Most Extensive Yet Gambling Benefit/Harm Report

Granite State Coalition
Against Expanded Gambling
NoSlots.com

Warning: wonky. If short on time, read only the Summary Conclusion.

Summary Conclusion:


By the mid-1990s, casinos and slot machines had become pervasive in Australia. The Australian government has collected and evaluated good quality data about the impacts. Gambling - particularly video slot machines - cost Australian society more than the benefits derived. Seeing the impacts on their own communities, 80 percent of Australians have concluded that current gambling is harmful to their communities and want slot machines removed or reduced in numbers.

New Hampshire policymakers must soberly and dispassionately consider whether these same slot machines would somehow have different impacts here. The Australian impact would translate to a cost of $210 million dollars per year in New Hampshire.


Background:

Gambling, and specifically "pokies" or video slot machines became pervasive across almost the entire Australian nation by 1995. In both 1999 and again in 2008, the Australian government charged its Productivity Commission with assessing benefits and harms of gambling. On October 21, the Commission released its 630 page draft report.

This report is by far the most comprehensive I've yet seen.

"The Productivity Commission is the Australian Government's independent research and advisory body on a range of economic, social and environmental issues affecting the welfare of Australians. Its role, expressed most simply, is to help governments make better policies, in the long term interest of the Australian community."

Community backlash against slot machines caused Switzerland to ban slot machines outside of casinos in 2005. Widespread concerns about gamblers loosing their life savings and becoming destitute caused Russia to ban all gambling in 2009, other than in four highly remote regions. Due to increased problem gambling, Norway banned all video slot machines in 2007 and Internet gambling in 2009. The Norwegian gambling authority is implementing "less aggressive" (i.e., slow play, low maximum loss rate) gambling machines in smaller numbers than the banned slots.

Specific Harm Findings:

The Productivity Commission found gambling to cost Australian society about $4.5 billion dollars per year, with over 75 percent of these costs deriving from video slot machines. These costs exceed benefits when abused dollars (or "excess" losses) by problem gamblers are included (page 3.22). Cost per year per adult translates to US$225 for all adults in the population.

Video slot machines, rather than other forms of gambling such as lottery or table games, "account for around 75-80 per cent of 'problem gamblers' and are found to pose significant problems for ordinary consumers." (xxiii)

42 to 75 percent of total machine losses are paid by moderate and high risk problem gamblers. (4.1)

About 2.5 percent of Australian adults are now problem gamblers. (4.23)

"[M]any people who do not fit the strict criteria for problem gambling are found to experience significant harms. For example, of those people who said that gambling had affected their job performance, some 60 per cent were not categorised as 'problem gamblers.'" (xxiv)

Slot machines are between 6 and 18 times more risky than lotteries (4.31).

"[A]round 50 per cent of gaming machine gamblers have false beliefs about how gaming machines work, which pose risks to them" (4.1). "Faulty cognition" about slot machine design is strongly associated with problem gambling. 33 percent of high-risk problem gamblers, 20 percent of moderate risk, and 5 percent of recreational gamblers believe that a gambler is more likely to win on a slot machine after loosing many times in a row (4.11). Some groups of consumers - such as people with intellectual or mental health disabilities, poor English skills, and those who are emotionally fragile (say due to grief) - may be particularly vulnerable to problems when gambling (3.9). Slot machine profits and tax proceeds therefrom are predatory on weak and vulnerable members of the population.

Thirty-nine percent of high risk problem gamblers suffered adverse effects on workplace performance, an often ignored or unquantified externality. (4.21)

"Beyond the powerful example provided by the early liberalisation experiences of Australia, there is a broad range of evidence suggesting a link between accessibility [proximity] and harm." (10.3)

Australian gamblers are estimated to lose A$790 million per year (about 4 percent of the size of legal gambling) from illegal online gambling and Internet casinos. (12.1)

The effect of widespread gambling machine availability on the economy can be seen in Australia, where gambling losses are now 3.1 percent of household consumption, 6.3 percent in Northern Australia (page 2.3).

"The potential for significant harm from some types of gambling is what distinguishes gambling from most other enjoyable recreational activities - and underlines the communities' ambivalence towards it" (xx). "While many Australians gamble, they remain sceptical about the overall community benefits (figure 3.2). For instance, one survey estimated that around 80 per cent of Victorian adults considered that gambling had done more harm than good (with little difference between the views of gamblers and non-gamblers)" (3.8). Looking at all Australian surveys, roughly 80 percent of the public wants to see video slot machines removed or their numbers reduced (10.9).

Treatment:

Eight to 15 percent of Australian problem gamblers seek treatment. "Internationally, around 6-15 per cent of people experiencing problems with gambling are reported to seek help from problem gambling services" (5.3). "People experiencing problems with their gambling often do not seek professional help until a 'crisis' occurs - financial ruin, relationship break down, court charges or attempted suicide - or when they hit 'rock bottom'. (5.4)

"Help services for problem gamblers [using them] have worked well overall, but they relate to people who have already developed major problems and are thus not a substitute for preventative measures." (xv)

Harm Reduction:

60 percent of Australian teens gamble on video slot machines by the time they are 18 years of age. Over 60 percent of Aussie teens have gambled in some form before they reached 18 years. (6.23)

"[I]ncreased knowledge of gambling in children may have the unintended consequence of intensifying harmful behaviour, a risk that should be considered in the design (or even in considering the introduction) of school-based programs. Nevertheless, several insights emerge from the drug, alcohol and driver education literature that may increase the effectiveness of any school-based gambling education programs and potentially reduce the risks of adverse behavioural responses: a school-based education program may be more effective if accompanied by a corresponding change in societal attitudes and a media campaign. For instance, ... the relatively greater success of school-based tobacco programs (compared with alcohol) [is attributed] to the fact that these were accompanied by 'consistent anti-smoking messages in the general media and to the emergence of a strong anti-smoking social movement.'" (6.20)

If New Hampshire were to legalize slot machine gambling - even with a school-based anti-gambling education campaign - but without a strong anti-gambling social movement and media campaign (completely unlikely if the state were to operate or license casinos, and unlikely if the state were to become significantly dependent upon casino revenues), New Hampshire could experience Australian levels of teen gambling. Teen gambling in the U.S. is associated with sharply increased teen criminal activity and illegal drug use.

"Had there been full knowledge at the time about the harmful effects of substantially increasing accessibility to gaming machines in the 1990s, a different model of liberalisation, with less widespread accessibility, may well have been seen as appropriate. (Western Australia did not follow the approach of other jurisdictions and appears to have far fewer gambling problems.) However, it would obviously be difficult and impractical for any government now to significantly reverse longstanding arrangements." (xxxii)

Given that the Productivity Commission deems it impossible to put the slots genie back in the bottle, its recommendations focus on harm reduction, for example, mandating machine designs that reduce gambler losses per hour to 1/10th those of present slot machines and implementing a $1 per button push bet limit.

New Hampshire's policy options are now far more favorable than Australia's: whether to let the slots genie out of the bottle, i.e., harm reduction through the far more effective route of prevention.

Better a fence at the top of the cliff than the world's best ambulance at the bottom.











Granite State Coalition Against Expanded Gambling PO Box 3931 Concord NH 03302