Productivity Commission Final Report
The Productivity Commission's final report was released on 23 June 2010. See our earlier article Productivity Commission Draft Report for additional information about BetSafe and our contribution to the Productivity Commission report.
What BetSafe Said
BetSafe made 2 submissions to the Productivity Commission (numbers 93 & 345) explaining the BetSafe Program and highlighting a number of BetSafe's responsible gambling measures including BetSafe counselling, staff training and self-exclusion program.
The Commission noted (at p.7.22) BetSafe's support for Self-Exclusion as a pathway into counselling stating:
Betsafe also said that they had found referrals by gaming venues at the time of self exclusion to be an effective means of promoting counselling services to problem gamblers.
The Commission also relied heavily on BetSafe's comments in its commentary on Self-Exclusion (p.10.7). This included BetSafe's recommendation that forfeiture of gaming prizes be introduced as a sanction to strengthen Self-Exclusion (pp.10.13, 10.14, E10), and BetSafe's third party exclusion procedures (p.10.14).
Interestingly, the Productivity Commission statistics showed the superiority of BetSafe's Self-Exclusion scheme to alternative programs run by clubs and hotels. The report showed that 1855 people self-excluded from BetSafe venues. This compared with 934 people who self-excluded from GameCare hotels and an estimate of 1,000 from members of the Club safe program. BetSafe's 42 clubs had a much higher exclusion rate per venue than the alternative club and hotel programs; the GameCare statistics relate to approx 1,800 NSW hotels and the Club safe statistics relate to approx 1,400 NSW clubs. BetSafe is quoted (at p.E11) as saying:
There is considerable variation in the success of self-exclusion programs. Some gaming venues actively promote self-exclusion and make the process quick and effective. Others take little interest and discourage inquiries from patrons who wish to self exclude.
In relation to problem gambling counselling, the Commission (at p.7.37) quoted BetSafe's statement that
Gambling counselling is challenging work that is best conducted by skilled professionals. There is a place for theoretical training, but the reality is that gambling counselling is most effective when conducted by experienced addictions counsellors who understand gambling issues.
On the question of school-based gambling education programs, the Commission (at p.9.4) referred to BetSafe's comments that:
Educative strategies and the provision of information and warnings about gambling products could be more effective. This should begin at school age and continue on into adult education. The focus of gambling marketing should be on the entertainment value of gambling rather than the prospect of winning or paying for living expenses with gambling winnings.
When considering pre-commitment, the Commission noted BetSafe's cautionary observation that the uptake of player activity statements in N.S.W. has been very low (p.10.22).
Regarding casinos, BetSafe is quoted (at p.13.28) as saying:
A distinction needs to be made between international high rollers and other categories of gambler. In our opinion, it is appropriate for exemptions to apply to casino gamblers who are overseas residents and come to Australia as tourists or on junkets. One means of identification is to require the person to present their passport showing a short-term tourist visa. These overseas visitors should be entitled to a liberal range of financial options as their presence in Australia is only temporary. By contrast, BetSafe considers that the current approach by casinos of nominating residents as "high rollers" based on their gambling expenditure to be flawed. Wealthy Australian residents can easily arrange for their gambling funds to be deposited in a casino account by electronic transfer or cheque. A considerable number of "high rollers" in casinos are in fact problem gamblers who are gambling beyond their means. If they don't have a personal assistant to arrange for the funds to be deposited into their casino account, or if they don't have a chequebook, then their status as genuine "high rollers" should be questioned.
On the discussion of internet gambling, the Commission (at p.K4) stated:
BetSafe also suggested that the introduction of some of the draft harm minimisation proposals may negate the need to prohibit advertising of EGMs. For example in NSW, there is a statutory prohibition against the external advertising of gaming machines. This would no longer be appropriate in an environment where internet gambling was widely advertised. It would be more appropriate to allow both industries to advertise their products and impose the same precommitment and other responsible gambling restrictions on each.
On the question of mandatory shutdown, the Commission (p.14.31) quoted BetSafe:
We live in a society that operates 24 hours a day. It doesn't matter when the shutdown period occurs, some group of society will be affected. The current shutdown periods are all in the late night/early morning period when gaming machine usage is at its lowest. But that means that those late night and shift workers are deprived of a form of entertainment available to other groups. Whenever the shutdown period occurs, some group will be disadvantaged.
Relating to Government consultation, the Commission said (at p.17.13):
Betsafe similarly identified the important role of consultation, stressing the gaming industry's need for clarity about policy proposals and associated impacts on their viability. They argued that governments had generally failed to consult as a matter of process and that:
'... the history of governmental regulation in the gaming industry throughout Australia has been one of hasty regulation with inadequate consultation.'
The Commission (at p.18.22) quoted BetSafe's comments in relation to co-operation with New Zealand:
the NZ gambling market has much in common with Australia and we consider that involving NZ in a joint centre for gambling policy research and evaluation will benefit both countries.
The Report's Key Points
The Productivity Commission noted that the rapid growth following the liberalisation of gambling in the 1990s has now passed and current growth in gambling is quite slow. Total recorded expenditure (losses) in Australia reached just over $19 billion in 2008-09, or an average of $1,500 per adult who gambled.
Gambling is an enjoyable pursuit for many Australians. As much as possible, policy should aim to preserve the benefits, while targeting measures at gamblers facing significant risks or harm.
While precision is impossible, various state surveys suggest that the number of Australians categorised as 'problem gamblers' ranges around 115,000, with people categorised as at 'moderate risk' ranging around 280,000.
Around 600,000 Australians (4 per cent of the adult population) play gaming machines at least weekly. While survey results vary, around 15 per cent of these regular players (95,000) are 'problem gamblers'. And their share of total spending on machines is estimated to range around 40 per cent.
The significant social cost of problem gambling - estimated to be at least $4.7 billion a year - means that even policy measures with modest efficacy in reducing harm will often be worthwhile.
Over the last decade, state and territory governments have put in place an array of regulations and other measures intended to reduce harm to gamblers. Some have been helpful, but some have had little effect, and some have imposed unnecessary burdens on the industry. A more coherent and effective policy approach is needed, with targeted policies that can effectively address the high rate of problems experienced by those playing gaming machines regularly.
Recreational gamblers typically play at low intensity. But if machines are played at high intensity, it is easy to lose $1,500 or more in an hour.
The Report's Key Recommendations
- Maximum amount of cash that can be fed into a gaming machine at one time limited to $20.
- Maximum gaming machine bet lowed to $1.
- Shutdown periods to commence earlier and be of longer duration.
- Introduce 'pre-commitment' systems that allow players to set binding limits on their losses.
- Better warnings and other information in venues.
- Relocate ATMs away from gaming floors.
- $250 daily cash withdrawal limit for ATMs in gaming venues.
- Enhanced problem gambling counsellor training and better service coordination.
- Legalising online poker as a prelude to legalising all online gaming.
- Consider a national funding model for the racing industry.
- Governments to improve their policy-making and gambling regulation, and improve arrangements for national research.
Government Response
At a joint media conference on 23 June 2010, Jenny Macklin, the Minister for Families, Housing, Community Services and Indigenous Affairs and Stephen Conroy, the Minister for Broadband, Communications and the Digital Economy outlined the Government's response to the Productivity Commission report, indicating that the Commonwealth:
- will establish a committee with the State Governments to consider the report. This will be known as the COAG Select Council on Gambling Reform.
- supports the Commission's pre-commitment recommendations.
- does not support the liberalisation of online gambling.
- does not intend to adopt a position in respect of any of the other recommendations until it has consulted extensively with the States.
Henry Taxation Review
The Productivity Commission did not review the taxation arrangements between the Government and registered clubs in this report. Instead, the issue of taxation was considered by the Commonwealth Government's Review into Australia's Future Taxation System (the Henry Review), which made the following recommendation (at Recommendation 44):
Simple and efficient tax arrangements should be established for clubs with large trading activities in the fields of gaming, catering, entertainment and hospitality. One option is to apply a concessional rate of tax to total net income from these activities above a high threshold. For clubs below the threshold, no tax would be applied to income from these activities.
