Social and Economic Impact Study Into Gambling in Tasmania
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SOUTH AUSTRALIAN CENTRE FOR ECONOMIC STUDIES ADELAIDE & FLINDERS UNIVERSITIES Social and Economic Impact Study into Gambling in Tasmania Volume 1 Final Report Report commissioned by Department of Treasury and Finance Tasmania Report prepared by The South Australian Centre for Economic Studies June 2008 PO BOX 125, RUNDLE MALL, SOUTH AUSTRALIA 5000 PHONE (+61-8) 8303 5555 FAX (+61-8) 8232 5307 LEVEL 2, 230 NORTH TERRACE, ADELAIDE Social and Economic Impact Study into Gambling in Tasmania: Volume 1 Contents Contents Acknowledgements (i) Abbreviations (ii) Executive Summary (iii) Section A: Overview 1 1. Introduction 3 1.1 Background 3 1.2 Terms of Reference 3 1.3 Public submissions, consultations, data collection 4 1.4 Structure of the report 5 2. Understanding Social Impacts 7 2.1 Introduction 7 2.2 An overview of the main approaches taken in the literature 9 2.3 The economists approach 10 2.4 The sociologist/public health approach 10 2.5 The psychologist approach 12 2.6 Key issues arising from the literature 12 2.7 Concluding remarks 18 3. Gambling in Tasmania: History and Structure 19 3.1 Introduction 19 3.2 Racing and wagering: A brief overview 23 3.3 Lotteries 26 3.4 Casinos 27 3.5 Gaming machines 29 3.6 Tasmanian gaming licences 31 3.7 Other forms of gambling 31 3.8 Industry structure and companies 32 3.9 Industry size and characteristics 33 3.10 Conclusion 36 4. Changes and Trends in Gambling Behaviour and Participation 38 4.1 Total gambling 38 4.2 Racing and wagering 43 4.3 Lotteries 56 4.4 Casinos 60 4.5 Gaming machines 66 4.6 Other forms of gambling 73 5. Submissions Received for this Report 76 5.1 Introduction 77 5.2 Tasmanian parliamentary inquiry, 2002 77 5.3 Submissions for this report 80 5.4 Conclusions 96 The South Australian Centre for Economic Studies Final Report: June 2008 Contents Social and Economic Impact Study into Gambling in Tasmania: Volume 1 Contents (continued) Section B: Assessment of Economic Impacts 97 6. Economic Benefits and Costs 99 6.1 Our approach to assessment of impacts 99 6.2 Consumer spending 100 6.3 Investment 102 6.4 Transfer payments 103 6.5 Employment 103 6.6 Consumer surplus 103 6.7 Tourism 106 6.8 Conclusion 106 7. Quantifying the Economic Impact of Gambling 107 7.1 Introduction 107 7.2 Analysis of net economic impact 107 7.3 Impact of types of expenditure 112 7.4 Impact on investment 119 7.5 Consumer surplus 121 7.6 Conclusion 124 8. Employment in the Gambling Industry 125 8.1 Introduction 125 8.2 Overview of employment (Census) 125 8.3 Gaming machines 127 8.4 Venues with gambling facilities versus those without gambling facilities 133 8.5 Racing and wagering 136 8.6 Lotteries 140 8.7 Casino 141 8.8 Conclusion 141 9. Tourism 143 9.1 Introduction 143 9.2 The benefits 143 9.3 Visitors 145 9.4 Casino tourism 151 9.5 Conclusion 152 Section C: Assessment of Financial Impacts 155 10. Government Revenue, Payments and Administration 157 10.1 Introduction 157 10.2 Share of state revenue from gambling 157 10.3 Deed of Arrangement 2003: Taxation arrangements 158 10.4 Overview of taxes and revenue allocation 159 10.5 Tax rates in Tasmania 162 10.6 Betfair 165 10.7 Destination of gaming machine revenue 167 10.8 Community Support Levy 168 10.9 Conclusion 170 Final Report: June 2008 The South Australian Centre for Economic Studies Social and Economic Impact Study into Gambling in Tasmania: Volume 1 Contents Contents (continued) Section D: Assessment of Social Impacts 171 11. Problem Gambling in Tasmania: 2007 Prevalence Survey 173 11.1 Gambling participation 173 11.2 Problem gambling prevalence rate 177 11.3 Harms associated with gambling 181 11.4 Conclusion 183 12. Harm Minimisation 184 12.1 Harm minimisation framework 184 12.2 Venue-level measures 186 12.3 Tasmanian self-exclusion scheme 187 12.4 KPMG study of Break Even Services in Tasmania 191 12.5 New Zealand’s approach to harm minimisation 194 12.6 Smart card technology 196 12.7 Conclusion 198 13. Crime and Gaming Expenditure in Tasmania 199 13.1 Introduction 199 13.2 Crime and gambling 200 13.3 Community model studies 201 13.4 Under-reporting issues 201 13.5 Causality issues between gambling and crime 201 13.6 Hypothesis creation and methodology 202 13.7 Conclusion 208 14. Problem Gambling and EGM Expenditure in Regions 209 14.1 Socio-economic profile of Tasmanian regions 209 14.2 Statistical analysis of regional variation in EGM expenditure 212 14.3 Statistical analysis of regional aspects of problem gambler numbers 220 14.4 Conclusion 224 15. Valuing Social Impacts 225 15.1 Introduction 225 15.2 Forms of social impact arising from problem gambling 225 15.3 Assigning a value to social impacts 231 15.4 Conclusion 235 16. Social and Economic Impacts of Gambling in Tasmania 238 16.1 Introduction 238 16.2 Economic impacts 238 16.3 Financial impacts 242 16.4 Social impacts 243 16.5 Net impact 244 16.6 Conclusion 245 Section E: Future Research Framework 247 17. Future Research Framework 249 The South Australian Centre for Economic Studies Final Report: June 2008 Contents Social and Economic Impact Study into Gambling in Tasmania: Volume 1 Contents (continued) Bibliography 254 Appendix A: Terms of Reference 263 Appendix B: Invitation to Make Written Submission 264 Appendix C: List of Submissions 265 Appendix D: List of Consultations 266 Appendix E: Tasmanian Parliamentary Inquiry, 2002 267 Appendix F: Findings from the Productivity Commission (1999) report 269 Appendix G: Annex to Chapter 13 Crime 272 This report was prepared by the following researchers: Michael O’Neil, Executive Director Nicola Chandler, Senior Research Economist Anthony Kosturjak, Senior Research Economist Steve Whetton, Senior Research Economist Sarah Lindsay, Senior Research Associate Disclaimer: This study, while embodying the best efforts of the investigators is but an expression of the issues considered most relevant, and neither the Centre, the investigators, nor the Universities can be held responsible for any consequences that ensue from the use of the information in this report. Neither the Centre, the investigators, nor the Universities make any warranty or guarantee regarding the contents of the report, and any warranty or guarantee is disavowed except to the extent that statute makes it unavoidable. Final Report: June 2008 The South Australian Centre for Economic Studies Social and Economic Impact Study into Gambling in Tasmania: Volume 1 Page (i) Acknowledgements The South Australian Centre for Economic Studies wishes to acknowledge the contribution and valuable assistance provided to the research team by staff of the Department of Treasury and Finance and the Department of Health and Human Services. In particular, Mr Damien Febey, Assistant Director, Intergovernment and Financial Policy Branch and Mr Gavin Miller, Community Education Officer (DHHS) who acted as principal contact points throughout the course of this study. Staff employed in the Liquor and Gaming Branch (DT&F) and the Gambling Support Program (DHHS) supported the study in ways too numerous to mention. Ms Sue Steinbauer, Senior Research Officer of the Tasmania Police Department assembled a comprehensive data set to aid the researchers in examining broader social impacts of gambling. The research team conducted numerous interviews with stakeholders from the gaming and wagering industry, non-government human services agencies, gambling help service providers and local and state government agencies. Industry associations, members of political parties, local government and individual councils, clubs and gambling help service providers willingly assisted the study, meeting with researchers, providing information and administrative data. We record our appreciation to those organisations and individuals who provided written submissions for consideration by the research team. The Steering Committee ─ Mr Rob Nicholl, Deputy Secretary, Economic and Financial Policy and Ms Alison Jacob, Deputy Secretary, Human Services (DHHS) ─ provided helpful guidance and feedback throughout the course of this study. The draft reports ─ Volumes 1 and 2 ─ were provided to the Tasmanian Department of Treasury and Finance and the Department of Health and Human Services. Officers of these agencies provided helpful comments and suggestions that have been incorporated in this final report. In addition it was a requirement that the draft report be submitted to two independent peer reviewers. Both reviewers provided insights and valuable comments on the draft report which have in most cases been taken up. We record our appreciation of the contribution provided by the peer reviewers. Finally, to the many citizens of Tasmania who participated in the telephone survey and prevalence survey, we thank you for your contribution. Note: The Prevalence Survey was conducted in August and September 2007. It is referred to as the 2007 Prevalence Survey. The results of the survey are one component of the overall Social and Economic Impact Study and are reported in 2008. When referring to reporting of the results of the survey we use the term Prevalence Study (SACES 2008). The South Australian Centre for Economic Studies Final Report: June 2008 Page (ii) Social and Economic Impact Study into Gambling in Tasmania: Volume 1 Abbreviations ABS Australian Bureau of Statistics AHA Australian Hotels Association ARIA Australian Remoteness Index for Areas ATM Automatic Teller Machine CPGI Canadian Problem Gambling Index CSL Community Support Levy DT&F Department of Treasury and Finance DHHS Department of Health and Human Services GSP Gambling Support