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Home In-depth New South Wales Plans Gambling Reform Ahead of Elections

New South Wales Plans Gambling Reform Ahead of Elections

ANALYSES 27 Feb 2023
6 min. read

The popularity of gambling activities has been continuously growing in the last two decades. But while many countries offer different forms of gambling, one jurisdiction stands out with the highest gambling losses per capita - Australia. Billions are lost to gambling in the country every year and the activity is so widely spread that the country has become infamous for offering casinos on every corner.

Billions are lost to the one-armed bandits annually

Poker machines or pokie machines, otherwise known as slots in the rest of the world are widely spread in Australia. Currently, the infamous pokie machines are available in different locations such as casinos, as well as sports and social pubs and clubs. The regulation itself is in the hands of the lawmakers in each state, designating a regulatory framework that somewhat resembles the one in the United States.

What's worrying is the number of pokie machines. The gambling regulation on a country level in Australia allows 200,000 pokie machines. Although the number of machines has been declining slightly in recent years, there are approximately 185,000 pokie machines in the country. This result instantly positions the country in the top place with the highest gambling losses per capita.

In fact, a report released by the Jerusalem Post confirmed the staggering range of the losses to gambling annually. The report cited data from H2 Gambling Capital, the gambling industry's leading market data and intelligence company, revealing that the annual losses to gambling for an average Australian are nearly AU$1,200 ($807). This is a frightening result, considering that the number is double what an average gambler in the United States loses to gambling per annum.

The impact of gambling on different states

A report released by the Victorian Responsible Gambling Foundation late last month revealed data from the Victorian Gambling and Casino Control Commission, pointing out that for the first half of the 2022-23 financial year, residents in Victoria lost more than half a billion. In total, the losses to gambling between July 1 and December 31, 2022, were a staggering AU$1.58bn.

Similarly grim picture is revealed by research from Western Sydney University. A recent white paper released by the University probes into New South Wales' (NSW) gambling activities, alarming a worrying trend about what is identified as a "gambling epidemic in Western Sydney." The study explains it uncovered that Western Sydney has only 52% of the population, but it is responsible for 63% of the electronic gambling machine losses.

What's more, the new report details that three local government areas in Western Sydney: Fairfield, Canterbury-Bankstown and Cumberland, account for one third of the losses to gambling in Sydney, although they hold only 17% of the population. "The prevalence of these machines in VIP Rooms and Dragons Dens across the region is a critical enabler of the high rates of gambling-related harm across the region, compounding the layers of vulnerability that exists within communities," reads the report titled "Paying the Price."

The wind of change: revamp of the gambling regulation

There are different methods that can help reduce the negative impact of gambling in Australia. An overhaul of the gambling regulations that includes stricter rules is one way to tackle the problem. But as with many regulated gambling markets, tough restrictions always raise the fear of customers shifting to illegal or black market operators. Such a move deprives the gamblers of any protection and at the same time, puts their money at risk. Illegal operators are also infamous for not offering fair conditions or in some severe cases, rejecting to pay out big prizes.

Last month, Anthony Albanese, Australia's Prime Minister, spoke against a nationwide reform of the gambling sector, the Australian Financial Review reported. At the time, he explained that the regulation of pokie machines is in the hands of lawmakers in different jurisdictions. "It's a matter for the NSW government to deal with," said Albanese, who also acknowledged that problem gambling is a concern. Still, the Prime Minister said: "But the regulation of these issues is a matter for the states and territories, and it varies across the states and territories."

Albanese's announcement came at a time when NSW lawmakers showed support for proposals that seek to curb problem gambling and reduce gambling harm. One such proposal is the implementation of a cashless gaming card. Supporters of the legislative change in NSW claimed that the proposal can fight against financial crimes such as money laundering and terrorism financing, while at the same time, contributing positively to the fight against problem gambling.

The cashless gaming card proposal comes ahead of the NSW state election in March. It is likely that this helped increase the support for the proposal from different parties. Media reports revealed that NSW Labor leader, Chris Minns, confirmed that his party will support the cashless gaming card option, given that they win the upcoming election.

Still, per Minns' plan, this won't be a complete overhaul but rather a trial of the cashless gaming card for one year, planned to start in July. Overall, the trial is expected to involve at least 500 pokies in NSW. Besides the cashless card trial, NSW Labor confirmed plans for decreasing deposit limits, given that they win the upcoming election. Despite the planned support, the opposition claimed that a trial for a limited period and not involving all pokies likely won't be effective.

Besides the cashless gaming card, both NSW Labor and the Liberal Party NSW confirmed their support for facial recognition technology (FRT) as a part of their proposed reform of the sector. FRT is a contemporary technology that is widely spread within the gambling sector. Leveraging FRT enables casinos to screen their visitors and ensure that no unauthorized individuals can access the gaming floors. In fact, FRT helps gambling venues ensure that no self-excluded person can gamble.

Without any doubt, the overhaul of the gambling sector in NSW is long overdue. While the competing parties have voiced their support for the revamp of the sector, much is at stake given the upcoming elections. As with any legislative change, regardless of who wins the election, the overhaul of the sector will likely be a long-term process, considering that lawmakers would need to consult with the stakeholders and in some cases, push for changes in the existing regulations which inevitably takes time. Still, the changes remain in the hands of the NSW lawmakers.

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27 Feb 2023
6 min. read
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