Gambling should be regulated as a drug of addiction

Victorian Premier Daniel Andrews’ partial undoing of Joan Kirner’s terrible decision in 1991 to legalise poker machines is excellent work … and courageous given Victoria’s parlous finances, so parlous that he had to cancel the Commonwealth Games.

Kirner legalised them to help fix her own parlous finances by taxing the hordes who were schlepping up to the Murray to play pokies on the other side of the border. New South Wales legalised them in 1956, 35 years before Victoria, and I grew up wondering why our neighbours and relatives were going to Echuca so often.

So the pressure is now on NSW Premier Chris Minns to decide whether to follow Victoria with $100 limits, shorter hours and slower machines, or just stand back and tell the clubs in Moama and Tocumwal to get ready for Victorians again.

The latest episode of Australia’s pokies farce simply highlights one of the fundamental problems with gambling in this country – the constitution. It’s not specifically listed in it, so the states retain legislative powers over it.

Commonwealth powers

Actually, that must be rubbish, since gambling is run by “foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth”, as listed in the constitution are among the things over which the Commonwealth does have legislative power.

It seems the states run gambling because the Commonwealth lets them – to raise some of their own revenue.

The recent report into online gambling harm from the House of Representatives Standing Committee on Social Policy and Legal Affairs devoted the first few of its recommendations to the need for a national approach. Recommendation No.1 is that “responsibility for online gambling harm reduction is held by a single Australian Government Minister”.

But when it comes to recommending a national strategy, with a national regulator administering national regulations, in recommendations two and three, the committee suggests it should be “with the co-operation of the states and territories”.

That is too high a bar: They’re trying to stand between a premier and a bag of money, something Paul Keating advised against.

Most of the states are especially desperate for cash after the pandemic and without the revenue from gambling, about which those paying it are largely oblivious, they would have to raise other taxes that would be noticed.

National legislation

The Commonwealth can and should do it without the co-operation of the states and territories using corporation power.

Apart from anything else, online gambling means that distance is no longer an issue – most Australians unwittingly gamble in the Northern Territory without leaving their bedrooms, because of the low licence fees and light regulation there.

And no driving to Echuca.

The national legislation should include all gambling, not just online; poker machines in clubs and hotels across the country, as well as casinos and horse racing.

Gambling should be treated not as an industry, but as a drug of addiction that must be controlled because it’s too late to outlaw it.

The states, and in particular the Northern Territory, tend to look at it as an industry that contributes employment and prosperity and should be encouraged.

Some people can control their use of cocaine and ecstasy, and just have fun with it, but that doesn’t stop those things being banned because of those who can’t. Likewise, some people can control how much they hand over to bookies, apparently while having fun, but many people can’t and get ruined.

A predatory system

Gambling can’t be banned, of course, but as Financial Counselling Australia (FCA) wrote in its submission to the Murphy committee inquiry: “The legislation needs to be re-written with a harm prevention and prevention of crime … remit”.

This is not an industry, but rather a predatory system designed to relieve citizens of as much of their money as possible, as efficiently as possible, while sharing the loot with the state.

Recommendation 16 from the parliamentary committee’s report is short, but pivotal: “The committee recommends that the Australian government prohibit all online gambling inducements and inducement advertising, and that it do so without delay.”

All of the online gambling firms have “affiliates”, who are either individuals or companies paid trailing commissions to induce people to gamble, a bit like a pyramid scheme or Tupperware parties, or the trailing commissions that financial planners used to get and were banned.

Highly motivated drug dealers

The trailing commissions – I kid you not – range from 25 to 50 per cent of the prey’s gambling losses, for the rest of their life.

These affiliates are highly motivated drug dealers.

As discussed in this column a fortnight ago, punters should get real-time information about their losses and the ability to set their own limits.

The national regulator should also get the same data. In its submission, FCA calls this a “data vault”, pointing out that Spain, Denmark and France have mandated that every bet must be logged through the regulator’s data vault portal in real time so they can keep an eye on what’s going on.

Poker machines are all digital so they could be part of the data vault as well, with each user having to log on with their name and ID.

All advertising should be banned, which the committee recommended should happen over three years, and there should be mandatory deposit caps, like the new Victorian cap on pokies.

Loss-reduction targets

And there should be a national loss-reduction target written into the legislation, like the carbon emissions reduction targets of 43 per cent by 2030 and net zero by 2050 that are in the Climate Change Act 2022.

Those targets are going to be hard to achieve, maybe impossible, but because they’re legislated, the minister Chris Bowen can’t just go with “best endeavours” – he must deliver, and explain why if he can’t.

Australia’s gambling losses total $50 billion a year, easily the highest in the world per capita.

The new federal minister for gambling harm reduction should have a legislated target to which that number must be reduced.

Alan Kohler is founder of Eureka Report and finance presenter on ABC news. He writes twice a week for The New Daily


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