Transcript Slide 1

Is There Need for More Federal
Government Oversight of
Gambling?
Assoc. Prof. Linda Hancock
Deakin University
[email protected]
4 main sections
1. Comparative federalism- Canada &
Australia
– What’s similar, what’s different- comparative
federalisms?
– Which states/provinces lead/lag on RG?
– ? A progressive national agenda?
2. Why Australian national policy reform
merits attention
– PC inquiries 1999, 2010 reports
– Hung parliament-Wilkie agreement
– Joint Select Parliamentary Committee
hearings - pre commitment
Cont…
3. Reformist National Action Plan
(Hancock and O’Neill 2010)
Key question: what is jurisdictionally possible?
What can the Federal govt. do?
4. What can Canada and Australia learn
from each other to progress RG national
policy and oversight?
Australia: 200,000 EGMs- $19b NGR
Tasmania
1.6%
SA
7.8%
ACT
2.5%
NT
0.8%
Queensland
20.0%
NSW
51.7%
Victoria
15.%
Canada
• 92,266 casino + VLT machines
• $14b GGR industry 2009
• Approx. 32million people cf Aust 21 million
•  Australia “more intensive” gambling scene
but many similarities
Club in Melbourne beachfront suburb
Hotel in Melbourne-sharing a carpark with
hardware supply warehouse and liquor store
Hotel in Geelong (regional city)
New style ‘club’ on the urban fringe-Melbourne
Example of a hotel: The Sphinx
Crown Casino-Largest casino in Aust.
1. Federalism in Australia and Canada
• Federalism – intergovernmental relations
• What’s similar
• What’s different?
• (Aust) From cooperative to managerial
federalism
• Ministerial Council (ineffective)
• COAG
• Canada Interprovincial Lottery Corporation –
RG cooperation: legal, technol, RG
• Which provinces/states lead/lag on RG?
What are the key questions for
a progressive Federal agenda in gambling
public policy?
• Australian & Canadian govts and regulators
espousing RG
• Important for national agendas in RG?
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Consumer protection
Product safety
‘Public interest test’
effective anti money laundering
Operator duty of care
Independent regulation
Independent research
2. Why Australia is of international
interest
• Gambling intensity-harms
• National PC inquiries 1999, 2010
• Joint Select Parliamentary Committee
20,000
18,000
Total gambling
16,000
Revenue, Total, $m
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Year
Intensity of Gambling in Australia
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•
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•
Mix of community accessible and casino (CBD) gambling
13 casinos - 78% reliant on gambling revenue
200,000 gaming machines
5,700 hotels and clubs with EGMs
– Hotels 28% reliant on gambling revenue
– Clubs 61% reliant on gambling revenue
• 4,500 TABs
• 4,700 lottery terminals
• Changes in industry structure:
– Gaming machines and casinos from 40% to 75% over 20 years
(next slide).
EGMs the ‘problem’
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–
–
EGMs contribute two-thirds of NGR from all gambling;
Concerns about intensity of EGMs, frequency and duration of play
local accessibility
Hours of opening
• High per capita density of EGM (1:110) (cf. Canada
1:366 people),
• high per capita losses and high state government
dependency on tax revenue;
• Association between SEIFA, NGR, disadvantage, low
income and number of EGMs;
• Highly regressive tax, 40% of revenue from problem
gamblers (P, 2010)
• Recognised negative IMPACTs- suicide, depression,
crime, embezzelment, etc. Community holds belief
EGMs “do more harm than good”, oppose expansion
of industry, identify broad social costs.
PC EGMs  Problems
EGMs most associated with loss of
control (PC)
PC Inquiries
• PC inquiry landmark 1999 report- flagged problems
‘problems remain of an order that warrant continued policy
attention”
• 10 years on PC report on Gambling 2010
– Brings together the data and the evidence on harms/EGMs as the
problem
– Estimated costs of gambling $4.7b per annum
– Major reforms to ‘slow down the machines’ ($1 per button push and
max. $20 note acceptors)
– Identifies the problem with gambling environments  technology
(Machine design + game features), venues, accessibility, machine
features + personal risk factors can lead to harmful outcomes
(alcohol consumption  alcoholism);
– PC Recommends internet liberalisation but govt rejects
– Confirms the ineffectiveness of State/territory RG reforms and weak
regulation
– argues for a consumer protection/public health model
The 'policy window' opens…….
• 2010 national Australian election
• Policy ‘window’
• Independent (Wilkie) brokers deal for
Commonwealth govt. to address gambling
• Senate Greens (from July 2011) and
independents supportive of reform agenda
Wilkie Agreement with PM Gillard
• Pre-commitment scheme consistent with PC
• commence in 2012 - full scheme in 2014.
• poker machine dynamic warning displays and costs
of play displays.
• ATMs in gaming venues to have a maximum
withdrawal limit of A $25 (excludes casinos)
• If states do not agree "[federal] government will
unilaterally seek to legislate in order to achieve the
reforms.. ... if required the government will support
Commonwealth legislation through parliament by
budget 2012.”
Joint Select Committee on Gambling
• PC recommendation on pre-commitment
• PC pre-commitment 'is a strong, practicable and
ultimately cost-effective option for harm
minimisation'.
• PC recommended a phased implementation of full
pre-commitment systems on all machines in all
jurisdictions by 2016.
• Govt proposes a ‘partial (non-binding) precommitment system be adopted by 2013., a full precommitment system would be in place by 2016’
(with an exemption for smaller venues until 2018).
• To report May 2011
3. National Response- What can
a federal govt do?
• Jurisdictional variations hard to justify, lack of
transparency in decision making, nondissemination of research/information, weak
focus on consumer outcomes, conflict of interest,
etc;
 HENCE 
• Need for Australian Government to take a
greater leadership role”, potentially use
corporations powers and activate other national
competencies.
(Hancock & O’Neill 2010)
Methodology
• Rake through federal competencies eg
corporations powers
– Corporations powers, Trade Practices Act
– Legislate for venue statutory duty of care and
consumer redress?
– Analyse govenance mechanisms
• Identify bargaining power in intergovernmental transfers $$
• Harmonise to highest standard of CP
• PC report
Governance Structures
Government Funded Research
 Policy Model to underpin Re-regulating gambling
Action Plan Recommendations
(Hancock & O’Neill)
1. New national consumer protection and product safety
standards
2. New product safety standards
1. ‘License to operate’ reforms
1.
2.
duty of care to customers and employees,
venue obligation to ascertain probity of funds being gambled
2. The ban on interactive (internet) gambling should be
maintained, and ATMs and other sources of finance be
banned from gambling venues;
RECOMMENDATIONS (continued)
5. A new Independent National Gambling Research and
Probity Commission, financed by the National gambling
Fund – WITH a national player tracking system to monitor
abnormal playing patterns;
5. Establish an MOU between the Australian Crime
Commission and the INGRPC re using the player tracking
database to detect money laundering and other criminal
activity.
Weaning the States off Gambling tax
How To Fund a National Reform Agenda?
- Establishment of a National Gambling Fund financed
by 2% industry levy
(Increasing public acceptance of a ‘super-profits’ tax eg.
Mining; years of tax concessions to gambling
industry)
- A new national lottery (one of the least harmful forms
of gambling);
- Modification of Commonwealth Grants Commission
funding formula to provide state governments an
incentive to reduce their reliance on revenue from
gambling;
The National Action Plan for the
Commonwealth to Re-regulate Gambling
Essential elements :
o Product safety/regulation, venue
responsibility,
o Industry obligations-license to operate,
o Governance: Independent Regulatory
oversight-national level (eg mystery
shopping, real enforcement),
o National agenda for Independent research,
evidenced based policy, independent
audit/monitoring.
What can Canada/Australia learn re
federal agenda?
• Duty of care jurisprudence
– Eg Ca Supreme Court and Aust High court
alcohol cases
• Loyalty tracking: RG and money laundering
detection AUSTRAC/ FINTRAC
• National machine safety standards
– What is a recreational level of EGM use?
• Auspice for Independent regulatory oversight?
• Auspice for Independent national research
Is this a window?
• On December 15, 2010 the Canada
Consumer Product Safety Act received
royal assent and is now Canadian law.
• The Act:
• prohibits the manufacture, importation, advertisement or sale
of any consumer products that pose an unreasonable danger
to human health or safety;
• requires industry to report serious incidents or deaths related
to a consumer product and to provide the government with
information about product safety issues;
• requires manufacturers or importers to provide test/study
results on products when asked;
• allows Canada's minister of health to order recalls of consumer
products; and
• imposes significant fines and penalties for non-compliance with
the Act.
Report refs:
• PC 2010 www.pc.gov.au › Projects › Gambling
• “Risky Business: Why the Commonwealth
Government Needs To Take Over Gambling
Regulation”, Alfred Deakin Research
Institute. Working Paper 11.
http://www.deakin.edu.au/alfred-deakin-researchinstitute/publications/workingpapers.php
• Joint Select Parliamentary Committee on
gambling
http://www.aph.gov.au/senate/committee/gamblingreform_ctte/precommit
ment_scheme/info.htm