In their desperate attempt to try to ward off consumer protection measures for poker machine gamblers, Clubs Australia has exaggerated the costs of implementing a system that will allow gamblers to set themselves enforceable limits.
At the same time they seek to sucker-punch local communities by playing up the voluntary contributions they make to groups such as the local junior footy team. In reality, clubs with pokies, especially in NSW, have enjoyed tax breaks that mean the community funds this claimed generosity.
The reality is that Clubs Australia tries to maintain the myth it cares about reducing problem gambling, while opposing anything that would reduce poker machine losses. With $4 in every $10 coming from the pockets of people with gambling problems, these two positions can simply not be reconciled.
Clubs in NSW have become centred on poker machine losses. It is not a small aside to a wider range of facilities; it is the core business. The Productivity Commission pointed out that, for clubs that have pokies, more than two-thirds of club revenue in NSW came from poker machine losses.
On the cost side, Clubs Australia makes the claim it will cost the pokies industry $3 billion to implement a system that allows gamblers to set themselves an enforceable limit on the pokies. The pokies industry takes $11.8bn a year from gamblers, so in reality even this exaggerated claim is just three months of revenue for a single year based on machines the industry says have an average 14-year life. Or, put another way, the pokies industry is claiming a cost of about $16,000 a machine when the average machine take in a single year is $56,0000.
However, the estimates of the cost of implementing pre-commitment from submissions made to a parliamentary inquiry by companies providing such technology are much lower than the wild claims made by Clubs. For example, Maxgaming stated its Simplay pre-commitment system in Queensland was charged to venues at $1.50 a machine a day, which is a bit under $550 a year for a machine. That’s very affordable for any poker machine earning even remotely near the $56,000 a year average.
In addition, the Clubs estimate fails to take into account the fact many of the poker machines that need to be replaced would be replaced at some point anyway. Therefore it is erroneous to claim the entire replacement cost on every machine to be replaced. Further, only a fraction of machines will need replacement.
Clubs’ addiction to fleecing the community through poker machines makes them less community focused, not more.
The Productivity Commission found that clubs with no or low poker machine profits had six times more volunteers an employee than in “super” clubs, where poker machine revenue has displaced community volunteers.
The Productivity Commission pointed out the tax rates for registered clubs in NSW are about half of what apply for hotels. So in the 2007-08 financial year NSW clubs enjoyed a $484 million tax break on poker machine losses compared with hotels.
So instead of this money going to the NSW government to decide how to best spend it for the benefit of the whole community, it was left to individual clubs to decide how to spend this windfall. The Independent Pricing and Regulatory Tribunal identified just $91m of direct cash contributions were provided by NSW clubs to the community, with professional sport getting $25m of this. No wonder the NRL does not want gamblers to have the ability to set themselves enforceable loss limits.
Wait, it gets worse. In late 2009, former Clubs NSW chief executive Mark Fitzgibbon told the media that Clubs NSW was able to use political donations to buy government access, which it used to influence policy. He said, “We did support political party fundraising, which was a legitimate activity, and it certainly assisted us in gaining access. I have no doubt it had some influence.”
Therefore, it is hardly a surprise Clubs Australia has mounted a sustained campaign of personal attacks against Andrew Wilkie and Nick Xenophon, politicians who are clearly immune to being influenced by political donations and who are determined to see reforms that will reduce levels of problem gambling.
The community needs to be aware of the tricks pokies supporters pull to ward off reforms. We owe it to people who are vulnerable to this industry and their dependants to provide them with all reasonable safeguards to prevent problem gambling.
This opinion piece first appeared online at The Australian here: Clubs use tricky numbers to outfox pokies reform.