In Defence of Gambling (Except the Pokies) (Part 2)

If you must play, decide upon three things at the start: the rules of the game, the stakes, and the quitting time. ~Chinese Proverb

The Productivity Commission is the premier economic and public policy agency in the country. It was set up by John Howard in 1998 and is acknowledged by both Labor and Liberal parties for providing non-partisan, high-quality advice on when requested by government. The Productivity Commission was asked to look at gambling in Australia, in particular problem gambling. It was the commission that came up with various options to reduce problem gambling, including through the ‘pre-commitment’ scheme and betting limits that Clubs Australia are complaining so bitterly about. So we should start by noting these proposed poker reforms have not come from Nick Xenophon, or from Andrew Wilkie, or from some tea-sipping bible-thumping wowser, these ideas have come from probably the most respected economic agency in the country. This is the same report, I hasten to add, that calls for the managed liberalisation of online poker, arguing that it is a game requiring skill and not prone to problem gambling (bizarrely, while it is legal to play online poker in Australia, it is not legal for companies to offer Australians that gaming service).

Poker aside, the Productivity Commission Report, plus a number of studies by Australian universities, has uncovered a whole pile of nasty facts about the pokies. These include rising crime rates, suicides, bankruptcies and mental illness all associated directly with the poker machines. A report for the Victorian Government found that after drug use, problem gambling is the second highest cause of crime in the state. It is particularly associated with robbery, theft and fraud. A recent investigation by the ABC discovered drug dealers were recruiting problem gamblers as ‘crop sitters’ and heroin mules. Loan sharks hang around poker machine rooms, lending out money to regular pokie players. When they can’t pay the money back they’d be coerced into allowing hydroponic crops of dope be grown in their home, or in running drugs from South East Asia. A study of 600 prisoners from the Vietnamese community in Australia found that 75% were problem gamblers, nearly all of which who had recruited playing the pokies and many of whom had no previous criminal record. 

Problem gambling – of which 80% is caused by poker machines – costs the community more than 4.7 billion dollars every year. That is in health, police and social protection services. That is the cost of the crimes, the mental illness and the broken families. And that cost does not include the 20 or so suicides each year attributed to problem gambling. I guess the Productivity Commission did not want to put a price on human life.

As a mate who is a professional poker player said to me: poker, sports betting and the horses are a battle of wits. Everyone has the same information at their disposal, and those who process it best make the money. Table games and the pokies offer literally no chance of winning, just the illusion. He was right. But I think the pokies barely even offer the illusion. Don’t call playing on a poker machine gambling. Where is the gamble? It promises immutable losses an ever diminishing 15% loss-rate until you are stone cold broke. Call it a misery machine, call it an automated state government tax-collector. Call it nihilism, but don’t call it gambling. Tom Cummings, a reformed problem gambler who lost everything to the pokies, has described his experience as such:

“…while I was playing the pokies, I wasn't gambling on anything else… and in the years since I stopped, no other form of gambling has interested me. It wasn't about the gambling; it was about the pokies and nothing more.

Poker machine addicts are not problem gamblers, not in the classic sense. It's not about weighing up the odds, making your decisions and sweating on the outcome. There's no sense of achievement, no rush, no thrill. Poker machines dull your mind and provide a refuge from the world. It's about repetition, the hypnotic action of the spinning reels; it's the very fact that no knowledge or decision-making is required that makes them so effective at fostering addiction and taking your money. And every few seconds, you have the opportunity to win… to make up for the losses you've already had.”

The evidence for this seductive pull into the despair of problem gambling has been around for a long time – the Royal Commission into Gambling in WA in 1974 came to the conclusion that “….poker machine playing is a mindless, repetitive and insidious form of gambling which has many undesirable features. It requires no thought, no skill or social contact. The odds are never about winning. The Royal Commission at the time decided to ban the pokies, and with the exception of Burswood casino, that ban has stayed in place ever since with the support of both the Labor and Liberal parties. The result has left WA with the lowest problem gambling rates in the country. And by the way, WA has a thriving clubs and sports sector that doesn’t need to rely on poker machines as a business model.

In the rest of Australia, the pokies are a fact of life. But that doesn’t mean we have to accept them unquestionably. The Productivity Commission, much like the old Chinese proverb, has suggested implementing two things: the stakes and the quitting time. For the stakes, if you want to bet up to a dollar per spin, there will be no difference to the games you play today. That goes for 88% of us. 88% of people who play the pokies play a dollar or less, and that means 88% will not notice one jot of difference. For all those people talking about a draconian ‘license to gamble’, they are kidding themselves – for the vast majority, no card, or registration, or whatever you want to call it, is ever required (although I note that when joining any club in Australia, you are nearly always obliged to give over all of your personal details anyway if you want to become a member and play the machines). Some other recommendations are obvious – a limit on the ‘stake’ to reduce the maximum you are able to lose from 1500 per hour (as it is now) to 120 an hour. A limit on how many notes you can stuff into a machine at once, and on how much money you can withdraw at nearby ATMs.

However, if you are in the 12% of players who wants to gamble at more than 1 dollar a spin – and therefore expose yourself to losing thousands of dollars an hour – the Productivity Commission says that you have to nominate the quitting time. The premise of this – backed up by research – is simple. At the outset of a gambling session, problem gamblers experience a moment of clarity. They know how much they are willing to lose: they know exactly how much they can afford to lose before it cuts into the rent payments, the grocery list, or the electricity bill. So this is where punters ‘pre-commit’ to losing only a certain amount. When you play, you register on your card how much you are willing to lose. Simple. Again, to quote ex-addict Tom Cummings:

“All those mornings that I woke up vowing to change; all the times I couldn't look my partner in the eye; every time I lied to my family and friends; if I had just had the ability to put a limit on my spending there and then, a limit I couldn't ignore once I was sitting at a machine, I would have grabbed at it like a drowning man at a life saver. To be given a tool that I could use to exert some form of control over my addiction would have changed my life; may even have given me the strength to stop, on my own terms. Because like most poker machine addicts, I wanted to stop. I was looking for a way.”

Some of the recommendations of the report are straightforward, some are more complex and will take longer to implement, but all are sensible and doable. But this game has a lot of money in it, and vested interests as a rule don’t like giving up big pots of cash. This is how big it is: clubs in Australia make 10.5 billion dollars from gambling every year. All the casinos in Australia make 3.5 billion. Think about that – the clubs are earning three times that of the casinos, and all from the pokies.

It is worth emphasizing that these reforms are not designed to stop gambling. Rather, the Productivity Commission says the intention of the new laws is “not to deter gambling, but to facilitate its enjoyable consumption”. This isn’t about denying you your right to drive; it is about making you wear a seat belt. But the pro-pokies lobby doesn’t care about the seat belt. From their perspective, it is your democratic right to drive the car right off the cliff.

I recall a friend from overseas coming to visit from the US expressing astonishment at the number of casinos in Australia. I didn’t know what he was talking about, pointing out we only had one or two in each state, and that Crown Casino had nothing on Vegas. He replied and said he wasn’t talking about the major casinos, but the casinos we have on every corner. He was talking about the clubs, something we as Australians just take for granted. Along I guess with the bells and clanging of the poker machines in the background as we sit down to have a beer and watch some sport when we go down to the local. This American friend was on to something. According to a previous report by the Productivity Commission, Australia hasthe greatest number of ‘high-loss’ machines (machines that you lose 1500 bucks or more an hour) in the world and 20 % of all the gaming machines in the world.We have about 200,000 machines overall, or about 1 for every 100 people. That ratio is more than the US, UK, NZ, Canada, Russia or any other European country excepting Monaco.

But it is becoming harder and harder to cut through the vested interests in this debate, as the arguments offered against the reforms reach dizzying heights of hysteria. I note, for example, that the RSL has come out and said that without the pokies we’ll have to ‘cancel ANZAC day’ and limiting what we spend on poker machines is flying in the face of what our forefathers fought for. Seriously. Well, I call bullshit on that. Both my grandfathers fought in the Second World War – one was a tail gunner over Borneo, the other an infantry man in PNG. I never heard either of them tell me they went over there to fight for the right to play the pokies. Which should not come as a surprise given slot machines only came to Australia in 1956. I thought they were fighting to keep the Japanese out of Australia, protect our freedom; you know, little things like that. The suggestion that diggers somehow had the pokies in their mind as they fought through the blood and mud on the Kokoda trail or Guadalcanal is ridiculous, and any grub making it needs to give themselves an uppercut.

I wish we had a real casino on every corner. At least we’d be honest about what the ‘clubs’ are increasingly becoming synonymous with. But also for more practical reasons – if every club in Australia was allowed to have blackjack, roulette, the regular table games, plus two-up and a sports book – but no pokies – then the number of problem gamblers would be reduced. They’d be there, of course, but according to the research, nowhere near in the numbers that they exist today.

But I tell you what, how about this. How about on top of letting every club be a casino, on ANZAC day (and ANZAC day alone) we bring the pokies out and let everyone play them. Given it is such an important tradition and all, you know. We can mark it as a special event, as we drag the sacred poker machine out from the back room, wipe the dust off, plug the old girl in and let our proud veterans dump 1500 an hour for the whole day. But only for that day. Every other day of the year those toxic little machines are locked behind closed doors. I’d rather see a bunch of old diggers playing two-up every day than the poker machines.

I could point out of course that there are other ways to get people into pubs and clubs. Live music, for example. Our poor, beleaguered live music industry slowly receding every year as stages are torn down and lines of pokies sprout up in their place. Remember when Australia had a thriving live music scene? Here’s a statistic worth remembering: in NSW, pubs without pokies host on average 160 gigs per year. Pubs with gaming machines hold on average around 55 a year.

But I digress, if some old pensioner out there doesn’t care for live music, and thinks they have a god given right to bankrupt themselves on a poker machine, then they still have that right. They’ll still be able to burn 120 / hour on the pokies. I’m guessing the average poker machine playing pensioner doesn’t earn more than 120 an hour, so that desire for pokies self-destruction will still be sated. It’ll just be that little bit harder than it once was, maybe just enough to stop some gamblers from reaching the point of no return.

In Part 3, we will look and the AFL, the NRL, and whether they need the pokies.