Memorandum from Centre for Gambling Research,
Australia National University (DGB 130)
INTRODUCTION
The government's reform programme for gambling
in the UK proposes a commercial gambling environment which offers
a wide range of gambling options—including the National
Lottery, resort casinos, gaming machines in community venues,
bookmakers and betting shops, a privately owned/operated Tote,
online gambling, bingo, etc. In that regard the reforms would
establish a liberal gambling environment which is similar to,
but in some respects potentially more expansive than that which
has existed in Australia for over a decade.
Thus the Australian experience over the past
decade and the lessons learned are highly relevant, arguably more
so than the experience of many other gambling nations where gambling
liberalisation is less diverse or more recent (eg the USA, South
Africa). Especially so given the common social and multicultural
characteristics of the UK and Australia, and their common political-legal
traditions.
As well as the benefit of being able to learn
from the successes and failures of other countries, however, the
United Kingdom does have a distinctive advantage over federations
such as Australia, South Africa, Canada and the USA. The UK's
unitary system of government will allow a unified approach to
gambling policy and regulation which will thus avoid much of the
regional (interstate) rivalry for the gambling market which has
occurred elsewhere. The Joint Committee has a unique opportunity
to recommend a national policy and regulatory framework that which
avoids the pitfalls of other national models and sets new international
benchmarks for effective and accountable regulation.
Although I have drawn mainly on the Australian
experience, I do not suggest that the UK should simply adopt Australian
regulatory regimes or those of any other nation. On the contrary,
evidence has shown that gambling regulations (and gambling industry
practices) cannot successfully be transplanted from one nation
to another. It is important that the UK Government should develop
a regulatory approach suited to local conditions and aspirations.
My following comments are based mainly on my
experience as both researcher (since 1980s) and regulator (1991-2003)
of Australian gambling. A short biography is attached (Appendix
A). I have also reviewed the draft Gambling Bill and its associated
policy documents, as well as other materials including the Budd
Report and A Safe Bet for Success.
I trust that my comments on the draft Gambling
Bill and the associated regulatory framework for UK gambling will
be received as constructive suggestions to assist the Joint Committee
in its deliberations.
EMPIRICAL CONTEXT
OF GAMBLING
REGULATION
In general, the draft Gambling Bill seems to
make provision for development of a comprehensive regulatory regime
similar to the existing Australian approach to various forms of
gambling. However, it is also likely that industry and other stakeholders
could argue strongly for a more liberal application of regulatory
powers than proposed, with emphasis on mandated self-regulation
such as occurs in many other jurisdictions.
Lack of evidence of regulatory "failure"
in those jurisdictions and in the UK could be presented as confirmation
that past regulations have been effective. In the absence of a
systematic and independent regulatory review, however, that argument
may be based on a false premise. Rather, as found by several Australian
inquiries, lack of knowledge of regulatory failure could reflect
ineffective regulatory scrutiny and/or accountability rather than
successful enforcement of gambling laws.
Importantly, although Australian gambling regulations
are arguably more rigorous and comprehensive than most other nations,
the Australian experience has shown that even the Australian regulatory
models are deficient in many respects.
As in the UK, the chequered history of Australian
gambling and policy development has created an uneven regulatory
environment, resulting in different approaches to regulation for
various forms of gambling (McMillen et al 2000). For example,
significant differences have evolved between gaming and wagering
regulations in Australia. Importantly, the regulatory systems
for wagering do not meet the basic standards set for gaming (McMillen
et al 2001a). The racing industry and TABs have successfully argued
that there are material differences between gaming and wagering.
A key argument is that unlike gaming operators, who conduct the
gambling (provide the service) and also control the outcome of
the game (the product), licensed bookmakers and TABs are required
to be totally isolated from the outcome of the event. However,
the considerable risks to the wagering public and to sporting
codes have not, in my view, been adequately addressed in either
the UK or in Australia (McMillen 2001).
Recent large population surveys in Australia
have shown an increase in problem gambling associated with wagering
(McMillen et al 2001b; Queensland Household Gambling Survey 2001;
McMillen et al 2003). This trend corresponds to an increase in
wagering participation. Expenditure on sports betting for example,
increased by almost 50% in 2001-02 (Australian Gambling Statistics
2003). Yet few wagering providers have developed responsible gambling
strategies comparable to those required of gaming operators. A
review of UK online bookmakers suggests this is also true in the
UK. Even so, the Commonwealth Government appears more willing
to support and facilitate this form of online gambling, which
is presented as a logical extension of telephone betting.
With gaming, however, as the scope and scale
of commercial gambling expanded in recent decades, so were more
comprehensive regulatory systems developed to ensure that the
various Australian governments' objectives and standards were
achieved.
Casinos, for example, were introduced in three
stages in 1970s, 1980s and 1990s—each stage characterised
by larger, more commercial enterprises and correspondingly more
sophisticated and more rigorous regulatory systems (McMillen 1993,
1994, 1996). Yet, despite commercial expansion and technological
developments, the regulatory regimes for some established forms
of gambling (NSW club and hotel gaming machines, wagering, lotteries)
have not until recently been subject to similar public and political
scrutiny. Thus they have remained largely unchanged from when
they were first introduced in the early to mid twentieth century.
The general trend in Australia over the past
two decades has been towards a regulatory mix of punishment and
persuasion to achieve compliance. However incidents of regulatory
failure and evidence of problem gambling and aggressive industry
promotion began to appear in 1990s. For example, reviews of regulations
and corporate practices at Star City Casino and Crown Casino have
found serious breaches of regulation standards for money laundering
by the casino operators (McMillen and Woolley 2000; NSW Casino
Control Authority 2000; Farrell 2002; Dickie 2004). A pronounced
shift from government "command and control" to more
cooperative governance had emerged where governments are in partnership
with industry to facilitate market growth and gain competitive
advantage.
Mounting evidence of that partnership precipitated
a strong public backlash which led to the Productivity Commission's
(PC) inquiry into Australia's gambling industries (PC 1999). Issues
of consumer protection and ethical industry practice have become
increasingly important following the Commission's criticisms of
gambling policy and regulation. The PC found that while Australian
gambling regulatory arrangements have "some positive aspects",
there are serious shortcomings in both structure and process.
A "new regulatory paradigm" has recently
emerged in response to social issues (problem gambling, adverse
social impacts) and to public demands for more democratic and
accountable gambling regulation (McMillen 2002). In response to
the public backlash and the PC's criticisms, the current trend
by authorities in most Australian states/territories is not towards
deregulation or self-regulation, but to re-regulate to address
revealed regulatory failures.
Innovative policies for harm minimisation and
responsible gambling have been developed in most Australian jurisdictions
to reflect community values and expectations. The post-1999 focus
of regulatory reform has concentrated on harm minimisation and
consumer protection above other regulatory objectives, but that
this has not occurred in a consistent and uniform way. In some
cases (eg Queensland), these reforms have involved a degree of
constructive collaboration between government departments, regulated
gambling entities, and representatives of community interests.
NSW, Victoria and ACT governments, in contrast, have mandated
regulations for industry implementation. In most states, however,
industry agents continue to argue for a more self-regulatory approach.
Other proposals for regulatory reforms have
been met with strong, organised resistance by entrenched industry
interests, drawing on their considerable resources and political
connections. Despite recent reforms, the PC Chairman continues
to argue that "the highest priority [is] the need to reform
policy-making and regulatory governance arrangements" (Banks
2002: 21).
Current debates tend to generate more heat than
light, however, and policy "fixes" for responsible gambling
have been instinctively pragmatic rather than evidence-based.
This issue and the performance of Australian regulatory agencies
is currently subject to independent research (McMillen, Airo-Farulla
& Grabosky 2004).
The UK Government might also consider the benefit
of similar research to evaluate the successes and limitations
of existing regulations and the relevance of an "ideal type"
regulatory framework.
Draft Gambling Bill —The rationale for regulation
Whichever regulatory model is decided for the
UK, the rationale for that approach should be clearly defined
and accountability protocols established from the start to allow
(a) independent monitoring and evaluation of regulatory performance
and (b) the extent to which regulatory objectives are achieved.
For example, the UK could clarify the objects
of the Gambling Bill to include a fundamental commitment that
gambling must, on balance, be of public benefit. Until the effects
of policy reforms have been identified, "regulation by scarcity"
and the precautionary principle are strongly recommended.
The draft Gambling Bill seems to embrace two
contradictory objectives: the commercialisation and expansion
of gambling; and the prevention or minimisation of social harm.
Whichever of these two objectives has priority in legislation
and decision-making will determine the nature of the future UK
gambling industry and its social impacts.
In this regard the lessons from Australia may
be instructive. Since 1970s Australian gambling policies have
progressively and subtly shifted emphasis from community benefit
and crime control to economic imperatives—tax revenues,
economic growth, employment and tourism. Although this policy
focus facilitated industry expansion, the Productivity Commission's
1999 research demonstrated that the national economic benefits
of industry growth were "illusory".
The Productivity Commission also criticised
Australian policy-makers for lack of explicit policy rationale,
incrementalism and inconsistency. While regulations to address
the potential for criminal activity were found to be been relatively
effective, the Commission found that ad hoc decisions by policy-makers,
coloured by their shared objective with industry to maintain or
increase revenues, had allowed the market to expand beyond community
expectations.
The Commission found that a more restricted
and regulated market was required to achieve the social and integrity
objectives of gambling policy. This finding was more notable given
the Productivity Commission's general commitment to economic competition
and market principles.
Yet Australian gambling regulations have been
more restrictive than those proposed by the UK Government's current
policy and the draft Gambling Bill. Evidence from Australia suggests
that "regulation by scarcity" is a principle that has
been relatively effective in minimising the harm of machine gaming.
Where this principle has not been applied (eg NSW clubs, the gaming
machine duopoly in Victoria, wagering) problem gambling and other
regulatory risks have been demonstrably more common than in jurisdictions
where a more managed, regulated approach has been adopted.
Similarly, where market access has been restricted
(eg through regional monopoly casino licences) the level of problem
gambling and regulatory failure is less common than with other
more accessible and competitive sources of machine gaming (clubs
and hotels). The aggregate impact of more liberal, market-driven
policies should be carefully considered. Given the UK's current
policy to allow multiple US style resort casinos, it is notable
that the New Zealand Government originally planned for a similarly
"open" policy to casino development, calling for multiple
licence applications. However, following analysis of the impacts
of the first two casinos (Auckland and Christchurch), this policy
was reversed and a moratorium introduced by parliament—although
by that time six licences had been approved by the licensing authority.
Other examples of proactive regulation and policy
development have effectively prevented problems from occurring.
For example, purposeful collaboration between regulators and casino
licensees in Australia and New Zealand has prevented the crime
problems associated with casinos in the United States in the past
(McMillen 1993, 1998).
In recent years, many forms of Australian gambling
have become supply-driven rather than demand-driven. Technology
and the collective commercial power of the industry are now the
principal drivers of market supply. Aggressive marketing and promotions
(eg loyalty programs, note acceptors and smart card technology
that encourage increased gambling), development of more profitable
games, political donations, and the influence of industry at the
level of grassroots party politics have undermined the regulatory
standards established when operators were first licensed.
All industry sectors, particularly those with
an established power base, have also been able to negotiate lower
taxation rates and other concessions that reduce the public benefit
from gambling.
In an increasingly competitive gambling environment,
market changes have outpaced regulation and the original intentions
of law-makers. Lacking a clearly defined and legislated objective
of harm minimisation, Australian regulators have tended to constantly
react to developments and the resulting social problems and regulatory
difficulties, rather than taking a proactive approach to maximise
public benefit.
In response to the PC's inquiry, some Australian
regulatory agencies have since recommended application of the
precautionary principle to gambling regulation. A legislated commitment
to prevention of problem gambling is also progressively being
introduced in some states/territories. For example, following
the public backlash that led to the Productivity Commission inquiry,
the Queensland Government amended the object of all gambling legislation
to include a statement that gambling, on balance, should be of
community benefit.
Draft Gambling Bill —structure of regulation
I submit that it is imperative to separate the
policy-making function from licensing and regulation.
— The Government, through an appropriate
government department and Parliament, should be responsible for
policy-making and legislation.
— An independent Commission with adequate
regulatory powers and necessary resources should be responsible
for regulation and law enforcement. The Commission should report
to Parliament.
— Appeals against the Commission's
decisions, and decisions of all licensing authorities, should
properly be subject to judicial review—not a Gambling Appeals
Tribunal.
The Productivity Commission emphasised the need
for separation of regulatory and policy functions as a central
principle in its criticism of shortcomings in Australian gambling
regulation. Those criticisms included: inconsistent rationales;
priority to economic and revenue objectives; lack of substantive
independence of core regulators; disregard of consumer interests;
fragmented responsibilities; lack of due process and procedural
transparency; patchy consultation processes; and inadequate data
collection and research. The Joint Committee would benefit from
careful consideration of the evidence and findings in the Productivity
Commission Report (Chapters 13, 22).
The close relationship and shared interests
that inevitably develop between government and industry in a commercialised
gambling environment are not conducive to independent regulation
in the public interest. Too often the relationship becomes a partnership
to maintain (or grow) market share and public revenue. It is essential
that the regulatory function is both separate from, but contributes
to, policy development by government—and that this model
is applied consistently across all forms of gambling.
Independent statutory authorities have been
established in some Australian states primarily to act as a public
watchdog over government and industry, and the relationships between
them. In the main, this regulatory strategy has been effective
as a brake on corrupt or improper conduct/decisions.
That regulatory device has broken down and attracted
most public criticism where the statutory agency has been "captured"
or hampered in its activities by government (eg the VCGA until
2000). In some cases these authorities have not been provided
with adequate legal or regulatory powers (eg the capacity to seek
independent legal advice from Crown law, or to exercise certain
authorities) or with independent administrative and research support
for part-time Commissioners. Regulatory authorities are often
constrained by flawed legislation, inadequate resources and powers,
and the discretionary power of Ministers to override decisions
or to direct the Commission to review its decision.
This pattern is slowly changing, however, as
some jurisdictions reform legislation and existing arrangements
to accommodate public criticisms and emerging problems (eg Queensland
Office of Gambling Regulation, South Australian Independent Gambling
Authority; ACT Racing and Gaming Commission).
On the other hand, it may be that the PC's "ideal
type" blueprint for a gambling regulatory system is not appropriate
for all forms of gaming in the United Kingdom. It may be that
particular gambling forms and circumstances require alternative
models—a possibility that appears to be recognised in the
UK Government's commitment to "flexibility".
REGULATORY INSTRUMENTS
As proposed in the draft Gambling Bill, Australian
regulators theoretically have the capacity to use a range of conventional
regulatory instruments from letters of censure, financial penalties
to licence suspension or withdrawal. Statutory authorities can
also impose conditions on gambling licenses.
In practice, however, stronger sanctions and
penalties are rarely applied and financial penalties are not significant
enough to adversely impact operator revenue. Nor do regulators
tend to utilise the full range of available regulatory incentives
and disincentives. For example, I have advocated more frequent
use of publicity as a regulatory tool to encourage compliance;
eg, by publishing in newsletters and annual reports the details
of breaches of regulation and actions taken.
Moreover, without a well-resourced and alert
inspectorate or monitoring system, in a multiple venue gambling
environment it is difficult to know if operators and staff are
complying with licence conditions.
GAMING MACHINES:
As the base benchmark for the UK I strongly
recommend that the UK considers a regulatory regime similar to
that established in Queensland for gaming machines.
Relatively effective and accountable regulation
of Australian gaming machine operations has been achieved only
through regulatory regimes that include statutory authorities
(independent of both government and industry), rigorous licensing
and reporting requirements, and centralised monitoring systems.
This regulatory model was first introduced in Queensland in 1991.
From 1950s-1990s gaming machines were legalised
only in NSW and (from 1976) the ACT which embraced the NSW regulatory
model. All other Australian state governments resisted pressure
to introduce gaming machines because of the regulatory problems
in NSW, where a liberal regulatory environment had resulted in
political corruption, skimming and the growth of a politically
and economically powerful industry that exercised undue political
influence over policy. Gaming machines were introduced to other
jurisdictions only after the more stringent, innovative regulatory
framework had been developed for Queensland. The NSW system still
lacks the regulatory safeguards and scrutiny of other states,
although recent reforms have begun to rectify the situation.
In my view all current Australian regulatory
frameworks for gaming machines have limitations. However the Queensland
approach is superior to the NSW model and avoids the defects of
the ACT system (no centralised monitoring system) and Victoria
(where the private duopoly of Tattersalls and Tabcorp dominate
the environment).
Private operation of gaming should also be distinguished
from gaming by charitable organisations and public enterprise.
Private gambling providers tend to operate by
different principles and with different objectives to charitable
and public sector organisations. The privatisation of gambling
in Australia since the 1980s (casinos, hotel gaming, TABs, Tattersalls)
has introduced the profit imperative which arguably has come to
dominate public interest objectives.
While the UK Government's current policy does
not propose an increase in the number of machines in hotels, the
Australian experience suggests that the government will be strongly
pressured in the near future to alter this policy as hotel patronage
and income fail to keep pace with other licensed venues.
Consideration should be given to regulatory
instruments that will both maximise community benefit and discourage
commercial practices that could have adverse community impacts.
A combination of regulatory incentives and disincentives (eg preference
to non-profit organisations in licensing, higher taxation of private
and high-profit providers) has achieved a more acceptable balance
between the potential benefits and costs of gaming in some Australian
jurisdictions. On the other hand, policies in Victoria and South
Australia that have allowed hotels an equivalent number of gaming
machines to clubs have been identified as factors contributing
to social problems in those states.
I strongly urge the Joint Committee to reconsider
the proposed policy to allow Amusement With Prizes (AWP) machines.
Australia does not allow such machines—for
the obvious reason that they expose children to gambling and that
this is not consistent with prohibitions on other forms of underage
gambling. The Joint Committee should be mindful that this policy
has the support of the Australian community which enthusiastically
embraces gambling as a normal recreational pastime (85% of Australians
gamble) and where schools celebrate the Melbourne Cup race as
a national cultural event.
I recognise that reversal of established policy—putting
the genie back in the bottle—presents political and economic
challenges in the short term. But these must be weighed against
the long-term social consequences of allowing such activities—and
the potential for this industry sector to lobby for further concessions.
CASINOS
The introduction of "resort" casinos
to the UK will require a regulatory regime at a significantly
higher level than has existed previously in the UK. The NSW Casino
Control Act and the Victorian Casino Control Act provide relatively
effective models.
When considering the legalisation of casino
gambling, Australian governments without exception concluded that
the US casino regulation model was deficient in many respects
and did not meet Australian community standards of commercial
probity, conduct and accountability. Even with the higher standards
introduced in the 1990s casinos, regulatory failures have been
reported, requiring improved procedures and scrutiny.
Australian governments have also extracted high
"rents" and other benefits as price for the monopoly
casino licences. The prescribed requirements and competitive tendering
process for monopoly licences for Star City Casino, Brisbane Casino,
Adelaide Casino and Crown Casino all resulted in regeneration
of rundown city areas.
However it must be emphasised that the exclusivity
attached to these licences was a critical factor in attracting
high bids on one hand, and minimising adverse impacts from over-development
on the other. Contrary to theories of market economists, this
"Australian model" of restricted casino development
works—in terms of achieving high regulatory standards, community
benefit and harm minimisation.
ONLINE CASINOS
Online casinos can and should be regulated to
ensure high standards of probity, accountability and consumer
protection. The AUSModel (2001) provides constructive guidelines
for regulation and harm minimisation although it may need updating
to use the full range of technological regulatory tools.
As I have argued elsewhere, the current Australian
policy towards online casinos is fundamentally inconsistent and
morally indefensible. I am not convinced that prohibition, whether
directed towards providers or consumers, is effective for this
form of gambling.
Despite current restrictions, my research has
shown that Australians continue to gamble with offshore online
casinos that may not provide the safeguards which Australian gamblers
have come to expect.
BINGO
Although theoretically it was illegal, bingo
(also known as "housie") was a very popular and accepted
gambling activity in Australia until the 1970s—commonly
run by the Catholic Church for charitable purposes. The introduction
of more commercial forms of gambling, particularly gaming machines,
has reduced bingo to a marginal activity.
Where it has survived, bingo is now primarily
conducted in gaming clubs by community groups, or commercially
by bingo management companies. The game has been unable to compete
with other forms of gambling.
WAGERING
Wagering should be subject to similar regulatory
standards and requirements as gaming.
Importantly, the regulatory systems for wagering
in Australia do not meet the basic standards set for gaming (McMillen
et al 2001a). For decades the racing industry and TABs (totes)
have successfully argued that there are material differences between
gaming and wagering. A key argument is that unlike gaming operators,
who conduct the gambling (provide the service) and also control
the outcome of the game (the product), licensed bookmakers and
TABs are required to be totally isolated from the outcome of the
event. The considerable risks to the wagering public and to the
sporting codes have not, in my view, been adequately addressed
in either the UK or in Australia (McMillen 2001).
Yet recent large population surveys in Australia
have shown an increase in problem gambling associated with wagering,
particularly among young males (McMillen et al 2001b; Queensland
Household Gambling Survey 2001; McMillen et al 2003). This corresponds
to an increase in wagering participation and the development of
new betting products by commercial providers. Expenditure on sports
betting for example, increased by almost 50% in 2001-02 (Australian
Gambling Statistics 2003). However, few wagering providers have
developed responsible gambling strategies comparable to those
required of gaming operators. My review of UK online bookmakers
suggests this is also true in the UK.
The growth of TABs as the dominant betting agent
has had significant impacts on bookmakers—who are in decline,
both numerically and in terms of market share—and the racing
industry itself. The TABs dominate racing policy and have progressively
exercised influence over the conduct of racing, telecasting etc.
Track attendance has declined, regional racetracks are closing
and new betting products (such as randomised `mystery bets' similar
to lottery games) have been introduced to attract new customers.
TABs in NSW and Victoria have also expanded
into gaming operations. Tabcorp (Victoria) for example, also operates
50% of the gaming machines in Victoria, Jupiters Casino and Star
City Casino.
BETTING EXCHANGES
Betting exchanges should be licensed and regulated
in a similar manner and to same standards of probity and player
protection as for online casinos (see for example, AUSModel 2001).
My research has shown that a growing number
of Australians are accessing internet UK betting exchanges, despite
efforts by some regulators to discourage this practice (McMillen
2002, 2003; Woolley 2003). Without detailing reasons discussed
elsewhere, I am not convinced that proposed regulations to prohibit
betting exchanges or prevent Australians utilising their services
will be effective.
More realistic and important regulatory issues
are whether betting exchange providers meet satisfactory licensing
and operating standards; whether they provide adequate consumer
safeguards and player protection; and whether this form of betting
will contribute to the incidence and/or prevalence of problem
gambling. These issues can and should be regulated.
PROBLEM GAMBLING
AND HARM
MINIMISATION
It is now belatedly acknowledged that while
the various gambling industries make a significant contribution
to the Australian economy and to the revenue of Australian governments,
gambling can also have harmful impacts on finances, families,
psychological wellbeing and the community as a whole. Research
has consistently found that gaming machines in particular, and
to a lesser extent casino games and wagering are associated with
unacceptably high levels of problem gambling.
Importantly, in Australia problem gambling is
no longer viewed from a medicalised perspective as an individual
"addiction". Research has consistently found that problem
gambling can affect any gambler; there are no apparent psychological
or psychiatric predictors. The Productivity Commission also found
gambling problems can occur anywhere along a continuum from low
to severe. Problems can also occur in "at risk" families
and vulnerable communities.
This broad redefinition of the problem has meant
a reconsideration of policy solutions. Australian responsible
gambling strategies do not focus mainly on treatment programs
for individual gamblers; they extend to prevention, rehabilitation,
community education and community engagement. In effect, problem
gambling is seen as a complex public health issue requiring a
multifaceted approach which emphasises prevention. The onus is
on government and industry to minimise the potential harm and
create a safe gambling environment.
It is regrettable that the responsible gambling
initiatives of Australian governments and some industry operators
have not been more directly acknowledged or considered in the
United Kingdom. For example, information on Australia in Towards
a Strategy for Addressing Problem Gambling in the UK (pp 46-50)
is incomplete and significantly out of date. Importantly it neglects
the numerous innovative programs introduced since the PC's 1999
report.
In many respects Australian responsible gambling
strategies go far beyond anything in other countries. As with
other aspects of gambling regulation, however, these harm minimisation
programs feature both common strategies and considerable diversity
and variation. Programs in some states (eg Queensland, the ACT)
far more progressive and comprehensive than in others. Moreover,
whereas some states have taken a mandated approach (NSW, ACT),
others have been able to achieve more through cooperation and
collaboration (Queensland). Similarly, some gambling operators
have been more willing to embrace the objectives of harm minimisation
than others who have publicly resisted calls for reform.
Yet in all cases, it required action by governments
and/or the prospect of direct regulatory intervention before all
industry sectors accepted that changes to past practices were
required. There's no evidence to suggest that self-regulation
by any operator has achieved, or would have achieved, the standards
now expected by governments and the Australian community.
It must also be said, however, that there little
evidence to indicate which harm minimisation strategies are effective
and which are not. Independent program evaluation has begun only
in a small number of jurisdictions (eg Queensland, ACT, Victoria),
where it is too soon to reach any firm conclusions.
Yet this is no reason for not using the best
available information and research to attempt to address the problem
in policy and regulation.
ACCESS
Access to gaming machines is recognised in Australia
as a critical factor in problem gambling. The concept of "access"
is complex, however, involving more that simply machine density
(number of machines per adult capita).
The Australian experience suggests that limiting
the number of machines (eg venue caps) is a weak regulatory tool
to minimise harm if the machines are readily accessible in several
local venues. Rather, the location of machines (eg away from areas
of community congregation) and the aggregate potential impact
of gaming on local communities have become critical considerations
by licensing authorities in Queensland, ACT and Victoria.
Regulators in those jurisdictions, and more
recently NSW authorities, now require community impact statements
(CIS) to be submitted by applicants seeking additional gaming
machines or new licences. As noted in A Safe Bet for Success,
gambling can change the nature of cities and have serious social
and economic consequences in vulnerable communities. In my experience,
if the CIS process is properly conducted with clear guidelines
and informed assessment of applications by the Commissions, it
is a powerful regulatory tool that at the very least encourages
industry sensitivity to the potential impacts of their business
and community participation in the licensing process. If the process
of social impact assessment is mismanaged or deficient, however,
it can become merely a token gesture that masks and legitimates
decisions contrary to the public interest.
In Australia, this process has been managed
in different ways in various jurisdictions. Again the UK would
benefit from an assessment of these different approaches to guide
the policy choices made.
GAMBLING INDUSTRY
CHARITABLE TRUST
Based on the Australian experience, the research
and funding programs of industry-based or government-based trusts
tend to favour projects that do not question/challenge gambling
development and impacts (at best) or complement gambling activities
(at worst). Examples are numerous and include the Burswood Resort
Casino Trust; the VCGA's research program; the Casino Community
Benefit Trust in NSW.
These tendencies can be partly minimised by
precise terms of reference, accountability requirements and effective
community representation on the Board of Trustees. Independent
public auditing of the Trust's performance, measured by social
as well as economic criteria, is essential.
I trust that these observations will assist
the Committee. Thank you for your consideration.
February 2004
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