Las Vegas Sun

April 21, 2018

Currently: 79° — Complete forecast

Australians are the world’s biggest gambling losers, and some seek action

Image

Asanka Brendon Ratnayake / The New York Times

Players at electronic gaming machines in Australia, March 26, 2018. Legalized gambling, including from electronic gaming machines known as pokies, is an important source of tax revenues for Australian states and territories.

MELBOURNE, Australia — In pockets of suburbia all across Australia, electronic gambling machines known as pokies await their many customers in pubs, hotels and sports clubs, as common a fixture as ATMs in a shopping mall.

But the unremarkable machines contribute to an extraordinary level of gambling. Government statistics show that they account for more than half of individual Australians’ annual gambling losses, a gargantuan 24 billion Australian dollars ($18.4 billion). On a per-capita basis, Australians lose far and away the most in the world: more than AU$1,200 ($920) every year.

Australia’s gambling losses per adult are more than double those in the United States, and around 50 percent higher than second-placed Singapore, according to H2 Gambling Capital, an analytics company.

As those figures swell, a public war is brewing between venue operators and people against gambling, with each trying to win the hearts and minds of state governments that rely on revenue from the machines.

Known colloquially as pokies, the electronic gaming machines are similar to slot machines seen in casinos elsewhere. Pokies are not the only major form of gambling in Australia — casinos account for around 20 percent of gambling losses here — but they remain by far the most profitable for operators and most damaging for gamblers, gaming opponents say. And they permeate small towns with a prominence that is unmatched around the world.

“What makes Australia unique is that we’ve allowed these machines to be embedded in our local communities,” said Angela Rintoul, a research fellow at the Australian Gambling Research Center, a government-financed organization. “We haven’t contained them just to casinos, where many jurisdictions in the world have.”

In Australia, the pubs, clubs and hotels that house the machines usually resemble typical English pubs, replete with a bar and dining area but with the addition of a dedicated gaming room.

“Often, Australians don’t realize it,” she said of the ubiquity of the machines. “It’s like being a fish in water.”

Their operators are often prominent community entities: Woolworths, one of Australia’s largest supermarket chains, is the biggest operator of pokies in the country, controlling about 12,000 machines through its majority stake in the Australian Leisure and Hospitality Group, a large company that encompasses bars, restaurants and wagering.

Though the Woolworths Group does not distinguish liquor sales from gambling revenues in its annual report, estimates suggest that it pulls more than AU$1 billion in revenue from the machines each year.

Other community mainstays also operate machines. In Victoria, the heartland of Australian Rules Football, 90 percent of Australian Football League teams operate their own pokies, generating more than AU$93 million in revenue last year.

Pokies are regulated on a state-by-state basis, instead of by the federal government. Western Australia is the only state or territory that bans the operation of pokies outside casinos.

State budgets are increasingly made up of revenues from the machines, and legalized gambling, including from pokies, accounted for 7.7 percent of total tax revenues for Australian states and territories in 2016. In some parts of Australia, gamers can deposit AU$7,500 into a machine in one transaction, and can lose more than AU$1,000 per hour.

A study conducted by Rintoul comparing two regions outside Melbourne found that the less wealthy one had twice as many pokie machines, and more than three times the per capita losses.

“The people who can least afford to be losing large sums of money are losing the most,” she said.

Rintoul described the casinolike methods used by venues to maximize revenue, including rewarding patrons with free food and drinks, and hiring part-time models as wait staff.

A visit to one gaming floor at a venue in Sunshine, the region Rintoul’s study focused on, revealed a busy gaming floor one recent Wednesday night. Gamblers placed “RESERVED” signs under their machines of choice, which Rintoul said reflected how frequent gamblers come to relate to the machines: picking favorites, and believing that a particular one can get “hot” or due for a win.

A few hours later, in Balaclava, a suburb on the opposite side of Melbourne, patrons filled the gaming room at an Australian Leisure and Hospitality Group venue open until 6 a.m. A large Woolworths supermarket across the road keeps foot traffic in the area high.

“We regularly had people tell us that they often ended up in a gambling venue even when they weren’t intending to gamble when they left the house,” Rintoul said.

In February, Andrew Wilkie, an independent Australian politician, published leaked documents from two whistleblowers at Australian Leisure and Hospitality revealing that the company had been secretly collecting data on frequent gamblers, including their favorite sporting teams, their relationship statuses and when they had the most money to spend.

Gordon Cairns, the chairman of Woolworths, said that the company was “very concerned” about the revelations and that the matter was being reviewed by external auditors.

In a country that has confronted other powerful industries by mandating graphic warnings on cigarette packages and cracking down on guns, some wonder why gambling has escaped tougher regulation. Critics say politicians are increasingly afraid to confront the growing influence of the gambling lobby.

The Rev. Tim Costello, a spokesman for the Alliance for Gambling Reform, compares pro-gambling bodies to the National Rifle Association in the United States in their ability to sway politicians.

Australians, he said, “say Americans have a blind spot on guns.”

“Here, we have a blind spot on pokies,” he added.

Pro-gambling groups frequently refer to Costello and other gambling opponents as “prohibitionists,” and are quick to point to support services they have developed for frequent gamers. They also argue that tighter regulation of pokies would lead to huge job losses at the venues that operate them.

The groups have increasingly flexed their muscles in state elections. Anti-gambling candidates who ran in Tasmania and South Australia this year faced a barrage of negative advertising from pro-gambling bodies.

In the runup to the South Australian election, the Australian Hotels Association — which counts Australian Leisure and Hospitality as a member — donated to several opponents of Nick Xenophon, an independent whose new party, S.A.-BEST, vowed to cut in half the number of pokies per venue, and institute smaller betting limits. After positive early campaign polling, Xenophon and his party ultimately failed to win a single lower-house seat. It was the first election loss of Xenophon’s 20-year career.

“How much influence they wield, it’s unhealthy,” said Frank Pangello, Xenophon’s media adviser in the recent election.

“They bought an election in Tasmania, they bought one in South Australia,” Pangello added. “They’re like the NRA in America: You take them on, they’ll crush you.”

The Australian Leisure and Hospitality Group declined to comment for this article or discuss whether it spent money on the Tasmanian and South Australian state elections. The hotels group did not respond to a request for comment.

Costello said that with governments so dependent on gambling revenues, it may be difficult to pass tighter regulation of pokies.

“The states are Dracula in charge of the blood bank,” he said.