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Jun 28, 2011


This winter, the federal government rushed to regulate sports betting, with a live odds ban followed up by the AFL and NRL promising to impose their own vetoes on “exotic” bets and on-field cheats.

Stephen Conroy’s edict — which will stop Tony Greig droning on about Betfair during the cricket — received strong backing from state governments. But a crunch of the latest gambling numbers reveals outlays on footy and the cricket are the lowest of low-hanging fruit — by backing the crackdown provincial leaders have precious little to lose.

Take Victorian gaming minister Michael O’Brien’s presser bragging that he had “consistently expressed concern about the blurring of the line between advertising and editorial when it comes to sports betting advertising during the broadcast of live sporting events. ”

Particularly “insidious”, O’Brien reckoned, was the promotion of sporting odds targeted at children.

Buried further down the press release was the kicker. The Baillieu government was opposed to the federal government’s mandatory pre-commitment technology for poker machines, preferring a voluntary system that put the onus on individuals, not governments.

Pokies regulation is one area in which the states are at one, with South Australia, Queensland and Western Australia joining a chorus of opposition to Andrew Wilkie’s and Julia Gillard’s proposed laws. Victoria is the most virulent, threatening to take the federal government to the High Court if it proceeds with the mandatory measures.

A quick look at fresh Australian Gambling Statistics data released quietly earlier this month reveals why. Sports betting almost completely fails to register on Australia’s gambling radar — a reduction in revenue from the likes of Betfair, Sportsbet and Sportingbet would have next to no impact on state government balance sheets.

As a proportion of 2008-09’s total government gambling tax take of $5.2 billion, sports betting makes up a pitiful 0.34% or just $17 million across the country. Even the declining pastime of racing rakes in 22-times more cash than heavily-promoted wagers on the cricket and the footy.

Sports betting’s minnow status is reflected the actual amount punters spend. Real per-capita expenditure on sport was just $13.32 or 1.2% in 2008-09, compared to a whopping $975.23 or 85.1% for “gaming”, which includes poker machines and casino expenditure.

And according to the new AGS data, considered the bible among serious researchers, the dominance of the one-armed bandits is even greater when you include machines in casinos, echoing last year’s Productivity Commission report that showed electronic gaming’s total share had risen from 40 per cent to 75 per cent over the past 20 years.

It’s true that sports betting has undergone rapid expansion — 16% in real terms in 2006-07, 18% in 2007-08 and 5.6% in 2008-09. Next year’s 2009-10 data is expected to show another spike. In Tasmania sports betting grew 183% between 2007-8 and 2008-09, thanks mostly to Betfair’s 2008 High Court victory against the Western Australian government and in the other hotspot, the Northern Territory, $390 or 16% of an annual per capita spend of about $3,000 was spent.

The NT is the currently the only state government that issues licences for online gaming with the vast majority of betting websites filtered through the Top End.

Online betting is still dangerous, in the words of Tim Costello, because you can “lose your home without leaving it”. But in real terms the vast majority of Australia’s $19 billion gambling market continues to operate through pokies owned by conglomerates like Woolworths at clubs in poorer suburbs.

Pokies expert Charles Livingstone from Monash University’s medicine faculty told Crikey that “state governments are Australia’s biggest pokie addicts. Their total revenue — $5 billion — shows how deeply conflicted they are on gambling regulation.”

“‘It’s easy for Australia’s state governments to crack down on sports betting; their tax take is minuscule from that source compared to the pokies. And much of it goes to the Northern Territory, or Tasmania, anyway. Of course, there are five billion reasons why regulating pokie gambling to make it less harmful is an entirely different matter.”

Livingstone said pokies were still the biggest game in town as far as gambling in Australia is concerned, especially the $5 billion lost each year through the souls of the pathologically addicted.

“Despite recent hoopla, sports betting is still a small player. Even casinos are a long way behind the pokies; and NSW continues to be the country’s most pokie riddled state.”

Livingstone’s view is born out by the hard data, as the graph below shows.

Real poker machine expenditure, excluding casinos, was $10.5 billion in 2008-09, a small decline of $34 million on the previous year thanks to the Global Financial Crisis. NSW sits atop of the shame table, accounting for $4.8 billion or 46% of the damage with its 97,067 machines, followed by Victoria (25% with 29,272), Queensland (18% with 45,571) and South Australia (7% with 13,720).

The total number of machines paints a sorry picture.

South Australian Senator Nick Xenophon, a strong supporter of Wilkie’s legislation, was scathing when contacted by Crikey, and called for the states to get out of the way.

“State governments are the biggest pokies junkies in the country. The rivers of gold they rake in from gambling taxes come from rivers of tears.

“This is why federal action is essential when it comes to poker machines. The states just can’t be trusted to do the right thing.”

It’s no wonder premiers would prefer to gag the likes of Richie Benaud than do anything that might disrupt the stream of misery that ring-fences their credit ratings. Unlike the battlers that vote for them, they’ve been hitting the jackpot for years.


Jun 22, 2011


Much of Australia’s $22 billion gambling addiction has been well documented, poker machines, table games and wagering are all hugely popular with the punters. But what about online casinos? Untaxed, unregulated and under the radar, this so-called “unofficial” sector of gambling is increasing in popularity.

According to the Productivity Commission, the wild west of unregulated online gambling could be worth as much as $800 million annually. Industry experts recently pegged the number as high as $968 million — with a third of that funneling into online poker.

Dr Sally Gainsbury, a lecturer at the Centre for Gambling Education & Research, Southern Cross University, is currently undertaking a survey into online gambling, with the results set to be presented later this year.

As part of her research, Gainsbury has studied the growth of online casinos and their popularity with Australian gamblers.

“At the moment participation compared with other forms of gambling seems low, but it appears to be growing,” she told Crikey. “The thing about these offshore sites is that many are easily accessible to younger people and problem gamblers. There is also a lack of consumer protection.”

Under the Interactive Gambling Act passed in 2001, it is illegal for online casinos to accept bets from or advertise to Australian players.

But that does not seem to have to have stopped the growth of casinos. According to Gainsbury’s calculations, there were 2319 virtual casinos open for business in May this year — “although that changes all the time” — with 90% of operators offering play to Australian players.

One of the big operators is, who commanded revenues of $US221.7 million last year and profits of $US12.4 million (down from $US31.9 in 2009). Listed on the London Stock Exchange, its headquarters are based in the small English colony of Gibraltar — a popular location for online casinos.

At the time of her count, Gainsbury found Gibraltar had 291 online casinos operating in its jurisdiction. Gainsbury says the reasons for Gibraltar’s popularity could be due to its proximity to Europe and also its stringent regulatory body (a must for the legitimate operators).

There is also the small matter of tax, which at 1% of gambling income in Gibraltar is far more attractive than the 15% taken from the pot of operators in the UK.

Unsurprisingly, low taxes are a common theme among countries with the highest number of online casinos. English channel island Alderney charges 0% tax (only a license fee is required) and has 104 operators.

Tiny island republic Malta leads the way with 460 casinos and has an attractive tax rate of 0.5% gross amounts of bets. In Costa Rica — a country Gainsbury says doesn’t command many legitimate operators because of its lax regulation — online casinos are treated as call centres and face attractive offers also.

As well as an attractive tax rate, Gainsbury says suitable online casino locations need a good legal framework, an availability of workers that speak the required language and a decent telecommunications set up.

Aside from all that, the country also needs to sit in a compatible time zone.

But despite an explosion in the number of casinos competing for gambler’s dollars, the sector is not impervious to the odd economic shock.

According to figures recently released by gambling industry market research consultants H2 Gambling Capital, online gambling forecasts will amount to 23.66 billion euros this year, which amounts to a downgrade of year-on-year growth rates to 4.4%.

H2 attributes the recent FBI crackdown on online poker giants, PokerStars, Full Tilt Poker and Absolute Poker (which the industry dubbed “Black Friday”) as one of the reasons for the drop in revenue.

Other key factors include slower than expected regulation, the Japanese earthquake and the economic slowdown in the US and Europe.

North America is still the major market for online casinos, however the Black Friday crackdown may see its importance dip. Gainsbury says Asia is being eyed off as a potential online casino goldmine, but only if they liberalise gambling laws.

With so many casinos on the market, things can get competitive. Online casinos offer myriad of bonuses to get punters to sign up. Inducements include “welcome bonuses”, which are usually the doubling (or sometimes tripling) of a player’s deposit.

Gainsbury says there are 200 different forms of payment at the online casinos she looked at. These options ranged from traditional credit car billing to PayPal to specialised casino deposit services.

But despite the illegality of offering play to Australians, there has yet to be a prosecution of a single operator. Gainsbury says she is surprised no action has been taken.

“Despite the Interactive Gambling Act strictly prohibiting these casinos offering play to Australians, there have been no prosecutions,” she said. “To me it seems odd. I know there have been complaints, but no action has been taken.”

Perhaps, with so many potential tax dollars flowing out of the country to overseas operators, the regulators will look to act. Presumably letting our gambling revenue go offshore may not sit well with the states. After all, in 2009-10, they took in $5.2 billion of tax dollars from gambling.


Jun 20, 2011


It’s not uncommon to watch belligerent gamblers being marched out of Crown Casino by security after one too many bad bets. Boozed-up punters are regular fixtures on the gaming room floor despite laws banning gambling while drunk. But dealers say training is inadequate in addressing these issues and needs to be strengthened.

Before novice dealers are unleashed onto the gaming room floor, they must complete seven hours of full-time intensive training daily for six weeks. Of the 210 hours of training, just one hour is dedicated to responsible gambling and four hours to responsible serving of alcohol (RSA).

Crikey spoke to a dealer who said 80% of the training was focused on game technique. “We had to develop skills like flicking the ball, being able to strengthen our hands and flick it,” he said, adding: “Instead of grabbing chips, we have to push them out; it’s called drop cutting.”

Dealers are also trained to spot cheats on the gaming room floor in surveillance sessions — “the majority of those in the film were Asians” — and spent several hours on how to handle bullying in the workplace. One full day is dedicated to familiarising dealers with Crown’s Signature Club Program.

The dealer told Crikey he felt the training did not prepare him for the unvarnished reality of the gaming room floor. “You see a lot of aggressive and stressed people and you think, ‘oh you shouldn’t be here’. But nothing is done about it.”

He recalls an incident where a man approached him to say the $10 he put in the game of rapid roulette was missing. “He was on edge the whole time. The pit boss, who is charge of the pit, opened it up and couldn’t find the money anywhere.” But when the man was informed by the pit boss that would have to wait until the following morning when the money was counted he exploded.

The dealer remembers him exclaiming: “I don’t want to. I want my $10 now!” The pit boss tried to negotiate with the man but failed. “He was carrying on and saying to everyone, ‘don’t gamble at Crown! They’ll take your money’.”

By the end of the one-hour session on responsible gambling, dealers are expected to identify at-risk gamblers “if they were sitting at a table depressed” and encouraged to report such cases. “In theory yes, in practice not so much,” he said. “I don’t think it’s taught hard enough.”

He admits feeling conflicted about reporting at risk gamblers: “It’s very difficult because from a dealer’s perspective it’s quite judgmental, that this person has a gambling problem, when really I’m assuming.”

Gary O’Neill, Crown executive general manager of government relations and media, strongly rejects any allegation the training does not adequately address these issues.

“In Crown we have a responsible gaming customer support centre,” he explained to Crikey. “We’re the first casino in the world to establish that and we have been going for half a dozen years. There is no legislation which compels us to do that, there is no regulation that compels us to do that. It is fully funded by us.”

The centre is located in the basement of the gaming room floor, near the poker rooms. It can be accessed 24 hours a day, seven days a week and offers counselling and, by appointment, pastoral support from resident Crown chaplain Father James Grant.

The damning findings in Regulatory Failure: The Case of Crown Casino by Deakin University academic Linda Hancock proved to be a source of ire when mentioned. Her interviews with 225 gaming room floor staff revealed a culture of letting sleeping dogs lie.

O’Neill told Crikey if these gaming room floor allegations were true, Crown would have been shut down long ago. Despite consistent testimonies from 225 Crown staff members, O’Neill questioned the authenticity of the claims and noted the sources have always been “determinedly” anonymous. Furthermore, Crown employs 7700 staff and if the issues were as serious as reported more would have come forth.

“If any of that staff have any evidence whatsoever to substantiate these allegations, they have a duty to present it, to come forward. That doesn’t mean they don’t have to come forward to Crown, if people are making these unsubstantiated claims I think they have a responsibility to regulators in Victoria.

“What I don’t accept there is some sort of state-wide conspiracy when you consider that Crown is under daily scrutiny, I mean daily scrutiny, 24 hours a day, seven days a week by at least half-a-dozen government agencies, not to mention government departments.”

Crikey’s source said Crown’s alcohol policy was equally embarrassing. “It’s like the RSA at Crown and we were taught to report someone that was drunk. But people are playing on the gaming floor drunk all the time,” he said. “I’ve spoken to other people who think Crown’s RSA is pathetic.

“If we report someone who is drunk and not causing trouble, that’s just being politically correct.” He said he has never reported anyone playing drunk and neither have other dealers.

O’Neill says it’s inevitable there would be a few drunken patrons out of the 17 million visitors streaming through Crown’s doors each year. “Now from time to time, people will transgress and obviously, from time to time, too intoxicated in the bars or something. Those people are removed. Those incidences will happen and they will happen everywhere in Melbourne,” he said.

But these issues appear to be far from the minds of hopeful punters on a crowded Saturday night when Crikey visited the Crown gaming room floor. The dimmed lighting and its confusing maze layout with club beats in the background proved to be an intoxicating mix. Despite the presence of clocks, this reporter unintentionally spent more than three hours wandering through the gaming room floor.

One punter, Ian, confessed he loved visiting Crown: “I don’t know, it’s a break from the city. It’s so good in here, so nice, fresh. It feels so upper class and so different from the outside of Melbourne.”

Brad was optimistic about his chances after a turn on the roulette table: “I just like coming out here, hopefully to win big and never have to work again. The roulette tables are my favourite. Lots of people win big on them and I usually follow them.”

Said the dealer: “I would love for Crown to be a place to be where people to know their limits and stick to their limits. The reality is people struggle to stick to their limits. That’s just a known fact.”


Jun 10, 2011


When Angry Anderson was screaming the chorus to We Can’t Be Beaten in the eighties, it isn’t too likely he was talking about having a flutter on the pokies.

But a couple of years ago, in a deal worth about $50,000, the Rose Tattoo front man allowed his name and iconic face to be slapped on a poker machine. And with odds of winning the top prize being somewhere in the vicinity of 1 in 9 million, it’s quite likely on this occasion punters will indeed be beaten.

While they may just look like pictures on a screen, as Crikey reported yesterday poker machine themes are a very important part in attracting punters to pubs and clubs around the country.

The big manufacturers know this, and are spending millions of dollars each year mastering their brands. And with pokies linked across the country, EGM manufacturers know which of their machines are underperforming and which have that magic appeal.

Australia’s largest maker of poker machines, Aristocrat Leisure, spends more than $100 million annually on its worldwide research and development — of which about half is spent on developing games.

The other big local players, International Gaming Technology (IGT), Ainsworth and Konami, also spend millions on R&D, with strength of game titles seen as a key indicator for potential investors. The result is a glittering array of new machines built to entice and entertain players for as long as possible.

Every year Aristocrat and its competitors take lots of new themes to EGM expos around the world, with the intent of testing the waters with club owners for the next big thing. More than 150 exhibitors attended last year’s Australasian Gaming Expo, where Nevada-based Bally Technologies launched its entry into the local market.

A big player on the Vegas Strip, Bally boasts the latest in EGM technology — including high-definition video, surround sound stereo and motion sensing capabilities.

But it’s not just pretty pictures where the tech battle is being fought. Aristocrat have started to hit back using movie and television official licensing in their themes, which has seen machines like Jaws, Sopranos and The Phantom being introduced onto the gaming floor.

Aristocrat are also the company who’ve commissioned a new game themed around Australian pub rock band Rose Tattoo, which features Angry Anderson (as well as the Eureka flag) as a jackpot logo.

But regardless of how successful Angry or HD technology is at bringing in punters, most new games are still being fashioned around the cartoonish themes that have been used in clubs for years.

A study by Gambling Research Australia last year found the most popular themes still centre around the established formulae of magic, luck and love. There is also a healthy fan base for ethnic-themed pokies (think The Golden Gong, Queen of the Nile and Indian Dreaming).

These findings are mirrored in the games offered by the big players. For all their bluster about improved gaming technology and superior title development, there is a very distinct pattern in what the big manufacturers think the punters want.

In its library, Ainsworth offers Peking Panda, Wolf King and Year Of The Ox, while IGT boasts Apache Valley, Dolphin Dreams and Flower of Mexico. Over at Konami it’s all about African Diamond, China Shores and Egyptian Sunset.

But a machine’s appeal only lasts for so long. Once a high performer in South Australia, Aristocrat started pulling its Indian Dreaming machine out of pubs and clubs in 2009 because it was failing to bring in the punters like it used to.

Pokies researcher Dr Charles Livingstone, from Monash University’s Department of Health Social Science, says a machine’s theme, while important, is only part of the overall appeal of the pokies experience. There is also the combination of bright lights, colours and noise — all of which impact on the conditioning of players to keep playing.

Ideas such as a “loss disguised as a win” — where a machine “goes off” despite paying out less than what the player bets — and the regular use of positive aural and visual reinforcements can also keep players on particular machines.

When kept in isolation a machine can be ineffectual, says Livingstone. But take this experience to a mega club such as  capital city casinos — where the drone is constant — and the sensation can become hypnotic.

“This is very attractive to some people — so attractive in fact that it has kept people at machines whilst their children die of heat exhaustion in the car, and regularly keeps people playing for long enough to go through their wages, their relationships, their homes, their employer’s money, their self-respect, and in some cases their lives,” Livingstone said.


Jun 9, 2011


You’ve got 20 bucks to flutter on the pokies. You’ve made it to the local pub. The next step: choose a machine.

You gravitate towards the Turtle Treasure, with its cute Disney-esque sunken-treasure motifs. But you hesitate. The hunting-themed Black Rhino has caught your eye — you’re sold on the palette of deep safari reds, much more appealing than the Turtle’s bright aqua colours. Manly, even.

It’s a question that poker machine developers spend big bucks trying to answer: which brand of pokie speaks to you? And why?

While they may seem cartoonish and tawdry on the outside, these themes play an important part in conditioning players to gamble. And millions of dollars are being invested by the big companies every year to find the next big thing.

According to the Productivity Commission, Australians poured almost $12 billion into electronic gaming machines (EGMs) across pubs, clubs and casinos last year. When compared with total gambling activity, they are far and away the nation’s favourite way to have a punt. So what makes them so appealing?

Dr Charles Livingstone, from Monash University’s Department of Health Social Science, has developed research into the themes employed by manufacturers to get people playing their machines.

He also happens to be in possession of a Dolphin Treasure, one of most popular poker machines in the country.

Dr Livingstone and his team purchased the Dolphin in order to study the machine’s game maths — the rate at which they pay out. No longer in service (thanks to a government permit forbidding Livingstone to profit from it), it’s feasible the retired machine brought in more than a million dollars during its tour of duty.

Livingstone told Crikey a machine’s brand can be very important to players: “If someone’s favourite machine isn’t available, then quite often they will leave and head for another venue.”

In research commissioned by the South Australian Independent Gaming Authority, Livingstone found two of the most popular pokies in that state were the Dolphin Treasure and Shogun machines.

According to a study released last year by Gambling Research Australia, the most popular themes for gamblers relate to luck or winning money (27%), Egyptian and wildlife nature topics (each 15%) and themes of mystique and magic (11%). Problem gamblers, it reported, are more likely to place importance on a machine’s theme — preferring mystique, love or Asian-themed EGMs.

While the study also found that far-and-away the most appealing characteristic of a machine was whether it had been “lucky in the past”, it also said the impact of branding could not be discounted.

As well as hiding the seriousness of what lurks beneath, Livingstone says poker machine themes like Dolphin Treasure provide a feeling of escapism from everyday life. He also says different themes appeal to different segments of the gambing market and will cater to their needs:

“Games with identical game maths but a different theme are commonly much less successful than the original games from which they’re derived,” he said. “Suggesting that the careful marrying of game maths and theme is a critical element of game design.”

The drip feeder

The Dolphin Treasure with its bright blue colours and cute aquatic icons (starfish, seahorses, turtles) plays well to the middle-aged female demographic, says Livingstone:  “I’ve seen players scratch the dolphin’s rostrum for good luck.”

These machines will often pay out in ways that cater to that market, says Livingstone. Machines like the Dolphin Treasure — such as the Indian Dreaming, with its pseudo-spiritualistic theme — offer small and regular payouts to keep players interested.

The key to this kind if appeal is achieving maximum time on the machine, says Livingstone. A risk-averse, middle-aged female poker player would prefer to stay on a machine as long as possible, rather than bust out early.

Similarly themed machines would include Mermaid, Brazil, Geisha, Fire Dancer.

The big risk, big win machine

These are the big bet machines, typically offering a $1 minimum stake for one spin, and are usually aimed at a younger, more aggressive gambling clientele. An example of this is the Shogun (or Shogun 2), which is a more macho-styled machine and will pay out less often but in bigger amounts.

Other similarly branded machines include Taipan, Spartan, Heavyweight Champion and King of the Castle.

Tomorrow: the hottest new pokies brands…


Jun 1, 2011


The Queensland Hotels Association’s “issues brief” on gambling reform (reported in Crikey yesterday) utilises classic tactics pioneered by the tobacco industry — misinformation, unfounded argument, and outright lies.

In its brief, QHA puts out several standard industry lines about why pre-commitment won’t be effective. These points have also recently appeared in statements by some state governments and other gambling industry lobbies. We respond to some of these below, based on our engagement with evidence, rather than on the protection of vested interest.

1. Problem gamblers will simply set unrealistic limits.

Almost all problem gamblers have lucid moments where they reflect on the situation they’re in, and try to find a way out. At such a stage, an effective pre-commitment system will provide an important tool to find that escape route, and will substantially reduce the time to recovery. Many problem gamblers support this scheme and are crying out for ways to support safer gambling.  Those beginning to struggle with a gambling problem will be greatly assisted in managing it, and even regular untroubled gamblers, who often report excessive spending, will almost certainly find their spending much easier to predict and control. Importantly, pre-commitment will greatly reduce the uptake of problem gambling. And for the first time, pokie gamblers will be able to determine how much they’re prepared to spend on their “entertainment”.

2. Pre-commitment is a big-brother approach to gambling — ordinary punters won’t register.

We already live in a cashless society and use cards for a range of purposes — withdrawing money, buying groceries, using public transport, borrowing a book from a library, hiring a DVD, earning loyalty points. Many gamblers already have online betting accounts that require them to register sensitive personal information, and which track their gambling activity in fine detail. The Wilkie proposal would not require central storage of player gambling data. The card would be easy to obtain, using the same level of ID required to borrow a DVD. It would provide a tool to allow people to much better manage and make better individual decisions about their gambling activity. Under the Wilkie committee’s proposals, recreational players won’t even need a card to play low-risk machines, and research demonstrates that they won’t notice any difference.

3. Pre-commitment will hurt the gambling business, especially smaller clubs

Clubs in Australia rely on the pokies, on average, for 61% of their overall revenue. Unfortunately, at least 40% of that comes from people with a serious gambling problem. A business model built on siphoning money that should be spent on food and housing from the pockets of vulnerable, often already disadvantaged punters and their families is unsustainable. Not only is it unethical, it entrenches disadvantage and costs taxpayers money. The estimated implementation costs of the pre-commitment system are grossly overestimated by the industry, but even at that inflated level only equate to about a quarter of losses on pokies in Australia last year. And those small clubs that frequently claim that they have no problem gamblers among their user group should be unconcerned. If their claims are correct, their revenue will be largely unaffected. Wilkie has also proposed deferring implementation for small clubs until 2018, allowing them to turn over machines in a normal replacement cycle.

4. We need more evidence — at least pre-commitment trials should be conducted

Evidence from Queensland, South Australia, Norway and Nova Scotia shows that voluntary pre-commitment is much less effective than a mandatory scheme. Australians have been world leaders on tobacco, seat belts and gun control, and there’s no reason we can’t do it again with gambling. Inaction is costly — in human and economic terms. Suggesting that a trial is necessary is a delaying tactic, especially given that the possibility of a trial in Tasmania (the most useful and likely site) has been torpedoed by the poker machine industry’s refusal to participate. In any event, any such trial would take a minimum of three years. In that time, $14.1 billion of harm would be done to the Australian economy, hundreds of thousands of people would develop a gambling problem with all its associated harm and suffering, and millions of others would be adversely affected.  The industry would also pocket upwards of $36 billion in gambler’s losses, and problem and at-risk gamblers would lose $21.6 billion.

There are many other tactics that the gambling industry resorts to in defence of its profits — developing cosy, mutually lucrative relationships with governments, funding researchers to produce favourable opinions and “evidence”, and of course misleading the public through misinformation campaigns. Overall, the Wilkie reforms provide a reasonable, non-prohibitionist response to the harms created by an industry that clearly believes its profits are more important than the well-being of its customers. Their implementation will result in significant economic and social benefits for Australia, and are very well justified in a public health sense.

This story is the latest installment in Crikey’s series Last Bets — examining just how hooked our country is on having a flutter.


May 31, 2011


Forget Oprah — she was so 2010 — the big buzz word in tourism this year is gambling. And the bigger the gamblers the better. The kind of jet-setting, big-money VIP punters who plunge more than half a million dollars on a game of baccarat and not even blink. And the big high rollers are in Asia.

Crown Casino controls at least 80% of the high roller market in Australia — and James Packer doesn’t want to lose it.

Now, to keep the big punters coming back, Packer is embarking on an extensive $1.3 billion renovation of its VIP rooms — turning Crown into a six-star high roller palace.

But he wants some help. Packer has bemoaned Tourism Australia for being too eager in riding the backpacker’s back. He says the government is not seeing the full tourism benefits in promoting casino tourism — particularly those of the high rollers in Asia.

”Singapore, a country renowned for being strict, made an assessment on casinos and decided that the benefits massively outweighed the costs, and the result of that is it has had the greatest rebranding success story in the world. Singapore’s tourist arrivals are up 25%,” he told Fairfax recently.

Packer has consistently stated he wants Australian tourism chiefs to echo what is happening in South-East Asia, where governments have given the green light to casino barons looking to cash in on the tables. And his pleas haven’t fallen on deaf ears. Tourism Minister Martin Fergurson told The Age this week “casino tourism is real” and it’s a “fact of life — high-roller tourism is big-yield tourism”.

And the importance of the big whales should come as no surprise: VIP players accounted for 17.5% of total casino gaming revenue in 2007-08, while expenditure associated with the big punters saw GDP rise by $84 million.

But Ferguson and Packer don’t just want the gambling dollars — they know punters will splash out on accommodation, food and beverages and shopping. Gamblers spend more than other tourists: a total of $4.9 billion that year at an average of $4940 per tourist — almost double the standard tourist spend of $2630.

Of the 49.6 million casino patrons in 2007-08, 2.4 million were international visitors. There are an estimated 30 million Chinese patrons in the premium gambling market. According to tourist numbers released this week, by 2020 China is expected to be the most valuable inbound tourism market, with visitors from South Korea, India, Malaysia and Japan predicted to round out the top ten.

According to an Allen Consulting submission to the Productivity Commission report into gaming, tourists from China are above-average gamblers with an average stake up to 1.8 times that of the run-of-the-mill gambler.

And the Chinese aren’t even the biggest gamblers: visitors from India, Singapore and Malaysia are also big spenders. When compared with the frugal punters from the UK — who spend 70% of the average gambling tourist — you can see why Packer can see the dollars in Asia.

But Packer isn’t alone in trying to court the premium gambling market. Star City in Sydney recently invested in an executive jet to fly punters to its tables. Jupiters on the Gold Coast have also looked at lavish planes to fly the biggest punters down under, while Packer has also plunged $600 million into his Perth casino.

But despite its best efforts, Crown has been losing high rollers to the big resorts of South-East Asia. Macau, the “Monte Carlo of the Orient”, has 33 casinos, with gambling making up half of the island’s economic revenue. Singapore is another big player in the casino boom: once reticent to allow casinos, lest they bring crime and social ills, the city-state has in recent years embraced the neon lights.

Its two new mega-casinos, the Marina Bay Sands and Resorts World Sentosa, are expected to rake in $US6.5 billion this year. It’s no coincidence Singapore has enjoyed 13 consecutive months of record visitor arrivals. Last December saw a record month for tourists, with 1.1 million visitors — up 16% on a year ago.

Like Packer, the owners of the Singapore strip have been at pains to project their casinos as entertainment complexes rather than gambling meccas. But the numbers suggest a different story: one analyst told The Economist this year an estimated 85-90% of the two casino’s takings come from gaming (of which most comes back to operator thanks to Singapore’s low tax rate).

Those figures have been echoed here: in 2007-08 gaming activities comprised 78.2% total casino revenue, followed by food and beverage sales.

But perhaps Ferguson and Packer are getting a bit ahead of themselves when they say casino tourism is the next big thing. When Crikey went to the Australian Tourism Export Council they said there were no casinos listed as members of the peak body.

This story is the latest installment in Crikey’s series Last Bets — examining just how hooked our country is on having a flutter.

NOTE: An original version of this story said Sky City casino is in Sydney. Sky City is actually in Adelaide and Darwin. Star City is in Sydney. A quote from the ATEC has also been removed.