Electronic gaming machines: lessons from Norway

Parliament house flag post

Electronic gaming machines: lessons from Norway

Posted 23/11/2011 by Amanda Biggs

In recent months both sides in the contentious debate around mandatory pre-commitment (MPC)—where players would have to pre-set the amount they were prepared to lose on electronic gaming machines (EGMs)—have cited 'evidence' from Norway to support their respective arguments. As this Parliamentary Library Background Note explains, supporters of MPC have pointed to Norway to argue in favour of MPC. Meanwhile, those opposed to MPC, including those in the clubs industry, argue that the evidence from Norway shows that MPC won't work.

How can the same evidence be used to support opposite sides of the argument?

Norway banned EGMs in July 2007 in response to ongoing concerns over the harms from problem gambling. EGMs had become the subject of tighter controls because of concerns they contributed to problem gambling in Norway. In 2003 the government began efforts to impose greater control on gaming machines but these were met with considerable resistance from the gaming machine industry. In January 2009 new gaming machines—known as video lottery terminals (VLTs)—were introduced under the control of the state operator, Norsk Tipping. These VLTs were configured to make them less harmful, including: a mandatory limit on the amount players could gamble, mandatory breaks in play, lower bets, lower prizes and player exclusion options. Players were also required to use a cashless smartcard to play and all machines were connected to a central server. These machines became increasingly popular; the number of active players rose from 85 000 in 2009 to over 99 000 in 2010 (see Norsk Tipping's 2010 annual report, p. 67).

So, what evidence from the Norwegian experience has been cited to support MPC? A study by Ingeborg Lund in the Journal of Gambling Studies, found that following the ban on EGMs, key gambling indicators, including total gambling participation, gambling frequency and gambling problems in Norway, all fell—in some cases significantly. Interestingly, Lund found no evidence of the development of an illegal EGM market, or of substitution of EGMs with other types of gambling, such as internet gambling.

However, opponents of MPC point to other findings that would appear to contradict some of Lund's conclusions. They argue that there was actually an increase in internet gambling in Norway after the removal of slot machines, as well as an increase in reports of gambling harm associated with this mode of gambling.

Gambling data reported by Norsk Tipping in its annual report showed that participation in internet gambling had increased and calls to gambling helpline services from internet problem gamblers nearly doubled between 2008 and 2010, although the numbers were still small. An increase in the proportion who were classed as problem gamblers was also observed, rising from 1.9 per cent in 2008 to 2.1 per cent in 2010. Players at moderate risk of developing a problem also increased, from 2.1 per cent in 2008 to 2.3 per cent in 2010.

Conversely, by 2010 a higher proportion of the population in Norway were reporting no gambling problems; the proportion without problems rising from 85.2 per cent of the population in 2008 to 87 per cent in 2010. There was also a decline in the proportion of low-risk gamblers, from 10.9 per cent in 2008 to 8.6 per cent of the population in 2010.

So, how are we to interpret what appear to be conflicting evidence? As the paper points out, some of the shifts detected in the survey data are relatively small, so how much can be gleaned is uncertain. In the case of problem and moderate risk gamblers, an increase in prevalence of just 0.2 per cent was considered by Norsk Tipping to be 'within the margin of error' from the 2008 survey. Secondly, the methodology used by the survey company, Synovate, was revised between the survey dates, raising questions over the comparability of the two surveys.

Thirdly, data on utilisation of helpline services may not be the best indicator of problem gambling prevalence. As noted in this previous Flagpost a significant proportion of problem gamblers never access help services, so relying on such data as a proxy for gambling problems has only limited usefulness. Further, the increase in participation in internet gambling may simply reflect an ongoing trend towards internet-based technologies, rather than a substitution effect.

The paper notes there are some key differences between Australia and Norway that raise questions over how comparable the two are when it comes to the issue of EGM reform. These include, among others: differences in the types of EGMs with Australia's configured for more 'intense' play; differences in where EGMs are located—Norway's EGMs are located in supermarkets, train stations and petrol stations, ours are in clubs, pubs and other hospitality venues; and differences in the internet gambling environment—Australia prohibits internet casino games, but these are permitted in Norway.

The paper points to other useful lessons that can be learnt from Norway. Firstly, the reduction in harm from gambling following the EGM ban in Norway strongly suggests that EGMs were significant contributors to these harms, and helps justify arguments for greater EGM controls. That Norway successfully replaced its EGMs with ones configured to reduce harm but which have gone on to be popular among players may reinforce the view that greater controls on EGMs can be achieved without trading off player enjoyment. It also underscores the ability of governments to overcome vested interests, although progressing such reforms will require a sustained effort. A further lesson is that the trend to online gambling will continue, regardless of whether or not MPC is implemented here. This presents problems for policy makers, as many Australians currently gamble on overseas based websites, beyond the reach of our regulatory regime. How to minimise harm and support responsible gambling initiatives will be particular challenges in this environment.

Thank you for your comment. If it does not require moderation, it will appear shortly.
Facebook LinkedIn Twitter Add | Email Print


Flagpost is a blog on current issues of interest to members of the Australian Parliament

Parliamentary Library Logo showing Information Analysis & Advice




refugees asylum immigration Australian foreign policy Parliament climate change elections women social security Indigenous Australians Australian Bureau of Statistics Employment taxation Sport illicit drugs Medicare welfare reform Australian Defence Force welfare policy Asia income management Middle East criminal law disability Australian Sports Anti-Doping Agency World Anti-Doping Agency United States higher education people trafficking school education aid statistics Australian Electoral Commission WADA United Nations federal budget health financing emissions trading gambling Australia in the Asian Century steroids detention Private health insurance OECD ASADA labour force transport Law Enforcement Australian Federal Police Industrial Relations dental health National Disability Insurance Scheme forced labour Senate election results Papua New Guinea Australian Public Service International Women's Day corruption Fair Work Act child protection people smuggling debt federal election 2013 parliamentary procedure ALP New Zealand Australian Crime Commission Newstart Parenting Payment 43rd Parliament slavery by-election political parties Census constitution High Court skilled migration voting Federal Court terrorist groups Afghanistan Higher Education Loan Program HECS youth Aviation environment foreign debt gross debt net debt defence capability customs poker machines doping health crime health risks multiculturalism aged care Gonski Review of Funding for Schooling sex slavery sea farers leadership United Kingdom UK Parliament Electoral reform politics banking firearms public policy mental health China ADRV terrorism social media pensions welfare ASIO intelligence community Australian Security Intelligence Organisation governance public service reform Carbon Pricing Mechanism carbon tax mining military history employer employee fishing paid parental leave European Union same sex relationships international relations coal seam gas planning United Nations Security Council Australian economy food vocational education and training Drugs Indonesia children codes of conduct terrorist financing election timetable citizenship Productivity asylum seekers early childhood education Canada Population Financial sector national security fuel violence against women domestic violence disability employment Tasmania integrity science research and development Australian Secret Intelligence Service sexual abuse federal state relations World Trade Organization Australia accountability housing affordability bulk billing water renewable energy children's health health policy Governor-General US economy export liquefied natural gas foreign bribery question time speaker superannuation family assistance expertise Senators and Members climate Intergovernmental Panel on Climate Change Department of Agriculture Fisheries and Forestry food labelling Pacific Islands reserved seats new psychoactive substances synthetic drugs UNODC carbon markets health reform Indigenous constitutional recognition of local government local government consumer laws PISA royal commission US politics language education Leaders of the Opposition Parliamentary remuneration health system Australia Greens money laundering servitude Special Rapporteur Trafficking Protocol energy forced marriage rural and regional Northern Territory Emergency Response ministries social citizenship China; Economic policy; Southeast Asia; Africa housing Speaker; House of Representatives; Parliament Defence High Court; Indigenous; Indigenous Australians; Native Title ACT Indigenous education Norfolk Island External Territories emissions reduction fund; climate change child care funding refugees immigration asylum procurement Indigenous health e-voting internet voting nsw state elections 44th Parliament 2015 ABS Age Pension Death penalty capital punishment execution Bali nine Bali bombings Trade EU China soft power education Fiji India Disability Support Pension Antarctica Diplomacy by-elections state and territories workers Bills anti-corruption fraud bribery transparency corporate ownership whistleblower G20 economic reform innovation standards NATO Members of Parliament Scottish referendum Middle East; national security; terrorism social services Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 online grooming sexual assault of minors ACT Assembly public health smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Southeast Asia Israel Palestine regional unemployment asylum refugees immigration political finance donations foreign aid Economics efficiency human rights; Racial Discrimination Act employment law bullying Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies trade unions same-sex marriage disorderly conduct retirement Parliament House standing orders public housing prime ministers sitting days First speech defence budget submarines Somalia GDP forestry world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission regulation limitation period universities Ireland cancer gene patents genetic testing suspension of standing and sessional orders animal health live exports welfare systems infant mortality middle class welfare honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC nutrition anti-dumping Constitutional reform referendum Rent Assistance competition policy pharmaceutical benefits scheme obesity evidence law sacrament of confession US presidential election international days baby bonus DFAT UN General Assembly deregulation Regulation Impact Statements administrative law small business Breaker Morant homelessness regional engagement social determinants of health abortion Youth Allowance Members suspension citizen engagement policymaking federal election 2010 workplace health and safety Trafficking in Persons Report marine reserves hearing TAFE Victoria astronomy resources sector YMCA youth parliament alcohol Korea rebate Australian Greens presidential nomination Racial Discrimination Act entitlements political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing Hung Parliament political education social inclusion Social Inclusion Board maritime early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin Iran sanctions

Show all
Show less
Back to top