When Julia Gillard and Andrew Wilkie publicly committed to a few short sentences on pokies reform in September 2010, who would ever have thought it would generate so much media interest and political debate?
For five days now we’ve had another burst of coverage ranging between Nick Xenophon’s big prediction of failure in The Sunday Mail, to Alan Kohler’s column on Business Spectator stating the internet will kill the pokies anyway, and even an editorial in The Australian Financial Review today.
What will happen when we finally see some actual legislation?
It was the Prime Minister who quite deliberately triggered this latest wave of publicity but visiting Wilkie in Hobart and meeting him at the city’s most swish waterfront hotel — which happens to be owned by Federal Hotels, the company with a lucrative monopoly over pokies and casinos in Tasmania. Talk about provocative.
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The coverage has subsequently waxed and waned on the predictable media language of whether Wilkie has back-flipped and whether Gillard wants to dud him.
Keane is normally a great defender of the Productivity Commission but he ignored their endorsement of mandatory pre-commitment as a layer on top of a maximum $1 bet and instead lined up with the pokies industry campaign when he described mandatory pre-commitment as “an intrusive, unjustified interference with individuals’ rights”.
If influential commentators like Keane won’t even get behind an evidence-based proposal with majority community support, then it all looks too hard.
So why isn’t the government and the opposition embracing the preferred simpler option of Wilkie, Xenophon and the Greens in pushing for reductions in the maximum rate of hourly losses that pokies addicts can suffer?
While reducing the maximum NSW bet of $10 to $1 in a single move would hit revenue to a degree, it is technically very easy to phase in reductions. Then again, New Zealand recently cut its maximum bet to $NZ2.50 and it hasn’t had much of an impact.
Victoria seamlessly moved from $10 to $5 three years ago with barely a whimper from the industry. That said, Victorian pokies losses initially fell by $100 million to $2.6 billion in 2009-10, but then jumped again to $2.65 billion in 2010-11 and are likely to hit a new record this financial year.
Given that almost 90% of gamblers would remain below a $1 maximum bet, it is hard to see how the industry would run an effective campaign against it, especially if they were given a few years to phase it in.
NSW and South Australia both presently have the highest maximum bets in clubs and pubs of $10, but James Packer’s Crown Casino in Melbourne is particularly privileged with some of its public floor machines allowing $50 maximum bets.
The maximum bet language can get confusing because the other key variable is the so-called spin-rate regulating the speed in which bets can be placed. In NSW this is unregulated, which is how you can theoretically lose more than $10,000 an hour on a $10 machine. Victoria requires a gap of 2.14 seconds between each bet so at $5 a bet that’s a maximum loss of $8411 in an hour, assuming every punt was lost.
Given Barry O’Farrell’s NSW government enjoys such a huge majority over its demoralised Labor opposition, it is puzzling why they can’t even match Victoria’s tame regulations to at least look like they are contributing some effort to the goal of ending the embarrassment of Australians being the world’s biggest gamblers in per capita terms.
While pokies are most embedded in NSW, even long-serving Packer family lobbyist Graham Richardson now admits Bob Carr’s government was wrong to allow pokies into pubs.
If everyone agrees it is terrible to see more than 100,000 Australians struggling to manage addictions to high-intensity poker machines, the simplest language to adopt going forward should focus on the maximum hourly loss on any machine. Wilkie, Xenophon and Costello say it should be $120 an hour.
OK, so who in club, pub or casino land is going to argue if Gillard comes out with a legislative proposal for a maximum hourly loss of $200, with a carve-out for the high-roller areas of casinos? The implementation would be no different to requiring new tyres with more grip whenever your old wheels need replacing. In other words, give venues three to five years to progressively switch the machines over.
The key performance indicator of such a move has to be focused on the staggering $12 billion of annual losses that Australians incur when playing the pokies. That figure must get back below $10 billion within the next couple of years and then head down towards something more socially tolerable, such as between $6-8 billion.
Yes, that would require new business models for some pubs or clubs, but so what? The clubs industry as a whole is carrying very little debt and has literally billions of dollars in accumulated reserves, mostly land and buildings, courtesy of not being able to distribute pokies profits to members. Pubs have flourished for decades without pokies and ANZ, the largest pokies venue lender in Australia, is more than capable of swallowing a modest hair cut on some over-leveraged and over-capitalised venues.
The same goes for Woolworths and Wesfarmers, the two largest pub owners in Australia.