Gambling in a Free Society
Presentation to the RSL & Services Clubs National Conference
27 July, 2009
By Richard Allsop
Gambling is a pastime that has brought pleasure to free citizens through most of recorded history.
I say to free citizens because it is a striking fact, and certainly no coincidence, that authoritarian governments of both Left and Right are quick to ban gambling. The latest example of this phenomenon is Putin's Russia where, in an example of ever increasing authoritarianism, sweeping new restrictions on the gaming industry came into effect on 1 July forcing casinos and poker machines halls across Russia to close.
Fortunately, in a democracy like Australia such comprehensive restrictions are unlikely, but punters and industry alike need to remain vigilant to protect their rights; rights which are constantly being assailed by a range of critics proposing ever greater restrictions on gamblers.
Now, increasing restrictions on the right to gamble are not new in Australia. The late 19th century and early 20th century was an era which saw increasing regulation of a range of activities including shop trading hours, the serving of alcohol and gambling.
In relation to alcohol, the temperance movement's influence climaxed in the First World War, with the imposition of 6 o'clock closing, the introduction of local preference provisions and bans on the employment of barmaids. Amusingly, many barmaids were re-employed during the Second World War, prompting some wags to suggest that stopping them working was essential to defeating the Kaiser, and encouraging them to work was essential to defeating Hitler.
With gambling, the same era saw ever more strenuous efforts by governments to close down any off-track betting on horseracing, whether by SP bookmakers or, most famously, with John Wren's tote. Wren's most recent biographer, James Griffen, highlights just how much hypocrisy was involved in the pursuit of Wren's gambling operations. Politicians, and other guardians of community welfare, claimed it as their duty to save working class gamblers from themselves, yet there was never any similar push to stop similarly "illegal" gambling in city clubs. It should also be noted that Wren's tote was operated in an honest manner, and gave a better return to punters than its rivals.
Fortunately, the period from the 1950s to the 1990s saw a progressive liberalisation of many areas of Australia's economy and society. In regards to gambling, there were reforms such as the introduction of legal off-course wagering through TABs and legalising poker machines, beginning in NSW in 1956.
It is no coincidence that the most prominent individual opponents of poker machines nationally today come from the states such as Victoria and South Australia, which did not introduce pokies until the 1990s and also have strong non-conformist traditions.
These days even the non-conformist religious ministers tend not to use religion directly in their argument against pokies, instead relying on more humanist grounds. However, it is an intriguing question as to why anti-gambling activists tend to single out the pokies. It cannot be because of rates of return to punters, because punters get more back from pokies than they do from wagering and vastly more than they do from buying lottery tickets. Perhaps, like the woman who in the 1980s wrote to The Age opposing a proposal to sell Tattslotto tickets in TABs on the grounds that she did not believe Tatslotto should be associated with gambling, some types of gambling are more socially acceptable than others.
One is inclined to suggest that there is a strong class element here. The chattering classes look down on pokies players and patronisingly feel that pokies players must be dupes for even wanting to gamble in this way. Combine this with a media always keen to run bad news stories and one has a difficult scenario for anyone trying to defend either the gaming industry or its customers.
Just last week, the latest figures for gaming turnover in Victoria were reported with screaming headlines about gaming "losses". It is important to consider this use of language. If I spend money on a lousy meal, a disappointing film, or in going to watch my football team lose, nobody says I have "lost" the money, yet if I choose gambling as my form of entertainment it is said that I have "lost", rather than "spent" the money.
Opponents of increased diversity of gambling options tend to argue, as one critic did, that "those of us who have the good of the nation at heart feel there are sufficient facilities for gambling already." It sounds like a quote from an anti-gambling activist today, but is in fact from Rev Gordon Powell in 1948. He was opposing an increase in the number of trots meetings in Melbourne.
The argument that there are already enough venues for gambling is a bit akin to those who do not drink coffee thinking that there are already enough coffee shops in many trendy inner urban shopping streets. The difference is that non-coffee drinkers rarely have the same patronising and superior mindset as elements of the non-gamblers.
Of course, much of the anti-pokies rhetoric places a large proportion of the blame on state governments, which are allegedly so beholden to taxation on gambling. This line of argument formed part of the Howard Government attack on the states and Prime Minister, Kevin Rudd has also criticised state Labor governments for relying too heavily on the revenue.
Considering that gambling taxes make up a bit over 3 per cent of state revenue for gambling as a whole, or 2 per cent for gaming machines, it is hardly undue reliance, when compared to property and payroll taxes. Of course, an easy way to reduce their "reliance" would be by the states cutting the rates of gambling taxes, but I am not sure if this obvious way of reducing "reliance" is what the gambling critics have in mind. Ensuring punters get back a higher percentage of their turnover would seem a laudable aim, especially as gambling taxes tend to be regressive, but not apparently to the anti-gambling zealots.
This view that state governments have some sort of vested interest in promoting gambling has contributed to the trend of all levels of government feeling the urge to play a role in gambling policy.
At the federal level, the most obvious manifestation of this is the Productivity Commission's Gambling Inquiry. The Commission's 1999 report has provided the basis for many of the subsequent debates and arguments about gambling in this country. At last count, the Commission's current Inquiry had received 252 submissions and it is pleasing to see so many sensible ones. Anyone wanting to see some of the key arguments should look at the submissions from RSL & Services Clubs, Clubs Australia and the IPA. It is also good to see so many submissions from individual clubs, highlighting what they contribute to their local communities, both in economic and social terms.
Key elements of the debate will no doubt continue to relate to the prevalence of problem gamblers and the percentage of gambling "losses" which come from problem gamblers. All reputable studies are showing a downward trend in the prevalence of problem gambling and hopefully the Productivity Commission will recognise this and put an end to some of the more exaggerated claims of the anti-gambling lobby.
Even if we accept, for the time being, the 1999 figure on the prevalence of problem gambling, it still means that 98 per cent of those who gamble in Australia are not problem gamblers. It seems unfair to impose unnecessarily onerous restrictions on such an overwhelming majority to protect the minority, especially if there is minimal evidence that the restrictions will actually help the problem gamblers.
One current such proposal, banning ATMs in gambling facilities, would cause significant inconvenience to users, not just of gaming facilities, but of all other food and entertainment within venues. As so many in the industry have pointed out, is it really a good idea to send patrons out of the secure location of a club or hotel, down to an ATM at a bank in a deserted main street?
It is also important to continually rebut some of the more exaggerated claims of the opponents of gambling. One of their most commonly cited claims relates to the impact on families. Interestingly, a 2006 Relationships Australia survey placed gambling 22nd of 24 possible factors "negatively influencing relationship with partner", with a score of just 3 per cent. Six times as many people had relationship problems due to disputes over housework and three times as many complained about the "influence of in laws". So while pokie critics stress about poker machine spin rates, perhaps they could do more good if they worried about in-law visitation rates.
As well as the Commonwealth involvement, local government has also begun interfering with gambling. In some jurisdictions state governments have given local government the power to object to new developments which include poker machines, but rather than using this power with discretion, some councillors in municipalities such as Logan in SE Queensland are trying to ban new pokies all together.
Not to be outdone, the mayor of Moreland Council, in the northern suburbs of Melbourne, recently proposed doubling the rates paid by gaming venues in his municipality. Singling out pokies leaves many other businesses paying rates at the standard level in Moreland, businesses such as brothels, tattoo parlours, tobacconists and pawn shops, all of whom at least some citizens might consider to be as socially damaging as the local pokies venue.
As the President of the Waverley RSL in Victoria so eloquently commented in his club's newsletter last year:
It is unfortunate that many in the community (particularly in local government) do not have an understanding of the crucial role that RSL sub-branches play in the service of volunteer hours and support to the aged and needy within their communities.
Another unfortunate aspect of the debate about gaming being focused solely on issues of problem gambling is that it has crowded out debate about very important topics, such as the new industry structure in Victoria from 2012, the impact that internet-based gambling will have on all traditional forms of gambling, and the preferential treatment of casinos.
Nobody denies that there is a risk attached to gambling, and that gambling addiction has caused significant problems for individuals and families. The gaming industry, with clubs at the forefront, has implemented significant measures over the past decade to reduce the risk of harm.
As with almost any other human activity, gambling will always carry a risk but, in a healthy democratic society, the assessment of risk is something that is best left to adult individuals, rather than the state. Ultimately, the right of individuals to spend their own money as they choose, including on gambling, is fundamental to a free, open society.