Barriers and enablers to policy action: Gambling Related Harm in NSW

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By Andrew Reid and Dr Amy Bestman

In March this year, poker machines across Australia were switched off due to COVID-19. This was the first time since 1956 that poker machines were not operating in this country. However, as restrictions around pub and club closures have eased, experts have raised concerns about the harm that may occur.

Australians spend more on gambling per person, than any other nation in the world. With losses of $12 billion per year (or $1500 per person), venue closures have resulted in significant savings. However, in New South Wales (NSW), $91.6 million was lost through poker machines, one week after venues had reopened in June. This was a 31% increase in poker machine losses in hotels from the previous year and more than the average weekly income for NSW Clubs compared to the same time last year.

While we are waiting on data to see the full impact of this on the NSW population, consistent with what we know about poker machine use in Australia,  these losses are highly likely to come from those from low socio-economic areas. This is particularly the case for groups more likely to experience gambling-related harm, including ethnic groups, youth, those with substance abuse or misuse issues, and those with poor mental health, who are living or working in the Fairfield Local Government Area (LGA). 2018-2019 figures revealed Fairfield LGA had the highest per capita gaming machine profits for clubs and hotels combined in Greater Sydney ($2,447)(see Figure 1).


Figure 1: LGAs in Greater Sydney with highest per capita gaming machine net profits in clubs and hotels ($), 2018-19

Source: Liquor and Gaming NSW, note 16; and ABS.STAT, Estimated Resident Population by LGA (ASGS 2018)

One legitimate strategy to address this issue is to adopt and implement a public health  approach. In the case of NSW, this requires some action for policy change.

Barriers

Gambling tax revenue

In 2018-19, the NSW government received close to $2.5 billion in tax revenue from gambling. This was an increase of $105 million from the previous year. Recent NSW Treasury figures indicate over the next 10 years, $85 billion will be lost on NSW poker machines, and the government will collect $22.5 billion in gaming machine tax. In 2017-18, the gambling tax made up some 8% of the overall state revenue. Despite the significant community harm from poker machines, the increasing reliance on this lucrative revenue stream has made it difficult for policy change.

Industry pressure

Domestic experience up to now shows the gambling industry has an increasing amount of power to prevent, reverse, or influence policy change if it does not serve their interests. This is enacted in many forms, including intense lobbying and providing consistent and substantial financial donations to policymakers. Between 1998 to 2018, available data reveals the gambling industry donated a total of $7.7 million to political parties (see figure 2). As a result, despite some sweeping reforms in 2018, NSW’s gambling policy remains oriented towards the industry-friendly concept of ‘responsible gambling’ instead of addressing public health determinants such as the addictive nature of these machines, industry marketing and promotion practices.

Figure 2: Total declared donations for the Tasmanian and NSW branches of the AHA, ClubsNSW, Crown Resorts, and Federal Group

Source:  Australian Electoral Commission, 2019

Enablers

Common goal

The NSW government and others share a commitment to reducing gambling-related harm, including breaking the disadvantage cycle. The disadvantage cycle refers to the transmission of disadvantage from one generation to the next or situations where one source of disadvantage causes another, compounding the effect. Evidence shows having a common goal around the action for change makes it politically palatable and increases the likelihood of policy change. This is because it removes competition, creates, and strengthens unity among stakeholders. In this environment, it is arguably easier to amend existing government policy. What is now needed is to reduce the number of available poker machines through strengthening existing legislation introduced in NSW, by increasing limits on the number of machines in specific geographic areas. Current measures mean that areas such as Fairfield LGA with high levels of poker machines and gambling-related harm, are not permitted to have any further Poker machines licences. Extending these measures to additional high-density NSW areas will be important in reducing community harms.

Engaging and building partnerships

Research studies have found that engaging and building relationships with a wide range of stakeholders facilitates policy change. As a result of this process, stakeholders gain a better understanding of the issue, are more readily able to identify policy options, tailor existing measures according to the current political environment, and assess the chances of policy success there and then. Examples of this occurring in NSW can be seen in Fairfield with the Fairfield Community Action Group on Gambling Harm, and in Western Sydney with the Western Sydney Community Forum. However, more engagement and relationship building needs to occur for increased support for policy change. 

Well thought-out solutions

Research indicates that policy change is more likely to occur when potential solutions are clearly costed and show how they will reduce gambling harm. For reducing gambling harm, coordinated, evidence-based, and evaluated multifaceted approaches that recognise multiple contributing factors, are needed. These include issues such as gambling products, accessibility, nature and conduct of venues, environmental and social aspects. Moreover, acknowledgement is needed that gambling-related harm is not an issue of personal responsibility, but a shared one among individuals, community groups, businesses, and governments at all levels. 

Conclusion

Gambling harm is a global issue. However, “Australia is a world leader in gambling losses”. The majority of those losses come from poker machines. NSW has around half of the country’s poker machines, and its clubs and pubs generate over $6 billion a year through individual’s poker machine losses. Despite COVID-19, not much has changed in NSW. Gambling profits and losses continue to rise. More research is needed to examine the full impact of this on the NSW population. However, existing evidence suggests already vulnerable groups from low socio-economic areas are likely to be most affected. To effectively reduce gambling harm in NSW, a public health approach to problem gambling is necessary. Policies and solutions must go beyond  ‘personal responsibility’. At present, policy change barriers include increasing reliance on gambling tax for state revenue and the gambling industry’s growing influence in the policy process. People’s well-being must always come before profits. To increase the likelihood of policy change, stakeholders must continue to work towards a common goal; engage further to build an extensive network for support; and implement well-thought-out solutions.  

Authors’ information

Andrew Reid is a Research Officer at The Centre for Health Equity Training Research and Evaluation (CHETRE).

Dr Amy Bestman is a Research Fellow, in the Injury Division at The George Institute for Global Health Australia.