After two weeks of limbo we’re finally getting to the pointy end of negotiations between the major parties and the crossbenches, with Tasmanian independent MP Andrew Wilkie siding with the Gillard government yesterday.

His vote came in exchange for a boost to health funding and a string of key reforms to the poker machine industry. One of these reforms includes the introduction of a uniform “pre-commitment” smart card technology in all pokies, which will allow gamblers to control how much they spend before starting.

In setting out their key findings, the 2010 Productivity Commission report into gambling recommended a progressive move to a pre-commitment systems over the next six years. However the Wilkie agreement could see pokies reform implemented sooner, with a Gillard government committing an introduction of pre-commitment technology by 2014.

Crikey consulted the Productivity Commission report to see how a pokies pre-commitment system would work.

How would it work?

According to the Productivity Commission, a pre-commitment system involves limits being set by the user on how much they want to spend in a certain period, whether that be over a day, week or month. Another way gamblers can constrain their spending is by setting a time limit on their use of pokie machines. Users would need to sign up for a smart card to be able to play the pokies, with all machines linked to a central server.

Under a full system of pre-commitment, the Commission says there would be ‘safe’ default settings, with players then able to choose other limits or no limit. In the interim, the Commission also believe non-binding limits would still yield benefits, saying that they would “provide lessons” for implementing full pre-commitment in the future.

Have there been trials of this system before?

According to the Productivity Commission, pre-commitment systems have been trialled in South Australia and Queensland, where both trials were voluntary and involved setting limits via loyalty cards. The trial ran over multiple venues and concluded that gamers weren’t receptive to setting voluntary limits.

Pre-commitment systems are also being rolled out across Nova Scotia in Canada and in Norway. In Nova Scotia participating machines are locked until a player card is inserted, while in Norway all gaming is strictly card-based and cashless.

The Victorian government have also committed to introducing a similar system, which is mooted to go live by the end of 2010. While it will be voluntary for users to set a limit, any constraints set will be binding.

Will it work?

Around 13% of gamers set limits in one Queensland trial, while less than 1% were receptive in South Australia. However of those that did set limits, more than half found the system useful. Trials of the systems in Canada and Norway found that most users of machines regularly checked their account balance and gambling history.

According to the Productivity Commission, the social cost of problem gambling is estimated to be at least $4.7 billion a year, with more than around 600 000 Australians playing the pokies at least weekly. They believe policy measures with even “modest efficacy” in reducing harm is be worthwhile.

The gaming industry is seething over the decision, saying it reneges on a deal they had with Gillard. Should they be worried?

The Productivity Commission avoids proposing the early adoption of pre-commitment, citing the costs of machine modifications, and the technical and practical realities associated with the implementation of pre-commitment. The commission advocates implementing pre-commitment functionality in new machines, because the costs are much lower.