Australia: How to Help Problem Gamblers

Written by:
Greg Tingle
Published on:
Jun/01/2011

Australia is home to a $19 billion gambling industry and no one is certain exactly how much of it is above board and what chunk is hidden. One thing is for sure - the industry is thriving, thanks to Australia's once again "winning" the title of world's biggest gamblers... if you believe the reports and hype. One may speculate that the late, great, Kerry Packer would have liked the accolade put on Australian punters, but on with the story.

Political fun and games - the politics of gambling is all the rage for Australia's much loved (satire) politicians and they maneuver around the chess board, all looking for a golden cheque mate to suit their agenda.

Mandatory limits on the affectionately known 'one armed bandits' (pokies) are the talk of the town, followed by chit chat re banning of betting odds during sporting events.

A talk fest in the nations capital of Canberra (US equivalent is Washington)... god help us hey...on Friday between the Commonwealth and the states produced unanimous agreement on the need to slow promotion of live betting during games of football, cricket and other major sports.

It will be interesting to see if any other areas of gambling, like the web and horse racing, will be targeted, but already some media reports state the FBI has contacted the Australian Federal Police to probe online casino and online poker websites. A few problems exist on that front... most of the sites are hosted in Canada, the U.S, Gibraltar or Malta, and don't target Australians - they in fact target the world, enjoying a global audience, with many sites just offering games as one of their dozens of offerings, preferring to also cover the celebrity sector, financials, technology, tourism, politics and more.

So the stakes are high and most of the Australian public loves a punt, so how does a radical politician get support. That's a key problem for the Gillard government.

It's apparent that the long-term forecast for gambling stocks is as risky as the sector it's in. One reason why firms like Media Man choose to making gambling only one business vertical they cover, with a continued move into broader entertainment, business, politics and lifestyle.

Regulation is understood to be costing gambling businesses money, but some outfits like Bwin.Party Digital Entertainment welcome the regulation, due it part because they came to financial and legal terms with the U.S government, are the world's most successful igaming company, and enjoy strong political relationships in most parts of the world. They are have deals locked down with Hollywood's Marvel Entertainment, Paramount Pictures, Infinity Ward, StudioCanal mainstream game co IGT and even Sinatra Enterprises! There's even a Rambo and Terminator game, but we're not sure what political clout Arnie and Stallone will bring to the table at the moment. Internet game players like the strong brands with the Hollywood connection, and the World Poker Tour tie in, broadcast on Australian TV, and innovative offers like Live Dealer have the Australian punting public on side, at least at this stage of the game.

Aussie political fun and games dived to a new level circa 2009 when the then Victorian government pole-axed the industry by announcing the Tabcorp-Tatts duopoly in Victoria - where they each ran 13,750 poker machines - would end in 2012.

The government flat out refused compensation, which Tabcorp argued was in excess of $650 million, despite legal eagle threats from both Tatts and Tabcorp. The firm has written off the value of this licence but said it did not rule out litigation.

Tabcorp shareholders get the chance to vote next week to split the company into two listed entities. It is expected to go smoothly as investors hope that it will lure a bidder (a corporate "super whale" is the word) for one or both of the operations. What happens with the proposed pre-commitment legislation is anyones guess.

According to reports obtained, the poker machine reforms proposed by independent federal MP Andrew Wilkie would rip $280 million or so from the takings of casino operators, mainly Tabcorp and Melbourne based Crown, in the first year of operation.

Tabcorp and Crown have committed to spending almost $3 billion upgrading their land casino facilities, with massive upgrades to the accommodation, entertainment, gaming and overall facilities on the way. New Lear jets were even purchased to keep high rolling VIP whales satisfied. Tabcorp is throwing about $900 million its Star City casino in 'Sin City' Sydney and 'Our James' (James Packer) is spending more than $2 billion bucks boosting his Melbourne and Perth casino digs.

The decision by the Gillard government to reform poker machine gambling by making it mandatory for players to set "pre-commitments" on how much they are prepared to lose, appears based on political survival, not a solid policy on problem gambling. They same kind of approach to tackle problem gambling has already failed in a list of countries including Sweden, so don't expect the Gillard government to be attending a Sweeden based igaming conference anytime soon.

Under the terms of Wilkie's agreement to continue to back the Gillard government, it was given until May 31 to shore up an agreement on pre-commitment with the states to try to curb problem gambling. Now it's looking like a complete failure, it must now overrule the states and legislate unilaterally by May 2012 to impose it. If not, Wilkie will withdraw his support. Hey, we told you it was political fun and games.

The states voted against supporting the proposal, largely for their own political reasons, and also because they stand to lose hundreds of millions of dollars in taxes, plus the massive potential loss of jobs in support industries such as food and tourism, tied to gambling in clubs and casinos.

Gillard is also facing some negative from some of her own backbenchers and key independent MPs who are under pressure from local clubs and sporting organisations.

Pre-commitment requires gamblers to sign up to a system that, at a nominated limit, shuts off their ability to play pokies, at least the way they intended... hard and fast, ala high intensity, that's what one might do on the Cleopatra.

Wilkie has proposed a hybrid system that would make pre-commitment mandatory for high-impact machines but exempt low-impact ones and give small clubs time to adjust.

And in any hung parliament, the independents, Tony Windsor and Rob Oakeshott, will play a pivotal role in the outcome of any deal. If jobs will be lost in electorates as a result of clubs going out of business, Windsor and Oakeshott will have the power to push for the legislation to be watered down, thus clubs with less than 15 poker machines are exempt, which implies problem gamblers won't go to smaller clubs, which makes the mind boggle.

In the meantime online gambling powers along. A recent report from Monash University estimates that Australians spend more than $300 million annually on online poker. Online casino games, especially slots like Cleo, Sinatra and Marvel slots from the likes of bwin.party enjoy a massive following. 

A proposed merger on Friday between British online gambler Sportingbet and Centrebet for $185 million, this space will only get bigger, and Bwin.Party Digital Entertainment, Virgin Games, PKR and others are watching the space closely.

It's the political battle of the year, perhaps decade, as the coalition  - Liberal Labour look to take down the Gillard's Labour, with a few Indi's and Greens in the mix, just to further complicate and aggravate things. WrestleMania Aussie casino style is on the way punters.

Many Australian media and commentators continue to call Australia's the biggest gamblers in the world. Hope the Aussies are still taking the title as a compliment.

Friends, good punting, know your limits and bet with your head, not over it.

Punters, er readers, stay glued to Media Man http://www.mediamanint.com and Gambling911 reports for more "can't miss" information on Australian pokies, gaming and casino wars.

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. They cover a dozen industry sectors including gaming.

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