the “crack cocaine” of gambling

Pokies make mega-profits out of misery
By Paul Benedek

“Poker machine playing is a repetitive and insidious form of gambling which has many undesirable features. It requires no thought, no skill or social contact. The odds are never about winning … the machines … are addictive to many people. Historically poker machines have been banned … in the public interest, they should stay banned.”

This quote is not from independent MP Andrew Wilkie, or “No Pokies” Nick Xenophon.

It is from the 1974 Royal Commission into Gambling, Western Australia.

Almost four decades ago, WA took far more stringent poker machine reform measures than those scuttled by the Gillard government in breaking its deal with Wilkie. Apart from one casino, WA remains poker machine free.

In contrast, the rest of Australia has more than 200,000 pokies — 21% of all gambling machines on the planet. More than half Australia’s machines are in New South Wales, where there is a poker machine for every 70 people.

Poker machines are a $12 billion annual business in Australia — and the house always wins.

Yet there are huge costs to a pokies-saturated society.

For 2.3% of Australian adults, gambling is an uncontrollable addiction that affects their personal, social and financial life. Three-quarters of those with a gambling problem have issues with pokies — the “crack cocaine” of gambling.

For each sufferer, 10 others — family, friends, workmates — are affected, meaning about 2 million Australians are impacted by problem gambling.

A gambling addict’s life revolves around the next “fix”, and the pokies industry is very obliging. Like with drugs, users need larger or more frequent wagers to get the same “rush”.

Wilkie's reforms targeted high-intensity machines, which allow gamblers to lose up to $15,000 in an hour.

Pokies are designed to be addictive. Sound and images entice users, and free games and bonus levels attract and hold gamblers. Users can even play over 3000 combinations with each “spin” using “multiple ways”, creating the illusion of increased chances while maximising the machine’s profit.

Such design feeds off addicts’ compulsion to “chase” losses – encouraging the false idea that if a gambler goes on long enough they will get the big payout that can cover previous losses.

Addicts don’t just punt their money – they risk their homes, jobs, personal relationships and health. They often lie to family and friends to cover up their problem, and in serious cases turn to crime to feed the addiction.

It costs lives. A 2010 study in an Australian hospital found that 17% of suicidal patients admitted were problem gamblers.

But for pokies industry lobby group Clubs Australia, addicts are not “problem gamblers”, but an important part of their billion-dollar takings.

Sixty percent of pokie revenue comes from people who have a gambling problem or are at risk, the Productivity Commission's 2010 gambling inquiry found.

Clubs Australia won’t give up this lucrative majority of their business – despite these profits flowing from depression, despair, family breakdown, job and housing losses, and suicide.

Clubs Australia waged a $20 million advertising drive that called the proposed reforms “un-Australian” and harmful to community organisations it supports.

Yet Clubs Australia admits that just 2.7% of the billions made from poker machines reaches community organisations and charities.

Meanwhile, the costs from the hugely anti-social, addictive industry are estimated at $4.7 billion a year.

Gillard can’t be accused of bowing to public opinion on pokies – all polls indicate overwhelming support for Wilkie’s reforms.

A May 2011 Australian National University survey found that 70% think gambling in Australia should be more tightly controlled, and 75% believe people should nominate how much they’ll spend before gambling. Most believe there are too many opportunities for gambling and it should be discouraged.

An Australia Institute national survey found 81% of Australians agreed that punters should be allowed to set limits on how much they bet.

Even an internet survey conducted by the Coalition’s Malcolm Turnbull found 57% support mandatory pre-commitment and 67% support for $1 bet limits.

Support for the reforms was even higher among Labor voters. And opposition to the reforms actually fell after the Clubs' ad campaign.

So just who is profiting from the unfettered pokies industry?

The largest Australian operator of pokies is Woolworths, which owns about 13,500 machines. The “fresh food people” are also taking food off the table.

Crikey’s Stephen Mayne revealed other interests tied into the pokies industry, such as the Canberra Labor Club, which profits from 500 machines; Jeff Kennett, chair of mental health organisation Beyond Blue, who is a paid director of pokies supplier Amtek; and Australia’s biggest newspaper publishers, News Ltd, which profits from pokies at club venues with its 50% ownership of the National Rugby League.

While the profiteers from pokies may be small in number, they are big in corporate, political and media influence. And they have 12 billion reasons to stick with the status quo.

Unable to refute the harm from poker machines, the industry echoes big tobacco’s mantra of “we need more evidence”.

Meanwhile, homes, relationships and lives are lost.

The Wilkie reforms could have been a first step to undermining the carnage from poker machines. Other solutions could include a ban on gambling advertising (like smoking ads), rather than constant promotions urging us to punt on every aspect of sports and beyond.

Social resources need to be provided for the elderly and others preyed on by the industry. In many communities, the local club — chock full of addictive pokies — is the only place to socialise.

But before change can occur, the corporate power of the pokies industry must be broken. The pokies lobby will put mega-profits, made out of human misery, ahead of even the most minor reforms.

Community power — from churches to trade unions — needs to mobilise against industry pressure.

Such a harmful industry shouldn’t remain in private hands. It should be nationalised, brought into public hands to determine its future. The public can discuss the urgent steps needed to end the pokies scourge.

Ultimately, pokies are “perfect capitalism”. While selling the lie that “everyone can win”, it is a mug’s game for the 99%, while the 1% clean up.

Like capitalism, the odds are stacked, billions flow from the poor to the rich, victims are hooked through advertising, and pokies operate 24 hours a day, 365 days a year.

It’s time to end the madness of the rampant pokies industry and challenge the profits-before-everything system that underpins it.