Wednesday, October 08, 2008

Pokies unfairly stigmatised

Perhaps emboldened by having taken up his position in the Senate, Nick Xenophon seems to have moved from espousing further restrictions on poker machines to advocating their complete abolition.  He recently told a gambling industry conference that he sees a time when "common sense prevails and you are shut down for good".

In his speech, Xenophon repeated the usual piece of anti-pokies rhetoric that places a large proportion of the blame for their ongoing existence on state governments, which are allegedly so beholden to taxation on gambling.

Considering that in 2006-07, the states and territories received $4.7 billion in gambling taxes, out of a total state and territory revenue of almost $153 billion, it is hard to argue that a rate of a bit over 3 per cent for gambling as a whole, or 2 per cent for gaming machines, is unduly heavy reliance, when compared to property and payroll taxes.

Even more strange is the fact that anti-gambling campaigners often argue for increased gambling taxes, which would of course only increase the "reliance" they bemoan.  There is also evidence that pokies use has plateaued in recent years, with data showing a decline in the percentage they make up of household expenditure.

Of course, the main issue for the opponents seems to be not the total numbers who use the machines but the small percentage of problem gamblers.  A 1999 Productivity Commission report found that 2.1 per cent of poker machine users were problem gamblers.

While there has been no national study since then (the Productivity Commission will shortly commence a new study), most state-based surveys have indicated a rate of problem gambling at less than half that level.  And if surveys in Queensland are typical, it is a declining rate, in that state going from 0.83 per cent in 2001 to 0.47 per cent in 2006-07.

Anti-gambling crusaders constantly claim that problem gambling leads to financial hardship and personal stress.  In fact, less than two per cent of business bankruptcies in 2004-05 were gambling related, while a 2006 Relationships Australia survey placed gambling 22nd of 24 possible factors "negatively influencing relationship with partner", with a score of just 3 per cent.  Six times as many people had relationship problems due to disputes over housework and three times as many complained about the "influence of in laws".

Banning gambling is usually one of the first acts of authoritarian governments when they seize power, but imposing restrictions on it is also a common action of democracies.  However, what generally happens is that types of gambling that appeal to working class people, such as SP bookmaking for much of the twentieth century, and now poker machines, come under far greater attack than the gambling modes of choice of the elites.  Denying gambling choice to ordinary people is a rare area of common policy of conservatives and the Left.

As one of the most regulated industries in the nation, the gambling industry can reel off a lengthy list of good causes that the revenue it has generated has been applied to both in dealing with problem gambling and funding other initiatives.  Plus they point to the significant number of jobs provided directly, and indirectly, by the industry.

However, there is a much more fundamental issue at stake than these utilitarian benefits.  While there is no doubt that problems have been caused by gambling and by poker machines, these negatives do not justify stopping the 97.9 per cent, or more likely 99 per cent, of non-problem gamblers, from consuming a product they enjoy.  A 2003 survey in Victoria found that only 4 per cent of people had found gambling had a negative impact on their lives, compared to 21 per cent who found it had a positive impact (and 75 per cent for whom it made no difference).  Why should the needs of the 4 per cent outweigh the 21 per cent?

Of course, there are many aspects of our society where if one chooses to focus purely on the negative aspects one can mount an argument that the activity should be stopped.  For instance, car accidents destroy far more lives than poker machine addiction ever will.  In 2007, a total of 1,616 people lost their lives on Australia's roads, with some estimates of the economic costs of this being in the order of $25 billion per year.

If one followed the pokies model, politicians like Senator Xenophon would be proposing that in the short-term we remove ten per cent of cars from the road, with a long term aim of removing them altogether.

Whatever one's personal position on the potential costs and benefits of driving a car, or playing the pokies, that decision is clearly best left with the individual, rather than the state.

Senator Xenophon claimed in his speech to "believe strongly in freedom of choice".  He has a funny way of showing it.


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