Gambling
Australians top the world for per-capita gambling losses – more than $1 000 per person, or $2 400 per household. That’s the financial burden. Then there is the burden of crime, family breakdown, domestic violence and suicide, consequent on gambling losses. There has been a serious failure in public policy, similar in many aspects to America’s problem with gun control.
Gambling and crime – strong evidence of a causal relationship
Spending on gambling is associated with crime, and the relationship is almost certainly causal.
Wai Yin Wan, Joanna Wang and Donald Weatherburn have published the results of their study examining the relationship between gambling expenditure and crime. They examine spending on poker machines in New South Wales, disaggregated by local government area, and see how it relates to the incidence of specific property and violent crimes in those same local government areas. They use multivariant analysis to isolate, as far as possible, the independent relationship between changes in gambling expenditure and changes in crime.
They find that each 10 percent increase in gambling expenditure is associated with increases between 7 and 11 percent in motor vehicle theft, break and enter, and assault.
They do not study the specific mechanisms leading to this relationship, but they provide a tentative explanation:
The mechanism underpinning the effect of gambling expenditure on crime cannot be determined from the present data, but the most plausible hypothesis is that frequent gamblers (who account for bulk of gambling expenditure) resort to crime either to raise cash to spend on gambling or to cover gambling debts.
Sports betting advertising – ducking for cover won’t make the problem go away
Funding journalism from the revenue of an industry that preys on the poor and vulnerable is lousy public policy, by any imaginable standard.
Since the government sent the message that it was going for an insipid and ineffective compromise on gambling advertisements (covered in the 10 August roundup), more pressure has come on them to enact a complete ban on gambling advertisements.
The government’s procrastination has given time for journalists and others, including backbenchers, to check claims that a ban on gambling would drive gamblers to the illegal market on the dark web, beyond the reach of any regulating authority. The gambling lobbyists named Belgium and Norway as two countries where tough bans had driven gamblers offshore.
ABC journalists checked what has happened in Belgium. Saturday Extra’s producers caught up with Bram Constandt, professor of sport management at Ghent University, Do gambling ad bans in Belgium work?. (11 minutes)
The simple answer is that it’s too early to tell. Bans have been in place for only a year, and as yet they are not total: they are still being phased in, there are loopholes to be closed, and so far there have been few resources devoted to enforcement.
In any event Belgium is not a particularly apt country as a model for a country girt by sea and that has its own currency. From anywhere in Belgium a short drive will place you in Netherlands or Luxembourg, two countries with comparatively libertarian traditions, and you probably don’t even notice you have crossed the border.
Then Steve Cannane interviewed Stein Langberget, Special Advisor on regulatory affairs to the CEO of Norsk Tipping, Norway's state-owned monopoly gambling operator, to check the industry’s claim that offshore sites take 66 percent of Norway’s gambling revenue: How gambling ad bans work internationally. (10 minutes)
Langerget was somewhat surprised by this figure. The actual figure is more like 10 percent for all gambling, and about 6 percent for sports gambling.
Norway is a reasonably good model for Australia, in that it is not in the EU and it has its own currency. Langeret also stressed that Norway puts considerable resources into stopping illegal gambling. That’s an area where, for many reasons to do with the interconnectedness of all forms of organized crime, Australia could put in more effort in association with other countries in our region. For an outline of what those other countries are doing, see John Langdale’s article in 360 Why organised crime puts its money on online gambling.
The most important lesson we can draw from Norway is the case for strong government regulation. In Norway gambling is not only regulated by the government: it is aloo run by the government as a state-owned monopoly.
That’s hardly radical: back when most gambling was on horses Australian governments established government-run Totalisator Agency Boards in each state. They weren’t a complete monopoly: there were still the bookies but the TABs catered for casual gamblers.
The government’s procrastination has prompted independent MP Zoe Daniel to present a bill for an amendment to the Broadcasting Services Act, based on tobacco advertisement bans, to prohibit TV advertising of gambling. She acknowledges that commercial media companies are struggling, but she stresses that there are other ways for governments to support them, such as reducing fees for use of the spectrum.
Such a comparison with the tobacco industry is fitting, according to Ross Gordon of the University of Technology, Sydney, writing in The Conversation: Big alcohol and tobacco are the aces of strategic marketing. The gambling industry has adopted the playbook.
In a similar vein the Australia Institute suggests that a two percent levy on gambling revenue could replace broadcasters’ revenue from gambling advertising – with enough left over to give a bit more to the ABC.
Additional pressure has come from the government’s review of the way to prevent violence against women. The review’s report Unlocking the prevention potential: accelerating action to end domestic, family and sexual violence calls on governments to:
review and amend alcohol and gambling regulatory environments to prioritise the prevention of DFSV [domestic, family and sexual violence]. This includes through restrictions on alcohol sale, advertising and delivery timeframes; restrictions leading to a total ban on advertising in gambling; and an examination of the density of electronic gaming machines and use of online gambling in relation to DSFV prevalence.
This not only adds to pressure on the government in relation to gambling; it also reminds the government that alcohol advertising is another source of revenue for the media.
That’s all about broad public policy, but it’s worthwhile listening to the story of “John”, who lost $600 000 on sports bets. His 12-minute account – Gambling victim talks of losing life savings – on ABC’s RN is anecdotal, but in it he covers the specific strategies the sports betting companies use to exploit the vulnerable, such as providing credit in his betting account and giving heavy gamblers “VIP” treatment. He explains how the self-exclusion mechanisms failed, and how the company didn’t react to the obvious evidence that he was heading towards penury.
The longer the government procrastinates, the more it reinforces the Coalition’s portrayal of the government as being paralyzed by fear, writes Jack Waterford in Pearls and Irritations. He concludes:
The gambling advertising debate now is the last test of Labor character. And of Albanese’s character. The big end of town may want the Albanese concessions. There’s no evidence that the public does. Or should. That is an issue, like same-sex marriage or the Voice vote, outside the governing mainstream. It’s the sort of issue, unlike any matter of economic management or outcomes in health, education, childcare, aged care, disability care or social welfare, which will be regarded as a landmark of Albanese government.
and
The public should see the outcome as an inevitable consequence of the corrupt relationships between Labor and the gambling industry, and its pathetic, but inevitably doomed, efforts to suck up to media moguls. Even assuming that it is not the sort of matter with which the NACC would want to hold limited and unaccountable closed hearings, the stench from Labor in Government, and on its timid leader, can only increase.
How we allowed gambling to take over sport
Sports betting has come to the fore recently because of its rapid recent growth, and the political campaign around the government’s procrastination in responding to Peta Murphy’s report, but its genesis is in the Northern Territory, 30 years ago.
“You can’t overstate how early and how influential the Northern Territory was” says sports writer and broadcaster Titus O’Reily, in an ABC Rear Vision program: A mini casino in your pocket – how sport became a gambling product. Once it had started in the Northern Territory other states had to follow, such is the nature of fiscal competition in our federation.
Portable casino
O’Reily is one of five panellists on the program describing the rise of sports betting.
We have had sports betting for a long time, but it was confined to horse racing. It’s transformation to a wider role was in two stages: first to extend sports betting to other sports, and second to shift spectator sport from a form of entertainment to a vehicle for gambling. In the first stage a Port Adelaide fan may lay a bet on his side winning in a Port Adelaide vs Collingwood match. In the second phase there is no connection with the game: addicted to the gambling aspect he is just as likely to bet on the ice hockey game in Saudi Arabia.
The panellists recount a history of government regulation, which for a long time was mainly concerned with protecting the integrity of the sports by preventing match fixing. Once that was achieved governments became less concerned.
They provide a “who’s who” of the individuals and the organizations who have driven and prospered from this transition. All the football associations are in a symbiotic relationship with the gambling companies. One of Australia’s leading racing personalities was involved in the early stages of sports betting, but he found that this association didn’t go down well with the public and got out, leaving sports betting to big corporate outfits quietly operating in the background, without a public presence, and unconstrained by any consideration of morality or the need for a social licence.
They describe the industry’s business model: it’s aimed at young men, and it benefits from the convenience of cellphone apps.
The methods to hook people in are those that operate for poker machines. On the program Charles Livingstone describes the psychological path to addiction. It starts with advertising (doesn’t really matter when the advertisement is shown), and it leads to a total immersion, in which the gambler has lost all capacity for reasoned decision-making.