Addressing harms from pokies: insights from new reports

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Addressing harms from pokies: insights from new reports

Posted 19/09/2013 by Amanda Biggs

Some recent reports are reminders that addressing problem gambling harms associated with electronic gaming machines or pokies remains challenging, but progress is possible. The first report evaluates the decision to ban Automatic Teller Machines (ATMs) from pokies venues in Victoria. The second quantifies the harms of pokies gambling in Victoria, prior to the removal of ATMs, while the third summarises lessons learnt from pre-commitment trials in South Australia.

The first report is an evaluation of the Victorian Government decision to remove ATMs from pokie venues. From July 2012, venues in Victoria were required to remove their ATM dispensers—EFTPOS facilities remained unchanged. The rationale for the removal was the accruing evidence that venues with ATMs had the highest levels of overspending amongst pokies gamblers. Prior to the ban, ATMs in such venues had withdrawal limits of $200 per transaction and $400 per day.

The evaluation found that following the ban expenditure on pokies fell by 7 per cent. High risk gamblers in particular lowered their spending and time spent gambling, had reduced the severity of their problem gambling symptoms and exerted more control over their spending. Significantly, the levels of EFTPOS withdrawals did not increase to match the ATM withdrawals decrease—most gamblers regarded EFTPOS as inconvenient. Nor was an increase in spend on other forms of gambling over the period observed, suggesting there was no substitution effect. The evaluation concluded that the removal of ATMs had been a cost-effective harm reduction and consumer protection measure.

A recent assessment of problem gambling harms in Victoria, conducted prior to the removal of ATMs quantifies the level of harms of problem gambling without such an intervention.

The Victorian Competition and Efficiency Commission report Counting the cost, estimated the social and economic costs of problem gambling in Victoria for the period 2010–11 (prior to the ban on ATMs). Total gambling expenditure in Victoria was $5.2 billion; spending on pokies totalled $2.7 billion. The cost of problem gambling was between $1.5 to $2.8 billion, mostly borne by problem gamblers—numbering around 30,000—and their families. The Commission found that the majority of excess spending from problem gambling was derived from gambling on pokies—which represented 66 per cent of excess gambling expenditure.

Some $1.0 to $1.4 billion comprised losses incurred by gamblers spending more than they could afford to lose. Health and social costs were estimated at between $400 million and $1.2 billion. Social costs included mental health issues, increased suicides, family breakdowns, loss of physical wellbeing and lost productivity. Additional costs of $42 million were incurred by state and local governments in the provision of treatment services, health and community services, research, justice and police, and regulation and management of the gambling industry. Costs of around $25.6 million were incurred by the Commonwealth Government mainly for the provision of health and counselling services.

The Commission found more harms were associated with pokies than with other forms of gambling. A higher prevalence rate of problem gambling was associated with higher concentrations of pokie machines, higher expenditure on pokies and higher levels of socioeconomic disadvantage.

Along with limits on ATM withdrawals and treatment and counselling, another harm minimisation tool is pre-commitment. Pre-commitment allows a gambler to pre-set an upper limit on their spending before gambling and warns them when they are close to reaching their limit. Under mandatory pre-commitment they would be locked out from further gambling once this limit is reached.

The introduction of a mandatory system was considered, but ultimately rejected, by the Gillard Government. Instead, in 2012, the Government legislated for a voluntary national pre-commitment system, as well as an ATM daily withdrawal limit of $250 and player warnings. Pre-commitment technology will be installed on pokies by 2022 (with extended deadlines for smaller venues), but using the technology will remain optional for players. The ATM withdrawal limit will apply from 1 February 2014.

Whether a voluntary pre-commitment system would be effective in curbing problem gambling was a key question in the debate around the legislation. The evidence base for such an approach is not extensive; few countries have introduced pre-commitment. A proposed trial of mandatory pre-commitment in the ACT may provide such evidence but is not guaranteed to proceed. Three trials of voluntary pre-commitment technologies conducted in South Australia were evaluated in a series of progress reports by a Responsible Gambling Working Party (RGWP). The fifth report summarises the evidence from the trials and presents the RWGP’s recommended specifications for a pre-commitment system.

The RGWP found that pre-commitment can assist all players, not just those experiencing negative impacts from their gambling. The trials showed that a range of players with varying degrees of risk who voluntarily used pre-commitment and other tools, gained an overall benefit, including reducing their expenditure.

However, staff engagement with players was pivotal. Take-up of pre-commitment peaked when staff promoted pre-commitment directly to players. Players who struggled to identify meaningful limits looked to staff for assistance, but discussing money matters was found to be highly sensitive. The trials found that limit setting options should be kept to a minimum, and that the registration process needs to be simple, quick, and easily understood. Player registration away from the machine was found to be more successful in achieving take-up and retention of pre-set limits. Players who initially set higher limits were found to be amenable to periodical reminders/messages to review their limits.

Barriers to take-up included perceptions that pre-commitment is only for problem gamblers, wariness that the government was seeking to control individual expenditure, staff using long-winded promotions and having to complete detailed paperwork. Privacy was also seen as a sensitive area. These trials suggest that appropriate staff training and carefully tailored in-venue information will be critical to successful implementation.

Together, these reports provide useful lessons and build the evidence base supporting both the implementation of a national voluntary pre-commitment system, and limits on ATM withdrawals.

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