Recently, the Grattan Institute produced a report that called for a complete ban on gambling ads. The report, “A Better Bet: How Australia Should Prevent Gambling Harm”, outlines the financial loss of gamblers in figures and gives recommendations on what the government should do. So, if you haven't seen it, keep reading for more details.
Context
Grattan Institute is an Australian public policy think tank. According to them, Australia has one of the highest gambling losses because the government has let the gambling industry run wild. The government has taken "a tax approach to regulating gambling." Moreover, past reforms have failed to work due to "well-funded, coordinated attacks by vested interests."
Report in numbers
Australia has one of the highest gambling loss rates compared to the United States and New Zealand. The average Australian who gambled in 2022 lost an average of $1,635. This is more than double that in the US, with around $809, and triple New Zealand, with approximately $584.
The report indicates that Australians suffered a total loss of $24 billion to gambling between 2020 and 2021. EGMs were responsible for half of that figure. Casinos and lotteries contributed an extra $6 billion through betting. It also states that there's one physical pokie machine for every 132 Australian citizens. It means that this analysis does not include the online pokies in Australia for real money, which are more than physical machines.
The institute believes that most gambling machines in Australia are high-risk and designed to attract heavy spenders. According to debit card data, only 5% of gamblers contribute over 70% of gambling expenditures.
The report further states that the number of gambling machines on the city outskirts far exceeds the number of public washrooms, ATMs, and post boxes. The implication is that the poorest communities suffer more in terms of gambling losses.
Recommendations
Grattan Institute recommends the following measures to save the public from gambling-related harm:
The institute suggested a complete ban on any form of gambling advertisement. This would help prevent more people from being lured into gambling. The institute requested that the Federal parliament implement the multi-party consensus forwarded by the Murphy inquiry. The comprehensive ban should be implemented in several phases spread over a three-year period.
The institute also recommended that loss limit ceilings be introduced to reduce losses for those who aren't ready to quit gambling. These limits would include how much one can spend on pokies and would cap how much a player can lose daily, monthly, or per year.
The report advocated for a mandatory pre-commitment system to be put in place. This would ensure that pokies in every state have daily, monthly, and annual limits on how much players can lose.
Lastly, it recommended that the government reduce the number of pokies in each state.
Total ban, not a partial ban?
The "gamble responsibly" disclaimer at the end of gambling adverts may seem like a viable solution, but it might be ineffective. You see, gambling advertisements have completely overshadowed the limited number of anti-gambling campaigns in the country. Besides, pokies are readily available for all legal-age players.
Grattan Institute says that partial bans implemented in the past haven't been successful in combating gambling addiction. An excellent example is the partial ban on sports advertising introduced in 2018. This was followed by an exponential increase in gambling ads that aired on TV.
Uproar Over the Total Ban on Gambling Ads
As expected, gambling operators and ad agencies came out to oppose the blanket ban on gambling ads. They based their argument on the assumption that clubs and media associations rely heavily on gambling ad revenue.
The anti-ban campaigners led by Responsible Wagering Australia's CEO Kai Cantwell argue that the public should have more alternatives, including age-verification requirements and opt-out provisions. He further noted that total banning would have counter effects. It would leave a loophole that illegal offshore providers can exploit. This would further expose vulnerable individuals to predatory advertising by these unregulated providers.
Cantwell argued that the Australian government would lose billions of dollars in revenue because illegal operators don't pay taxes. Licensed operators contribute significant tax revenue, which contributes to better education, healthcare, and infrastructure.
Peter V'landys (the Rugby League Commission chair) and Andrew Dillon (AFL chief executive) echoed Cantwell's statements about the need for a better solution instead of a total ban on gambling adverts. According to them, the ban would adversely affect grassroots sports because millions of dollars generated through gambling revenue would be lost.
Moreover, media companies, including Seven West Media, News Corp (NASDAQ:NWSA), and Nine Entertainment, warn that the ban could lead to job losses and jeopardize their production capacity.
Looking ahead
The Australian gambling industry has one of the highest gambling rates and higher loss limits in comparison to the United States and New Zealand. Over the past week, the Grattan Institute has intensified calls for a total gambling advertising ban to mitigate the situation.
However, the anti-ban proponents want the government to ignore the Grattan Institute’s report and impose a partial ban instead. In that case, policymakers must strike the perfect balance between safeguarding the safety of vulnerable players and ensuring gambling continues to generate revenue for the Australian government.