International Recap - Australian Pokies

International Recap: Pokies in Australia

The New South Wales state election (on March 25, 2023) may have significant implications on how they will address gambling harm from pokies (that is gaming machines not in casinos) in their state, both inside and outside their borders.

Let’s set the scene.

Prior to 1956, all forms of gambling were illegal in New South Wales (NSW). However, in that year, the state government passed the Gaming and Betting Act, which legalised the operation of poker machines, or "pokies," in registered clubs and hotels.

The government hoped that by legalising and regulating pokies, they could better control the industry and prevent criminal elements from profiting from it. The introduction of pokies in NSW was initially controversial, with some groups arguing that it would lead to increased problem gambling and social harm.

Fast forward almost 70 years and the fears of the critics have come to pass:

“In much of the world, electronic slot machines are confined largely to casinos…But in Australia, pokies, as the machines are called here, are everywhere. They’re in thousands of hotels and pubs, in big cities and small towns...

Australia is home to less than half a percent of the world’s population but has 20 percent of its pokies — and 80 percent of those located outside casinos.

The result is a nation with the world’s worst average gambling losses: About $1,000 per adult each year. Opponents of gambling say pokies fuel suicides, domestic violence, insolvencies and financial crimes.”

Meanwhile the proliferation of pokies in NSW has created a powerful political powerhouse: ClubsNSW, the body representing around 1000 clubs and trusts that operate pokies in the state, who according to a documentary by ABC show Four Corners “possess incredible political reach and even deeper pockets”, and have been compared to the firearms lobby groups in the United States.

Each state and territory have their own rules on pokies, with Western Australia (WA) being the only state with no machines permitted outside of the state’s only licensed casino. If WA is at one end of the spectrum of pokie proliferation, then NSW is certainly at the other end.

From the Sydney Morning Herald:

“Poker machines have reached such saturation levels in NSW that gamblers are now losing more than $7 billion on them each year – vastly more than the amounts lost to betting on racing, sports and other events.”

Various organisations have called for meaningful reform, in the lead up to the state election on March 25 including a cashless gaming card, midnight closing hours and a statewide self-exclusion register.

Even one of the state’s largest unions supports an introduction of cashless gaming, even if they are seen to be on the opposite side of the ideological spectrum with the currently conservative leaning state government.

What is the NSW Government doing?

In December 2021, the NSW Crime Commission launched an investigation into money laundering at licensed premises within the state. Their final report in October 2022 included 28 recommendations, including the mandatory introduction of cashless gaming machines in the state, implemented over several years.

In defending the report, NSW Crime Commissioner Michael Barnes says pubs and clubs can no longer plead ignorance to dealing in the proceeds of crime if they continue to draw revenue from criminals.

What is cashless gaming?

Cashless gaming involves the use of non-cash gaming tokens for land-based gambling. It would mean a person preloading a set amount of money before using a pokie machine and they can be combined with limits on how much can be loaded or spent in a given time, a system known as pre-commitment.

An effective pre-commitment system according to the Australian Gambling Research Centre: “needs to be universal and available across jurisdictions, and with limits that are binding.”

The Victorian Responsible Gambling Foundation has said that the combination of cashless gambling and pre-commitment together is “…a significant step towards giving people greater control over their gambling.”

What happened next?

The state government announced that it would implement all of the recommendations from the Commission’s report. Chief Advocate of the Alliance for Gambling Reform, Tim Costello, welcomed the changes:

“It isn’t perfect, but it is pretty damn good,” he told reporters, adding that he would continue to work with the government on introducing a loss limit for gamblers.”

The proposed changes met a lukewarm response from ClubsNSW. They had attempted to introduce a revised code of practice for operators, in addition to completing the introduction of a facial recognition system at venues in an effort to persuade the government not to proceed with any changes.

The lobby group has indicated their concern on the impact of cashless gaming, suggesting a drop in revenue in 30% and a reduction in their community contributions of $26 million AUD.

A poll around the time of the announcement shows that 63 per cent of voters back a cashless card for poker machines, with just 16 per cent opposed to any changes.

From the SMH:

“The head of Australia’s biggest poker machine operator has played down the risk of cashless gambling reform to its portfolio of more than 300 bistros and 900 bars across Australia, saying the recent regulatory changes were a natural evolution of the industry.”

Why is this an election issue?

The current opposition party has not joined the government in supporting their proposed approach, for instance in a column in the Australian Financial Review:

“ALP Opposition Leader Chris Minns has refused to offer bipartisan support for these much-needed reforms or to criticise the aggressive lobbying campaign that the gambling industry is conducting. Instead, Minns is backing the ClubsNSW proposal for voluntary trials.”

In fact, the Labor party’s election policy on pokies shows that they have agreed to some of the recommendations, especially around prohibiting donations by pokie trusts and clubs to political candidates.

Nevertheless, key Independent, Greens and teal Macquarie Street-hopefuls have all said transitioning to mandatory cashless gaming on NSW poker machines would be central to securing their vote in a minority government.

Here is a summary of measures (produced by the current state government) and the contrast in support

Current polling shows a close race, with Labor slightly ahead. If there is a change in government, it could mean the derailment of the current government’s plans on pokies, especially on cashless gaming.

How about the rest of Australia?

Other states are paying attention. In the adjacent state of Victoria, City of Hume Mayor Joseph Haweil, has led a campaign of seven like-minded councils calling on Premier Daniel Andrews to act.

Earlier this year the Premier has since flagged that he is open to gaming reform and the introduction of cashless cards, though there has been no substantive policy announcement yet.

Nevertheless, public pressure is building, including an editorial in The Age:

“Until Victoria implements mandatory cashless cards, loss limits and maximum bet sizes – or another proven remedy – there is no safety net for the vulnerable in the gambling abyss.”

Meanwhile Chief advocate for the Alliance for Gambling Reform, Tim Costello, says “the tide will turn, it will come to Queensland”.

Independent MP Andrew Wilkie (and prominent pokie reformer) has said “If we can get deep reform in New South Wales, then I’m in no doubt that that reform will roll out across the whole country…if we get reform there, we’ve cracked the nut”.

Why does this matter in New Zealand?

Any major change to rules for gambling in Australia will be monitored by policymakers in New Zealand, as gambling regulators from around the world watch what other jurisdictions are doing to reduce the harm from gambling.