Saturday, 26 March 2011

Len's Ainsworth Soaring Eagle

Len Ainsworth was the founder of Australian billion dollar company Aristocrat Leisure. Aristocrat is our largest pokie manufacturer. As such, he is the man most responsible for the harm caused by these dangerous machines. Len left Aristrocrat and founded Ainsworth Game Technology. I dropped by their stand at a recent UK trade show and picked up some of their material. Ainsworth spruicks a feature on their new Soaring Eagle Super Game that make me worry.

There has been an ongoing debate about whether pokies are programmed to display a near miss. A 'near miss' is where the symbols nearly line up to reward the gambler. To understand the Victorian situation, here's what the Victorian Gambling Commission published in Spring 2010 about an article that appeared in the Herald Sun;
"The newspaper also claimed that gamblers experience a ‘near miss’ effect when playing gaming machines. This occurs when players believe they have almost won a prize and are encouraged to keep playing. For instance, a reel may show four of the five symbols required to win the major jackpot.
Contrived ‘near misses’ are banned in Australia. Games must display symbols that are the result of a random number generator.
A gaming machine showing a contrived ‘near miss’ will not be approved in Victoria."
P 3.9.57a of the Australian/New Zealand Gaming Machine National Standard Version 10.0 and 10.1 states:
"3.9.57a The display of the result of a game outcome must not be misleading or deceptive to the player (e.g. must not improperly indicate a near-miss)."
One of the ways that a near miss can be contrived is when the symbols leading to a win are stacked on certain of the computerised reels but held back on other reels. The gambler experiences winning symbols on say, reels 2, 3, and 4 but because those sysmbols are held back on, say reel 5, the win never comes. By weighting the reels, the near miss effect will be experienced notwithstanding that reels spin by virtue of a random number generator.

Tim Falkiner has been an evangelist about the circumstance of weighted reels.

Click on the image below and have a look at the third bulleted feature of the Soaring Eagle game.

Here's the spruick:
"Long arrays of stacked wilds across reels 2, 3 and 4 held on reel 5 for exciting play"
I could be wrong but this sounds a lot like Ainsworth deliberately weights reels on the Soaring Eagle in a way that contrives near misses.

And a near miss is certainly "exciting" for the pokie gambler. Professor Kevin Harrigan of Waterloo University has written about how a near miss encourages a gambler to continue gambling:
"The above research shows that near misses are an indirect risk factor that may explain how “cognitions are influenced and distorted” (Griffiths 1995, p. 196), lead to “significantly longer playing times” (Strickland and Grote 1967), “may motivate people to gambling” (Cote et al. 2003, p. 433), “causes a gambler to over-estimate their chances of winning” (Clarke as cited in Lane 2006), and “appears to perpetuate play, and is therefore a structural characteristic that has the potential to greatly influence the ‘addictiveness’ of the machine” (Parke and Griffiths 2004, p. 409)."
You can read more about near misses by following these links:

It is quite possible that I have mis-read the Ainsworth spruick. It could be that Len intends that the Soaring Eagle game never soars in Australia. I hope so.

Thursday, 24 March 2011

Peter Newell Can Sleep Tonight

During yesterday's address Peter Newell mentioned what happened in Norway as a cause for concern. He was worried about online gambling sucking up the gambling dollars that problem gamblers would spend after turning away from pokies once full pre-commitment was in place. He need not worry. The evidence direct from the Norweigan Gaming Authority is good news for Mr Newell. Slot machine gamblers in Norway did not move to other forms of gambling. Mr Newell can sleep well tonight.

I'm guessing Mr Newell did not know about this information. Of course, if he did, and proceeded to state publicly that Norweigian pokie gamblers moved to other forms of gambling then that would not be telling the truth.

Here's an expert commenting on this very same information. He's got it nearly right.
"the majority of former slot machine players did not move to new forms of gambling and the turnover and participation in new gaming terminals is lower than it was for slot machines. In addition, fewer individuals are seeking help from telephone help-lines and treatment services"
This expert was named and touted by Peter Newell (and members of ClubsNSW) as being authoritative on pre-commitment. This paragraph was taken from his expert submission to the Joint Select Committee on Gambling Reform. Mr Newell referred to this committee's proceeding during his talk yesterday.

Is it reasonable to presume that Mr Newell read the whole of this expert's report? It's only 10 pages. It's available publicly. One might hope that Mr Newell owes it to the members of Clubs Australia before he talks about it before the National Press Club in a nationally televised event.

The quote is from pokie expert Professor Alex Blaszczynski of the University of Sydney.

Backing up the research discussed in my Tale of the Ol' West blog, here's a further breakdown from the Norweigan Gaming Authority:

My assumption is that the pokie industry regards the addicted gambler as an incurable sicko who will fall from alcohol, drugs or other forms of gambling. The best place for these people is the warm embrace of their clubs and pubs. The multi billion dollar pokie industry takes insufficient responsibility for the inherent dangerous nature of the machine itself nor the environment they create in their pokie dens.

It would, indeed, seem that Mr Newell was somewhat casual with the facts during his talk yesterday.

My hope is that the damage of pokie gambling causes Mr Newell not to sleep very well until he leads all clubs into embracing not only the Productivity Commission's recommendation of full precommitment but their full suite of measures including $1 bet limit and reducing the cash acceptor maximum.

Tuesday, 22 March 2011

The Real Pokie Crusade

Tomorrow, Peter Newell, Clubs Australia chairman and crusader (who threatened sue me twice) is delivering a speech at Canberra's National Press Club called "The Government's Undoing - The Andrew Wilkie Pokie Plan". He will flag the upcoming launch of a "hard hitting" campaign (when is a campaign ever described as anything but "hard hitting"?). It is his declaration of war.

I have little hope that Mr Newell will balance his advocacy with the truths I urged him to divulge to his members in the ad I took in the Illawarra Mercury

If balance is the goal, it seems that I am bound to be disappointed as Mr Newell has characterised the reform as the "Andrew Wilkie Pokie Plan" when it is not. The reform is part of the suite of measures recommended by the Productivity Commission. Mr Wilkie played no part in their formation. The blurb for Mr Newell makes the false assertion that "Australia's 5 million annual poker machines players will needs a license to gamble". Not true. Given that my advertisement pointed out that casual gamblers will be able to bet without a pre-commitment card, Mr Newell seems to have passed from advocacy to wilful misrepresentation.

But the Productivity Commission's reform is not what is truly driving Mr Newell. The crusade is the preservation of the largest NSW pokie clubs.

These brontosauruses have been fatally ill for a long time as their customers move on to forms of entertainment that are relevant to their lives rather than a model that was invented in the 1950's. These clubs are so dependent upon an unrestricted flow of pokie losses from an ever diminishing customer base that they are now begging for government intervention to keep the playing field permanently tilted in their favour despite the damage to Australian society.

The failed pokie club model is compounded by poor management practices that focused upon self-serving over-the-top pokie manors rather than a model free of dependence upon pokie gambling. As the elderly who were once the lifeblood of the mega clubs pass on, their pokie gambling habits have not been replaced by the young. It is a failure of competence at the very top of pokie club management.

Don't take my word, rely instead of the findings of the NSW Independent Pricing and Regulatory Tribunal (IPART) whose report on the pokie clubs is so often cited by the dynamic duo of Messrs Newell and Ball.
"there appear to be a range of deficiencies in clubs’ corporate governance. Stakeholders identified that limitations in the skills of directors (especially limited understanding of financial concepts) and difficulties in attracting and electing directors with appropriate skills present challenges to board effectiveness."
IPART also found that the smaller clubs, more reliant on volunteers, were consequently less reliant on pokie revenue. While cited by the Batman and Robin of Clubs Australia (Messrs Newell and Ball) as the entities that might be most harmed by pokie reform, the fact seems to be that they will be least affected by the consequent drop in pokie losses once the Productivity Commission's considered reforms are implemented.

What the pokie clubs need to do is introduce gambling that is both safer and more entertaining that will grab back people. The products exist. Here's the IGT Batman pokie I saw in operation at a recent gambling trade fair.

And there's a lot more possibilities with statewide or national platforms that will allow implementation and easy adjustment of the whole suite of the Productivity Commission's reforms as detailed in the blog about The Most Important Thing.

True community clubs still exist. Even in metropolitan Sydney. Without pokies. Click here to experience the very cool family environment offered by the Petersham Bowling Club without pokies.

But then you would need competent boards of pokie clubs to recognise future opportunities rather than maintaining the manor. They should be assisted by a crusading leadership (caped or not) that keeps their members fully informed as to all sides of the argument.

And that isn't happening.


Thursday, 17 March 2011

More Bad Gambling Commission Findings

The Victorian Gambling Commission never ceases to amaze in their ability to reject submissions that may impede the march of pokie availability to Victorian suburbs and rural communities. One of the arguments put to the Commission as a part of Jeremy Ham's submission to the Jan Juc hearing was that the presence of pokies in Jan Juc would lead to an increased incidence of crime. This was rejected without reason by the Commission in these words:
"the Commission does not accept that the case for increased crime and threat to the safety of the community of Jan Juc resulting from the introduction of gaming machines was made out."
Here's the case that was not accepted:
There is potential for the Beach Hotel to impact the community negatively by enhancing the likelihood of income producing crime. This can occur in 3 ways:
  • Gamblers committing crime to support problem gambling behaviour
  • Venue staff exploiting the gambling business being conducted at the venue
  • Crime committed against the venue and patrons
Unfortunately and despite the perceived good fortune of the Torquay and Jan Juc communities, it has been reported that a staff member has been charged with stealing $187,000 from the nearby Torquay Golf Club. Crime is not a theoretical possibility but is a real issue for the Jan Juc community.

The findings of the Victorian Department of Justice report into the relationship between income generating crime and gaming expenditure (“Crime Study”) are relevant. Given the finding that there is a positive association between gaming expenditure and crime, the Beach Hotel’s evidence that gaming expenditure will rise founds the likelihood that income producing criminal activity will rise in the Jan Juc community if the Beach Hotel’s application is successful.

The high SEIFA index for the Shire’s residents is not a mitigating factor. The study found (with qualifications) that there was a positive relationship between lesser disadvantaged areas and income generating crime (Section 5.2 on page 73-74) when viewed by reference to gambling expenditure.

The observation in the Crime Study that “ it has been generally found that the higher the income, the more likely it is that households gamble” fits with this conclusion even though those better off households may be under represented in the top gambling expenditure group.

A significant percentage of both moderate risk and problem Victorian gamblers were found to answer positively to whether their gambling had led them to do anything that is technically against the law in the past 12 months. Please refer to pages 217-218 of the epidemiological study undertaken for the Department of Justice titled “Problem Gambling from a Public Health Perspective” (“Epidemiological Study”). The percentages of 3.45% for moderate risk gamblers and 15.17% for problem gamblers were well above the total population percentages disclosed in figure 4 on page 53 of the Crime Study.

While the crime participation rates for moderate gamblers were below that of problem gamblers it should be recognised that there are many more people in this group of moderate risk gamblers. The findings from the Epidemiological Study must be read subject to the qualification that although an overwhelming percentage of respondents in these categories are pokie gamblers; the category includes participation in all forms of gambling.

Howsoever qualified these studies clearly indicate that there will be an increase of the likelihood of income generating crime if pokies are approved at the Beach Hotel. The issue is not whether there will be an increase but how much that increase will be. Taking into account the lack of disadvantage, the likelihood is significant as the incident at the Torquay Golf Club demonstrates and a negative impact.

There have been a number of Melbourne pokie venues that have recently been the subject of violent crime. These venues include the Cross Keys Hotel in Essendon, the serial robberies of Raylene and Anthony Szarvak, the veteran robbed in his driveway after leaving the Werribee Plaza, the pensioner attacked and robbed for her pokie winnings after leaving Geelong’s Norlane Hotel, and most troubling, the Westmeadows Tavern. The Westmeadows Tavern is most troubling because of its environmental similarities to the Beach hotel.

The Westmeadows Tavern is an attractive Woolworths / Mathieson associated venue with a family orientated “Western” theme. The public bar area is in a semi detached building. The pokie area is adjacent to a neighbourhood family bistro. The Westmeadows Tavern operates 42 pokies. Like the Beach Hotel, it is not adjacent to a highway. It’s operators have considerable experience. Yet on 25 June 2010, three masked men armed with a knife and guns demanded cash and ordered three staff and three patrons to lay on the floor. Given the combination of TAB, alcohol service and the pokie and bistro areas in one area at the Beach Hotel, there is likely to be significant cash generated. This is a worse configuration than the Westmeadows Tavern where the income generating sections of the facility are discrete.

The negative impact of the likelihood of crime is exacerbated by the intended conduct of the Applicant. There was no mention nor any evidence lead by the Beach Hotel as to precautions to be taken to minimise the likelihood of income generating crime being imposed upon the Jan Juc community should its application be successful. Not only does this omission impact upon an assessment of net detriment but also the suitability of the Applicant to be granted such a license.

The low-level security nature of the Jan Juc residential neighbourhood and the low-key business may well perceive the need to raise security standards. This will result in a negative cost impact being borne by the community.
A study by the forensic accounting firm Warfield & Associates about Gambling Motivated Fraud was released today. Click here to download the whole report. Here's the key page. Click on the image to read it in full size.

No surprise that pokie gambling is overwhelmingly the primary choice for gambling motivated fraud.

The Commission must consider crime as a negative impact of enhancing access to pokie gambling in Victoria's suburbs and regional communities.

Thursday, 10 March 2011

The Most Important Thing

The most important thing I would say about the implementation strategy is that it itself involves precommitment to precommitment and by that I mean really the technology platform. So the starting point for the implementation plan is to put in place the standards and the technology across the states that would allow precommitment. It is also the same platform that could allow a whole range of other measures to be put in place and, most importantly, to withdraw or amend them at very low cost depending on their effectiveness.

That's not something I wrote although I wish I could have.

It is an extract of the transcript of the Productivity Commission's contribution to the Select Committee's inquiry into pre-commitment. The words are from Dr Ralph Lattimore who was very much involved in the 1999 inquiry as well as the 2010 inquiry. His recommendations deserve the greatest weight together with the views of Gary Banks and Robert Fitzgerald who also conducted both inquires (no disrespect whatsoever to Ms Sylvan who is a veteran of only the 2010 Inquiry!).

Why is it the most important thing? Because the Productivity Commission never recommended pre-commitment as the complete fix-it to Australia's enormous pokie gambling problem. Again, Dr Lattimore words are preferred
"the commission has never suggested that precommitment will be a silver bullet. It is part of a suite of measures. You cannot just rely on a single approach to address problem gambling or, indeed, consumer protection."
Pre-commitment was only one of a series of measures considered that included the $1 bet limit, reducing the amount of cash that could inserted into a pokie at any one time, the volatility of the machine, the spin rate, the maximum ATM withdrawal and others.

Let Dr Lattimore, Ms Sylvan and Mr Fitzgerald do the talking:
I can give an illustration of this. This is why we have put a lot of emphasis on the platform at the commencement. We had a lot of dealings with the ATM manufacturers because we wanted to address rigorously the costs associated with ATM changes. Changing a limit on an ATM machine in a gaming venue is very low cost because it can be done remotely. In Queensland, where they use the QCOM system, again it is extremely cheap to make a change to the gaming machine because the communication between the machine and the monitor—a private monitor in this case—is easy. So they were able to introduce a change in the amount you could put into the machine in any one go overnight. As it happened, we withdrew it shortly afterwards but again remotely. On a platform side, that is what you are looking at. That involves the capability for precommitment and it also gives you the capability for a range of other regulatory measures. That is why the most important part of that implementation strategy is getting agreement on standards and technology.
Ms Sylvan—We are talking about a national uniform set of standards, which industry said to us was very important. One of the concerns at the moment is that the standards are quite variable across the states and territories. Our use of the term ‘adaptive technology’ means you have a base set of standards, but the implementation of that in different jurisdictions could in fact be different. For instance, bet limits could be different and could be changed quite easily. So that is an important feature of the system.

CHAIR—So you could have a state based technical solution to a set of common standards?

Ms Sylvan—A different implementation really.

CHAIR—Okay, but ultimately arriving at a uniform technology?

Mr Fitzgerald—The technology should be standard across Australia. That benefits industry. It is the most cost effective way to do it. Once you introduce this new technology, individual jurisdictions can implement different measures. The problem at the moment is that the current status quo machinery means that all implementation of measures is expensive. This changes forever the way in which the industry, the regulators and government policy can interact. The key thing is that it is very cost effective, but to do it you need national technological standards with a capability to do a range of things."
It would be ultimately
  • cheaper
  • quicker, and
  • more effective
if Australia followed the considered recommendations of the Productivity Commission.

Let's hope that the ALP will stay the course and the Coalition will think about Australia's welfare instead of their apparent cynical priority of calling an early election.

Saturday, 5 March 2011

Victorian Local Councils - The New Pokie Addicts

Darebin now joins Moreland and Manningham in an idiot's parade of local government councils eager to get their share of the pokie gambling losses. Once locked into this new source of revenue, without a clue about what to do with it, they will become as addicted as our own State governments, the AFL and the NRL. Bear in mind that 40% of this new money is earned on the backs of problem gamblers. It's immoral and, frankly, disgusting.

Instead these Victorian councils should be doing their best to address public health concerns focussing on carefully considered measures preventing or, at worst, minimising the harm of pokie gambling itself. No need to re-invent the wheel. That is what the Productivity Commission came up with after 11 years of study and extensive consultation with all involved in pokie gambling.

Councils have three formal means to influence pokie policy in their city or shire;
  1. Participate in the Victorian Gambling Commission process regarding the approval of new or additional pokies
  2. Participate in the approvals required pursuant to the town planning process
  3. Levy discretionary rates
The most powerful is a fourth means. Rather than look for a stoush with their local pokie pubs and clubs, try talking to them. Here's an agenda for such a chat:
  • An undertaking to implement the measures recommended by the Productivity Commission.
  • Either ban children from their venues or at least remove children from the sights and sounds of pokie and other forms of gambling once inside the pokie pub or club.
  • More visible promotion of self exclusion
  • Prohibition simultaneous gambling on two or more machines.
  • Place Gambler's Help information not only in their toilets but their smoking areas.
All of these discussion points address only the at risk gambler and will not affect the revenue earned from the genuinely recreational gambler.

There is little cost in having an intelligent chat. Not even close to the legal, survey or consulting costs of a VCAT or VCGR brawl.

If the venues fail to co-operate the Council can make it known, so long as the objective criterion are established, that the venue is considered an unsafe gambling venue. Given Council's existing means of communicating with their rate payers the cost of communication is minimal.

Any council genuinely concerned about their citizen's welfare will resist the siren call of sharing in pokie revenue and, instead, address the real problem of the machines themselves.

Wednesday, 2 March 2011

A Tale of the Ol' West

South Dakota is known as the Mount Rushmore state. It's where four presidents likenesses have been blasted out of a mountain and people pose so that their finger appears to be sticking up Abe Lincoln's nose. It is also the state where pokies were banned for three months in 1994. This real world experience provides a true guide as to what might happen if the harm of pokie gambling were somehow limited.

Is the answer as the politicians and the monster Clubs Australia lobby predict? Will problem punters find other harmful ways to gamble?


What happened according to is:
"...the inquiries about gambling and the number of individuals receiving treatment for problem gambling diminished abruptly. When the machines were turned back on, there was a prompt increase in both of these categories.
These changes occurred despite the fact that alternative forms of legal gambling were available (i.e., scratch tickets, Indian Reservation casino gambling, and multi-state lotteries). This suggests that video lottery gambling machines presents a unique risk for the development of problems severe enough to prompt treatment. These data suggest little substitution of other forms of gambling occurred when video lottery gambling was not available."
These are not the conclusions of but a summary of the findings of a paper issued by the South Dakota Journal of Medicine co-written by two persons holding doctorate degrees and two with medical degrees in either psychiatry or psychology.

I would be happy to email anyone a copy. Just write to me at

This should end the speculative fantasy that the clubs are trying to fabricate into fact by virtue of repetition.