3.1 Introduction
3.1.1 The Commonwealth Government’s role in relation to gambling
The regulation of gambling has traditionally been a state and territory responsibility. However the Commonwealth is seen to have a leadership role in coordinating a national response to problem gambling. The Commonwealth also has a direct responsibility in relation to the use of the Internet for gambling, a rapidly expanding industry.
The Commonwealth response to problem gambling is co-ordinated through the Department of Family and Community Services (FACS). Their role includes working with other Commonwealth Departments and Agencies to:
- develop partnerships with state and territory governments, the gambling industry, and community groups to facilitate a coordinated response to gambling issues;
- increase priority given to the prevention and treatment of problem gambling within the Commonwealth's programs;
- develop measures to inform and assist groups with special needs in regards to gambling issues, such as youth, Aboriginal and Torres Strait Islanders, and people from culturally diverse backgrounds;
- monitor the social consequences of banning interactive gambling; and
- foster research and public awareness on gambling. 3
3.2 Gambling in Australia
As at 30 June 2000, the expenditure in the Australian gambling industry (including racing, all forms of gaming and sports betting) totalled $13.3 billion.4 The greatest contributor was gaming machines, contributing approximately 57% of total expenditure5.
The flow on effects of this expenditure is that the industry is a significant contributor to state revenue and employment. The Australian Bureau of Statistics estimates that 220,000 Australians are either directly or indirectly employed in the gambling industry by approximately 11,000 businesses6.
In 1998, the Productivity Commission was asked to undertake the first national independent inquiry into the economic and social impacts of the gambling industries, and the effects of the different regulatory structures that surround those industries. The final report of this inquiry, Australia’s Gambling Industries was released in December 1999.
The report found that over 7,000 industries provide gaming services in Australia with the majority of business located in New South Wales, Victoria and Queensland. The Productivity Commission estimates that the value added from gambling is approximately 1.5% of gross domestic product with over 40% of income derived in clubs. In 1997-1998, gambling businesses generated $11 billion in net takings and $650 million in commissions, of which over 50% was generated from gaming machines in clubs, pubs, taverns and bars7.
Problem gambling has become a major social concern in Australia. Although the majority of Australians who gamble do so in a responsible manner, a small percentage (approximately 2% of the Australian adult population) has problems with gambling or is ‘at risk’. Whilst this is a relatively small percentage of the population, there is a ‘multiplier effect’ with an additional 5 to 10 persons adversely affected by a problem gambler’s actions8.
3.2.1 Definition of problem gambling
Problem gambling as defined within the Productivity Commission report is a condition that contributes to:
- the loss of self-control over gambling/gaming behaviour, such as the frequency of gambling, and the value wagered; and/or
- a pattern of gambling behaviour that negatively affects other important areas of one’s life.9
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3.2.2 Characteristics of problem gambling
One characteristic of problem gambling is the loss of control over gambling, especially over the scope and frequency of gambling, the level of wagering, the amount of leisure time devoted to gambling, and the negative consequences deriving from this loss of control.10 Problem gambling can also be defined as any pattern of gambling behavior that negatively affects other important areas of an individual’s life, such as relationships, finances or employment. The mental disorder of ‘pathological’ gambling is seen to lie at one end of a broad continuum of problem gambling behaviour.11
There are a number of features widely recognised as characteristics of problem gambling, although not all of these aspects have to be present in a person who is regarded as having problem gambling behaviour. They include:
- Personal and psychological characteristics such as difficulties in controlling expenditure, anxiety, depression or guilt over gambling, thoughts of suicide or attempted suicides; use of gambling as an escape from boredom, stress or depression; thinking about gambling for much of the time; and giving up formerly important social or recreational activities in order to gamble.
- Gambling behaviours, such as chasing losses, spending more time or money on gambling than intended and making repeated but failed attempts to stop gambling.
- Interpersonal problems, such as gambling-related arguments with family members, friends and work colleagues; relationship breakdown, or lack of time with the family.
- Job and study problems, such as poor work performance, lost time at work or studying, and resignation or termination due to gambling.
- Financial effects, such as large debts, unpaid borrowings, and financial hardships for the individual or family members (either in the present, in the case of high gambling commitments out of current earnings, or in the future, in the case of assets that are liquidated to finance gambling)
- Legal problems, such as misappropriation of money, passing bad cheques, and criminal behaviour due to gambling. In severe cases, these may result in court cases and prison sentences.12
The Productivity Commission Report13 identified that there may be causal links that can lead to a dependence on legal gambling. The Productivity Commission report also identified that the gambling environment plays a major role in causing problem gambling. The following factors were identified as examples:
- as gambling opportunities become more accessible, this allows an impulsive person much greater opportunity to gamble;
- some gambling forms such as gaming machines involve repetitive, but random rewards for further play – which conditions behaviour in some people to gamble persistently; and
- the gambling environment, including the promotional activity of the industry, may compound (or at least, not negate) certain erroneous beliefs that gamblers have about winning.
Control of the gambling environment including restriction of access to funds via ATMs and EFTPOS in the gambling environment was identified in the Productivity Commission report as being one of a range of measures to address the gambling problem.
3.2.3 Commonwealth response to problem gambling
The challenge for all governments in Australia is to find a response that balances the right of individual Australians to gamble, the interests of industry,14 and the responsibilities of governments for overall community welfare.
One of the key recommendations of the Productivity Commission report was the establishment of Ministerial Council on Gambling. The National Advisory Body on Gambling was subsequently convened to advise the Commonwealth on issues related to gambling. The aim of both groups is to achieve a national approach to the challenge of problem gambling and the negative social impacts for the Australian community.
In the 2001-02 Budget the Commonwealth announced the allocation of $8.4m to be used to develop national public awareness and education campaigns on gambling issues and to support problem gambling related research projects.
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3.2.3.1 Ministerial Council on Gambling
The Ministerial Council on Gambling includes all state and territory Ministers responsible for gaming regulation. The Commonwealth Minister for Family and Community Services is the Chair of the Council, and a representative from the Community and Disability Services Ministers' Conference is also a member.
To achieve its objective of addressing the negative impacts of problem gambling across all States and Territories, the Ministerial Council on Gambling focuses on:
- the accessibility of gambling (including interactive gambling) and in particular its relationship to the level of problem gambling;
- an appropriate regulatory and educative framework for gambling which includes appropriate consumer protection; and
- support for problem gamblers (with the acceptance of problem gambling as an important social issue and recognition of the important role of information, counselling and support services for problem gamblers and those close to them)<15
The Ministerial Council has identified key areas for national research including:
- national approach to definitions of problem gambling and consistent data collection;
- feasibility and consequences of changes to gaming machine operation;
- best approaches to early intervention and prevention to avoid problem gambling;
- longitudinal study of problem gamblers to identify what policy measures would work for them; and
- benchmarks and on-going monitoring studies to measure the impact and effectiveness of strategies introduced to reduce the extent and impact of problem gambling, including studies of services that exist to assist problem gamblers and how effective these services are.
Research is managed through the newly established Australian Gambling Research Secretariat.16
3.2.3.2 National Advisory Body on Gambling
The National Advisory Body on Gambling brings together community, industry and academic representatives to develop a balanced approach and inform the Commonwealth Minister for Family and Community Services on gambling issues. This advisory body is currently drafting a National Harm Minimisation Strategy on Problem Gambling, and is expected to outline the best focus for new research, harm minimisation measures, appropriate areas for community education and public awareness, and possible areas for Commonwealth intervention.17
3.3 Social and community service obligations of the financial sector
The concept of social responsibility for the financial sector is not new. Many financial institutions are active in, and supportive of community based initiatives and have been for many years. In addition responsible management of credit facilities and services has been one part of the management of financial institutions in Australia.
In recent times the financial sector has engaged with government with regard to the concepts of mutual obligation and social responsibility. Capacity to respond to problem gambling is not seen by the financial sector to be solely a government responsibility. To date, much of the attention and focus of strategies to tackle problem gambling have been in the arena of education, communication and social and health services. This focus is now broadening to consider the role of the financial sector and the potential role that it can play in responding to problem gambling issues.
3.3.1 The Productivity Commission Report
One of the key themes of the Productivity Commission report was for an increased role for consumer protection in the gambling environment, specifically:
- Informed consent - an increase in the exposure of gamblers to basic information regarding the price and nature of gambling and the potential for ‘excessive consumption’; and
- Consumer control - incorporating spending controls and pre-commitments18
The Productivity Commission National Gambling Survey ‘found that problem gamblers were more likely than non-problem players to withdraw money from an ATM at a venue whilst playing the pokies’.19
Consequently, the Commission suggested that limiting the access to ATMs and credit was a high priority as a consumer protection measure as part of a package of responsible gambling and harm minimisation prevention measures.
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3.4 Regulatory environment
State and territory gambling and gaming regulators have commenced a period of review within their individual jurisdictions with the view to:
- slowing the proliferation of gambling, particularly gaming machines;
- increasing the focus on gambling related harm minimisation;
- clarifying the responsibilities associated with gaming/gambling by the individual in licensed gaming venues and other industry stakeholders; and
- maximising the social and economic benefits of gambling while minimising the potential harm and costs to individuals, their families and the wider community.
To achieve the above broad objectives state and territory governments (and the associated regulators) have undertaken reviews of policy and regulations with respect to gambling and gaming and as a result, most states have implemented, or are considering implementing, harm minimisation strategies.
One of the harm minimisation strategies adopted by all states and territories, in one form or another, is the restriction of ATM and EFTPOS facilities in gaming machine areas within licensed gaming venues (hotels, clubs and casinos).
3.5 Industry overview
The following sections capture the results of the desktop and primary research. It aims to highlight the key research findings, issues and impacts across the key areas of interest. This includes the:
- regulatory environment;
- gaming/gambling sector;
- community sector; and
- the financial services sector.
At the completion of the sections we have drawn together the key themes from the research, consultations and subsequent analysis providing some comment and conclusions.