Australia Has a Serious Gambling Problem

November 18, 2016; Publisher: ; Format:

Australia tops its fair share of lists, including hosting the deadliest animals on earth and, perhaps paradoxically, some of the world’s most liveable cities. But the country also tops the charts on an indicator that is far more insidious: gambling losses. Last year, Australians lost $17.5 billion, or about $949 per adult. These per capita losses are among the highest in the world.

How did Australia get into this mess? It is the outcome of a symbiosis between a hugely profitable industry and pliant governments.

Half of Australians’ losses were on slot or video gambling machines, a grossly outsize proportion compared with other countries. Video gambling machines are good at making money because they are designed to be addictive. They have been called the “crack cocaine of gambling,” and Australia is hooked.

From the music and graphics to the math behind each spin, every feature is the result of the enormous resources dedicated to ensure that the machine extracts the maximum amount of money from the gambler. It is highly effective: Experts estimate that around 60 percent of losses on video gambling machines in Australia come from problem gamblers and that some 600,000 people use gambling machines at least weekly.

The documentary “Ka-Ching! Pokie Nation” features an interview with a man known as the “Wizard of Odds” whose job is to do the math that goes into these machines. “I have such pity for the people who play them,” he laments. “I know what an awful bet they are because I designed hundreds of these games.”

The industry profits, vampirelike, from the misery of the poor. Large gambling venues are particularly concentrated in economically depressed neighborhoods. These places present a dystopian vision of cultural life. It is easy to get lost among the carpeted rows of glittering machines and soft melodies. There is a palpable loneliness to this form of entertainment, even compared with other forms of gambling.

The way problem gamblers talk about their plight gives a small insight into their desolation and the wider context of social dysfunction. They use these machines to chase losses, but they also crave what they call “the zone”: the endlessly spinning reels where the world and its problems can be forgotten. If you have ever mindlessly scrolled through social media when you are supposed to be doing something else, you get the idea.

Customers at poker machines at the Vikings Club in Canberra, Australia.CreditMark Graham/Bloomberg
For gamblers, it is not always the sense of chance that is attractive but the predictability of the game that underpins the escapism. Even winning disrupts this state of dissociation. “The point is to stay in a zone,” writes the anthropologist Natasha Schüll in her comprehensive examination of these machines, “Addiction by Design.” Professor Schüll explains, “Their aim is not to win but simply to continue.”

State and federal governments in Australia have been captured by the industry’s highly organized and well-resourced lobbying campaign. The main advocates for the industry is a large donor to both major political parties. The federal government is currently pushing for regulation of online gambling, but video gambling machines always somehow elude reform efforts. The outcome is that government effectively rubber-stamps a huge volume of machines that generate high-intensity losses. According to a 2013 report, the state of New South Wales has more gambling machines than any other state in the world outside of Nevada. Gamblers in New South Wales rack up some $4.4 billion in losses annually.

Why don’t state governments uphold their duty to the public and properly regulate the industry? Because they rake in billions of dollars a year in taxes from the video gambling machine industry. Last year alone, taxes on gambling brought in $3.65 billion for state governments across the country. Caught in the cycle of short-term electoral politics, they fill their coffers, heedless of the extra spending that will be necessary later on to manage the fallout from gambling.

The social costs are enormous: bankruptcy, homelessness, suicide, domestic violence and countless other stories, all miserable in their own way. Video gambling machines have a similar addictive effect and destructive impact on lives and families as drugs do. A recent report from the state of Victoria found gambling to be a social issue of comparable magnitude to major depressive disorder or alcohol misuse. Yet those who profit from them have none of the stigma of drug dealers.

The industry pushes the hoary line that problem gambling is about “individual responsibility” and claim people should use will power to avoid gambling to excess. But this is a con. This sleight of hand may soothe the conscience of industry leaders and policy makers, but it distracts us from what is needed to address the problem.

The focus should not be on banning video gambling machines but on harm minimization. There are steps that can be taken to make these machines less dangerous. Currently, bettors can lose 1,200 Australian dollars (about $889) in most parts of Australia on these machines. Imposing a universal one Australian dollar maximum bet on each spin, for example, together with other alterations to the average time between spins, could limit losses to 120 Australian dollars per hour. This simple and cheap reform, proposed for years by reform groups and by the federal government’s Productivity Commission, has yet to be taken up.

The con may soon be over. In October, Maurice Blackburn, an Australian law firm where I have worked, filed a suit that could be transformative. The firm is suing a Melbourne casino and a gambling machine manufacturer, alleging that they have breached the law by making these machines misleading and deceptive to consumers by rigging them to give gamblers the impression that they have better odds of winning than they really do. The case is designed to attack the very features that manufacturers have spent so long perfecting.

The Australian public is ready for change. With any luck, our courts are, too. This is the kind of case where a well-aimed challenge to a predatory industry with the support of activists and advocates may finally succeed where governments have failed. The odds may finally be changing for the gambling industry in Australia.

Originally published in the New York Times: