest risk of developing a gambling problem. Effective measures to reduce the harm for problem gamblers can also make poker machines a safer product for all players.

The accessibility of poker machines in Australia rapidly increased in the 1990s. But, the Productivity Commission found that our protections for players remain inadequate. Poker machines are easy to use and even easier to find – we have nearly 200,000 poker machines in pubs, clubs and casinos across the country. We know that people often start playing poker machines because they are located in safe, friendly places like clubs and pubs where people like to get together to socialise. These also happen to be places that are open for long hours.

The machines are also a lot more sophisticated than they used to be. It is now possible to play them with extraordinary intensity, so people can bet faster and more frequently. At high intensity it’s easy to lose $1500 or more in an hour.

In June when the Government released our initial response to the Productivity Commission report, I indicated that our first priority would be to progress a nationally consistent pre-commitment model for poker machines. This is based on the Productivity Commission’s recommendations that pre-commitment is a strong, feasible and effective approach to reduce the harm from problem gambling. I also announced then that we would approach the states and territories to establish a new high-level Council of Australian Governments (COAG) Select Council of Ministers on Gambling Reform.

Our support for poker machine reform including pre-commitment has not changed. Neither has our determination to work with industry, the states and territories, researchers and the community, to get it right.

Central to our reforms is our support for a full pre-commitment scheme on all machines that is uniform across all states and territories. As agreed between the Prime Minister and the Independent Member for Denison, Andrew Wilkie, we will be working with the states and territories to begin bringing in pre-commitment arrangements in 2012, with the full scheme commencing in 2014.

We also support the Productivity Commission recommendations on dynamic warning and cost of play displays on poker machines. And we have committed to implementing a $250 daily withdrawal limit for ATMs in venues with poker machines, except casinos.

Each of these three commitments is evidence based, and recommended by the Productivity Commission.

The Government is well aware that a full pre-commitment scheme across all states and territories is a challenging reform, and I want to focus on this reform today. The Government supports pre-commitment because we agree with the Productivity Commission that this is the most targeted and effective measure to help problem gamblers and those at risk, without adversely impacting on recreational gamblers.

The idea behind pre-commitment is that we can use technology to give people a tool, at the beginning of a gambling session, to think about how much they want to spend, set limits and stick to them. This is not about taking away people’s responsibility for their own behaviour, or the Government controlling people’s money. In fact, it’s the exact opposite. It’s about providing a tool to help people make informed decisions to better manage their own money and exercise personal responsibility.

The Productivity Commission recognised that a well designed system is critical to its effectiveness. A well-designed pre-commitment scheme should give problem gamblers and those at risk greater control, while letting other players continue to enjoy playing the pokies. The design of the scheme is also critical to ensuring that clubs, pubs and casinos continue to make a significant contribution to community life, and Australia’s economy.

The Commonwealth supports a full pre-commitment system based on the recommendations of the Productivity Commission. Under the model recommended by the Productivity Commission, players can set the limit as high or low as they like. Players could of course change their limits periodically, but would not be able to revoke or increase them within their agreed set period. And players could choose no limit at all if they prefer.

We also want to minimise the impact on occasional players and overseas visitors. The Productivity Commission’s model would allow occasional gamblers to play outside the pre-commitment system, by purchasing a pre-paid card for example.

We support a full pre-commitment scheme because all the evidence shows that voluntary schemes aren’t as effective.

Much has been made in the media of pre-commitment technology and how it would work. Pre-commitment requires some form of technology to identify the player and their chosen limits and preferences. This can take a number of forms, however, most of the Australian trials so far have used a card system. This would require players to register, just like they do now for loyalty programs in gaming venues.

Some have suggested this would spoil the fun of everyone who wants to play the machines whether they have a gambling problem or not. I’m not convinced of this.

Requirements for identification are widespread in gambling industries already. Many venues, such as clubs, already require players to be members or sign in at the venue before they can play poker machines. I’ve recently visited a large regional club and a casino that both are already using card readers on their poker machines as part of their loyalty programs. People have cards for all sorts of things, including for their club membership or to borrow a book from the library, or rent a DVD from the video store. Pre-commitment would be no different.

The Government will be working with industry and gaming machine manufacturers to identify options that are practical, cost-effective and easy for players to use. I’m going to visit one of the pre-commitment trials in Queensland tomorrow.

We will also ensure that the pre-commitment system has very strong privacy arrangements for the data that is collected. The Australian Government has strict privacy legislation to protect people. These are issues that have been successfully resolved in a wide range of areas and we will be applying the highest standards to our gambling reforms.

Of course, how a uniform pre-commitment scheme would work depends a lot on the states and territories. While the impacts of problem gambling ripple across the whole nation, the regulation of gaming machines in Australia is a state and territory responsibility.

The Commonwealth is committed to working with the states and territories to deliver these reforms. I co-chair the COAG Select Council on Gambling Reform with my colleague the Assistant Treasurer, Bill Shorten. The state and territory ministers on the council represent portfolios with responsibility for gambling regulation, treasuries, and community and human services, and we had our first meeting in Melbourne in October.

There are very different arrangements at the moment across all the jurisdictions in almost every area where we wish to act. Some states, such as Victoria, Queensland and South Australia, have already made significant progress on pre-commitment, and others have removed ATMs from gambling venues entirely.

I do not underestimate the task of achieving a consistent response across Australia. And as I’m sure you are aware, the Australian Government has committed to bring in our own legislation if there is no agreement with the states and territories by the end of May next year. The Productivity Commission recommended that the Commonwealth intervene if states did not agree to implement these changes Australia-wide.

There are also important issues to be considered by all governments related to online gambling; and states and territories are also keen to work together in developing responses to issues relating to online wagering and racing.

These issues are now on the COAG Select Council agenda and the Minister for Communications, Senator Conroy, who has responsibility for this area, has been invited to our next meeting. We are also making sure that we get the advice we need from those on the ground – from both the industry and community sector, as well as from academics and researchers specialising in this field.

We want our reforms to be practical, feasible and balanced. We want our reforms to work, and we want to anticipate and address any unintended consequences before we move to implementation.

That’s why the Assistant Treasurer and I have established a Ministerial Expert Advisory Group, chaired by Professor Peter Shergold. We have asked the Advisory Group to provide us with specialist and technical advice on implementing the reforms, and to keep us informed about the views of all interested parties. It will surprise no one that there is a range of strongly held, and in many cases conflicting views, among those on the advisory group. The Government genuinely welcomes a mature, and evidence-based debate on how to best implement these important reforms. The group met for the first time in early November, and will be meeting again in a week or two to look particularly at the issues associated with implementing a full pre-commitment scheme. I understand you will be hearing from a number of the advisory group members at this conference, and I’d like to thank those of you who are in the audience for your contributions.

The Government recognises that gambling is not only an important industry but a celebrated part of Australian culture. We have the horse race that stops the nation, and on one of our most sacred days, Anzac Day, many Australians like to play two-up. Millions of Australians enjoy a flutter each and every year, but for some Australians excessive gambling can leave a trail of destruction. We have a responsibility to implement effective reforms to tackle problem gambling.

We want people to be able to safely enjoy gambling and in particular, playing the pokies. We also want a vibrant industry that continues to provide entertainment and employment for many Australians, and makes a significant contribution to our economy.

Our reforms will make poker machines a safer product for all players.

Steering a path to a good policy outcome will be challenging. But we are committed to working with you all - state and territory governments, industry and community advocates, to introduce these reforms."
The missing expression is "EGM" signifying "Electronic Gaming Machines". The Minister refers to them as "poker machines". Pokie gambling is not a game. It's dangerous gambling. There are people's lives at stake. Reform now seems inevitable.

For the benefit of his members, ClubsNSW CEO Anthony Ball should be leading his members down a pathway that eases them into this new world where the inherent harm of the machines is addressed. Failure to do so will result in a crashed transition and possible losses for his members should their machines and systems not be compliant within the agreed timetables.

Mr Ball, that would be irresponsible. You would be failing your members.

Friday, 3 December 2010

Losses Disguised As Wins

A factor that likely contributes to continued and potentially harmful gambling is a characteristic known as Losses Disguised as Wins. Professor Kevin Harrigan of the University of Waterloo, Ontario, Canada has produced an instructive video about Losses Disguised as Wins. You can have a look at it here:

To learn more, click here to go to the University of Waterloo's problem gambling research centre.

When you are next in a pokie pub or club, you'll be as horrified as I when you have a look at how many times the false reinforcement of LDWs occur.