Online Gaming - Is there a Problem?
Australia has always been a nation of gamblers. If two flies were crawling up a wall, Australians would bet on which fly would get to the top first. Traditions like two-up and the Melbourne Cup have enshrined gambling as part of our culture and for many people buying a lotto ticket every week isn't going to break the bank.
To a large extent this sort of activity is enjoyable and fairly harmless. Indeed the average gambler in Australia loses about $600 a year and that is neither here nor there. But we do have a growing number of problem gamblers who on average, according to a Productivity Commission report in 1999, lose about $12,000 a year. These are peopie who are often from poorer socio-economic groups and the effects are
quite devastating.
Unfortunately the regulation of gambling throughout our history has failed to combat this growing tide of problem gamblers. Australia already has around 300,000 problem gamblers. That is equivalent to a city the size of Canberra. if you add to that the people who are directly affected in some negative way, particularly family members, workmates, bosses or victims of crime, the number of people affected goes from 300,000 to 2 million. We're now talking about a population equivalent to Adelaide plus Perth. So that is the scale of the problem that we are facing.
Now with a new form of gambling set to completely overtake the current favourite of poker
machines, Australia should be the last place to lead the world charge into online gambling.
Online gambling should be banned. One only needs to look back at the history of the accessibility and the regulation of various forms of gambling, which provide enough evidence to warrant such a move. No matter how carefully new forms of gambling have been regulated upon their introduction, the history of poker machines, the TAB and casinos shows that overtime gambling regulations always get watered down because governments and business are always looking for ways to increase their revenues.
So you start with a high level of regulation and over about 20 years, history shows all of those tight regulations are freed up. it has happened before and it will happen again, even if we allow highly regulated online gambling in Australia to begin.
History has a lot to teach us about the unravelling of gambling regulation over time. Poker machines were introduced and legalised in the 1950's, after they were found in police raids on private clubs. Slot machines, as they were called at the time, were illegal so state governments reversed this to stop the problem of underground gambling. Over the years state governments have gradually liberalized the regulation. Now 50 years down the track, Australia has one-fifth of the world's total number of poker machines. NSW in fact has one-tenth of the world's pokies and yet only has one-one thousandth of the world's population. We are punching 100 times above our weight.
In the early 60's there was already a real concern about the social effects poker machines were having. The solution was to limit the amount that people can actually put into a machine. So 20-cent pokies were abolished. This regulation didn't last long and today there are many poker machines that accept $100 notes.
In 1995 the NSW Government approved the spread of poker machines from clubs into pubs.
The effect this has had is enormous. Since 1995, national gambling expenditure rose from
$7.6 billion to $11 billion in a four year period, according Productivity Commission. Since 1995 the incidence of female problem gamblers has risen dramatically. Figures from the Department of Gaming and Racing show that residents in NSW lost $3.2 billion on poker
machines in the 12 months ending in June 1999.
In fact poker machines are a sorry example of the exponential rise that increased accessibility and decreased regulation of gambling services has on community financial losses and State Government revenue gains.
Another example of gambling regulatory failure is the TAB's. This was highlighted by Tim
Costello's and Royce Miller's book "Wanna Bet". They say that when the TAB first started in the 1960's, regulations prohibited seating, promotions, drinks and aided broadcasts. it was intended to take illegal bookmaking off the streets and help reduce crime, as well as an opportunity for state and territory governments to get their hands on extra tax revenue.
When they first started, TAB's looked like post offices and certainly weren't near a pub or club. Costello likes to use the term ‘slippage' where once the TAB was legalised, there was a sanitising effect and arguments arose that it should be allowed to advertise. But no one questions this move. No one seemed to remember that the condition of making the TAB legal was that it couldn't be advertised.
Costello and Miller go on to say that there is a problem with the way that the legislation was introduced, in 1982 a bill passed through the Victorian government during a late night sitting, which no one debated. The MP's didn't even notice the change. The bill to move TAB's into pubs wasn't even questioned. No one asked why the already strict rules on TAB's were being removed.
Costello and Miller finishes the argument by saying that it ended up being a case of unintended consequences that once the TAB was legalised, privatised and then expanded, the incidence of problem gambling also grew.
Welcome the world of marketing. When the Victorian Government decided to privatise TAB's the result was felt across the country. Over the years, seating, broadcasts and promotions have all made their way into the familiar green TAB betting shops that can be found on most Australian towns and suburbs and more recently in pubs.
The current situation with TAB's, in pubs in particular, is a far cry from the tight regulatory system established in the 1960's. State and territory governments have allowed this slippage because they have become addicted to gambling revenue and have allowed gambling facilities to become increasingly available over the last 50 years.
As a result of increased access we have a major challenge with problem gambling in this country. On the one side you have state and territory govemments who want a revenue maker and gambling fits that role. On the other side you have big business who want profits for the industry. This is a perfect fit, a symbiotic relationship, as both groups have a vested financial interest in a booming gambling industry.
The situation today is that Australians have access to so many forms of gambling that a
question needs to be raised as to whether we need yet another form of access. People can buy scratchies, lotto tickets, make a bet on the horses at the TAB or the racecourse, bet on one of the dogs over the phone, put some coins into the pokies or go to one of the casinos.
We are so saturated by gambling services that for the first time, the public is standing up and saying no more. A Productivity Commission survey found that 70% of Australians believed that gambling did more harm than good and 92% of people did not want to see the further expansion of gaming machines.
In the last few years the media have picked up on the ugly side of gambling with shocking
photos and footage of how low this addiction can take people. The news that parents have
actually locked their children in cars so they could go and feed their gambling addiction has rocked the notion of a harmless punt. Problem gambling is so serious that some estimate the cost of bankruptcies, counselling services, divorce costs and legal cost runs into the billions.
The Break-Even Western Problem Gambling Service estimates that a problem gambler affects between 7 and 10 people. This includes, wives, husbands, children, employers, employees and creditors. The Productivity Commission estimates that the cost could be as high as $5 billion per year. Despite this social cost and the growing public support for no more gambling services, a new form of gambling has arrived that could subsume all of those before it. its name is online gambling.
The potential of online gambling is enormous and raises again the problem created by
accessibility, it has the potential to turn every home in Australia into a virtual casino. Forget having to go out of your house to play casino type games or poker machines.
With online gambling you could have 24 hours access to betting in the comforts of your
own home. A recent report by the Office of information Economy found that the growth of online gambling has the potential for negative social consequences due to its increased accessibility.
What could be more accessible than a 24-hour casino in your living room?
I saw the potential of this scenario in the United Kingdom three years ago. What people may not understand is that you don't actually need a computer or digital TV. All you need is a normal TV and a smart set top box on top of the television. People can set up themselves up with this technology for less than $1,000. This enables you to a have split screen. On two-thirds of the screen you will see a normal television picture. On the other third, it looks very much like a computer screen where you have a number of options to choose from with the click of a button. Here's where you can place your bets.
The developers of gambling services are constantly dreaming up new ways of betting on the
net. One possible deadly form is point betting. Imagine it's the final of the Davis Cup and Lleyton Hewitt is serving at the start of match. As the match goes along viewers are inundated with statistics, such as the percentage of aces for each player. It's from here that a gambling bonanza could begin. Viewers might be able to bet on virtually any part of the match. Will he serve an ace? Will he fault? Will his opponent hit a forehand winner in return?
With online gambling, you could place a bet on the outcome of the game or point by point.
You could lose your house in an aftemoon doing that. This sort of betting puts together Australia's three great loves — gambling, watching television and sport. Given Australia's adrenalin rush when it comes to their homegrown athletes competing on the world stage, thankfully this technology was not in place during the Sydney Olympic Games. You can imagine the computer overload when Cathy Freeman walked onto the track for the 400 metres final.
There are already about 800 to 1,000 online gambling sites on the internet that people have access to worldwide and the various predictions on how far reaching and how much this
industry could be worth is astounding. Frank Feather, the author of FutureConsumer.com
estimated at the Global interactive Gaming Summit and Expo in Canada, that the online
gambling industry could be worth $90 billion worldwide by the end of this decade.
It's no wonder big business is calling on the Federal Govemment to drop any plans to ban the new service. They want a slice of the pie. They want the profits. But what is not being considered are the social costs and the responsibility that the Australian Government should have on this issue.
Figures are already starting to come in from the United States on the effect that online
gambling is having, it is something that Australia must take note of. The American Psychiatric Association estimates that the number of Americans gambling on the net will rise from 4 million to 15 million in the next three years.
The Association has sent out a waming that young people will be the most susceptible to this form of gambling. This group uses the internet more than anyone else and they also have access to credit cards.The Association has found that many online video and board game sites that children play actually have links to gambling websites and advertise their services. They have found that 10 to 1 501o of young people surveyed have significant gambling problems and 1 to 60/0 are pathological gamblers.
Although there are some sections in the community who are in denial about the extent to which problem gambling is in fact a problem, the Federal Government is taking this issue seriously. Legislation has been introduced that will effectively ban online gambling for Australians. it is a move that I have been calling for, for well over a year now.
With only a relatively small number of online gambling sites in existence, banning online gambling by Australia is possible. The legislation will place the onus on gambling
service providers to determine whether users are physically placed in Australia and if they are, to prevent them from accessing the gambling site. The process will not result in
any reduction of intemet performance.
What is important is that this regime will not place any obligation on intemet service providers to filter or block prohibited interactive gambling sites. This legislation will not apply to Australian online gambling service providers offering their services overseas. The Govemment's view on this is that it is up to each country how they will approach online gambling. The aim of the legislation is to prevent online gambling from
worsening the already problem gambling numbers we have in this country. The Government is not saying you can never have a bet. But we are saying that enough is enough.
Australians already have access to more gambling services that we can possibly dream of. A
ban is needed for online gambling because just regulating online gambling will not curb a
new breed of problem gambler who is young and mesmerized by the computer screen. increasing the accessibility of gambling has always lead to an increase in the number of gamblers and problem gamblers.
Of course, there will be some people who will be able to find a way around this regime,
particularly to the 900 offshore sites. If they choose to gamble with mafia.com or other
dubious sites, people may well lose their money. it is hard enough to win on regulated sites. Waiting for your winnings cheque to arrive from the Caribbean could be a great dissuader.
The important point is that we won't give up. Governments have an obligation to try and
eliminate or at the very least to push harmful pursuits to the fringes of our society. Not to invite them into our living rooms to be part of mainstream activities.Online gambling is a very powerful and highly accessible technology, it has the potential to subsume all known forms of gambling and create many more mutations.
Given the inability of regulating systems to control the expansion of gambling in Australia over the last 50 years, a country with the world's worst problem gambling situation should be the last place to be rolling out the red carpet for online gambling.
The above report in full, from Senator John Tierney.
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