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Dynamic Duo

Fierce gaming opponents in Australia have limited the growth and could actually shrink the industry.

Dynamic Duo

Australia has long been the world leader in per-capita gaming spend. The most recent figures show that every Australian adult spends at least US,300 annually on gaming. The country far outdistances the U.S. customer, who spends a little more than 0 on gambling, while in the U.K., it’s just over 0. (Singapore posts a figure of ,150, but only 30 percent of the market there are citizens or permanent residents, so it doesn’t really apply.)

As a result of this high per-capita spend, there has risen up in Australia a large group of anti-gaming proponents who contend that casinos and clubs are corrupting the society and are seeking to end gaming as they know it Down Under.

Academics have established a cottage industry creating studies funded by the federal and state governments that find all kinds of wrongdoing by the gaming industry using methods that are somewhat less than peer-reviewed. But because the movement is led by elected officials, it has become a serious problem for the industry.

The most visible gaming opponent has been Senator Nick Xenophon, who represents South Australia in the federal Senate. He began his career attacking the machines in his state, where he was elected to the legislature. He later moved it to the federal level. Xenophon’s party, No Pokies, is built on his fierce opposition to the machines so available to Aussie punters. As the leader of a small minority party, Xenophon has often held the balance of power, and this will certainly be the case starting in July as the Greens hold power in the Australian legislature.

Xenophon has been the driving force behind several studies by the federal Productivity Commission that examined the spread of gaming in Australia. The recommendations of that panel have led to several restrictive measures, including installing controls on slot machines that limit time on device, betting levels and money spent—known as “harm minimization measures.” Recent proposals will actually remove thousands of machines from the social clubs and hotels (but not the casinos) that depend on them for their survival.

Tasmanian Devil

The election of Australian Prime Minister Julia Gillard was a tenuous one, resting upon the support of several minority parties and independent politicians. One of those independent members of Parliament was Tasmania’s Andrew Wilkie. He threw his support behind Gillard on the condition she support one of his pet projects, limiting the level of bets at the pokies and having the federal government “pre-committing” the players.

The federal government wants the system to be mandatory for all. The industry wants usage to be left up to the individual.

Weighing in are anti-gaming forces, who want to combat what they see as an alarming rate of compulsive gambling, and state governments, which want to maintain control of gaming within their borders and the tax revenues to which they have become accustomed.

It’s all business as usual when it comes to any change in the status quo of gaming regulation. But the need to win is inciting increasing aggression from all involved.

Mandatory pre-commitment is the main issue for Wilkie, who has claimed to be the target of death threats and blackmail attempts by the industry.

Clubs Australia President Anthony Ball, who is running a heavy media campaign against mandatory pre-commitment, feels Wilkie is blaming his organization for the alleged campaign.

“Obviously, he’s pointing the finger at Clubs Australia and the AHA,” Ball told Australian news organization ABC. “We’re the ones who are running this campaign, but if he’s issued a death threat, he should go straight to the police, and I’m happy to cooperate. I mean, that’s the way to deal with it, not to basically throw a rock at us.”

State vs. Federal

The attempts by Xenophon and Wilkie to establish federal controls on gaming in Australia have opened up the door to questions about states’ rights in the country.

The state government of Victoria is objecting to any interference at the federal level with gaming regulations, which are generally managed by the individual state. Victoria’s gaming minister, Michael O’Brien, told the Sunday Age that the decision on whether or not to pre-commit to a loss limit when playing a slot machine should be left to the individual.

O’Brien called the plan “the type of Big Brother, nanny-state policy that many Australians will instinctively reject.”

But Federal Families Minister Jenny Macklin has said that the federal government would be going forward with the pre-commitment plan as part of a deal to lock in the support of Wilkie. She said the Gillard government would use the commonwealth tax powers to override the state and make the plan mandatory.

According to the Sydney Morning Herald, such a move could end up costing the state governments more than A$500 million in tax revenue.

O’Brien told ABC, “The regulation of gambling, the treatment of problem gambling is far too important to be used as a political plaything by the commonwealth government in order to be able to shore up their numbers. It seems that the Gillard government is just very keen to pick and choose its issues in order to placate Mr. Wilkie, rather than actually looking at what are the policy measures that are best placed to try to seriously treat problem gambling.”

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.