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P1: OTA/XYZ P2: ABC c01 BLBK317/Orford September 17, 2010 12:59 Printer Name: Yet to Come Section I Gambling is Growing COPYRIGHTED MATERIAL P1: OTA/XYZ P2: ABC c01 BLBK317/Orford September 17, 2010 12:59 Printer Name: Yet to Come P1: OTA/XYZ P2: ABC c01 BLBK317/Orford September 17, 2010 12:59 Printer Name: Yet to Come 1 The Extraordinary International Growth of Gambling The pros and cons of gambling are a matter of dispute. Historically that state- ment has always been true and its continuing truth is becoming more and more evident as the early years of the twenty-first century go by. As I hope to make clear, the gambling controversy is an important one for society and for individual citizens and their families. There is one thing about which every- one is agreed however; that the last years of the twentieth century saw a quite staggering liberalisation and expansion of opportunities to gamble around the world. Although regulations governing gambling vary markedly from country to country, and even from state to state within a country, expansionary in- dustry pressure and the temptation for governments to raise money through gambling have been felt almost everywhere. We have seen ‘an unprecedented de regulation of gambling in numerous jurisdictions throughout the world’.1 By the end of the twentieth century gambling had become a ‘global player’ in the economies of many countries.2 The figures for numbers of electronic gambling machines (EGMs), expenditure on playing machines or on gambling generally, and the amount of tax collected by governments from gambling activities – and the increases in those figures in just one or two decades – are truly aston- ishing. Some of those figures are shown in Table 1.1. In this chapter let us look at what has been happening in three regions of the world where statistics on gambling have been collected. Australia, New Zealand and East Asia Australia One country in particular stands out as an object lesson to the rest of the world, illustrating the dangers of gambling expansion. There will be occasion to refer An Unsafe Bet? The Dangerous Rise of Gambling and the Debate We Should be Having By Jim Orford C 2011 John Wiley & Sons, Ltd 3 P1: OTA/XYZ P2: ABC c01 BLBK317/Orford September 17, 2010 12:59 Printer Name: Yet to Come 4 An Unsafe Bet? Table 1.1 Indications of the size of the gambling market worldwide and how rapidly it has grown: some examples Australia3 Total staked or wagered: Aus $95bn in 1999. Net expenditure on gambling: Aus $11bn (up from 4.5bn a decade earlier), representing 3.5% of household disposable income (up from 2% a decade earlier). New Zealand4 Total net expenditure on the four main forms of gambling (sports betting, lotteries, casinos, EGMs): NZ $2bn in 2003/04 (up from 570m a decade earlier). Total number of non-casino EGMs: 25,000 in 2003 (up from 7,000 a decade earlier). China5 Total lottery sales: equivalent US $10.5bn in 2006 (up from 2m two decades earlier). USA6 Total wagered on all forms of commercial gambling: over $0.5tn in 2000. Total net expenditure: over $60bn in 2000 (up from a.$10bn two decades earlier). Canada7 Gross revenue from gambling in 2004: C$12.5bn. Average adult expenditure on gambling: C$600 (up from $150 a decade earlier). Percentage of provincial governments’ income from all gambling revenues: 3.8% in 2004 (up from 2.1% a decade earlier). Germany8 Total gambling turnover 26bn euros in 2005. Government revenue from gambling 4.3bn euros in 2005 (up from 0.7bn in 1970 and 1.5bn in 1980). Italy9 Total gambling expenditure 35bn euros in 2006 (up from 8bn, relative to 2006 prices, in 1993). In 18 months up to 2000, 800,000 video poker machines were installed with a turnover of more than 20bn euros. to it often in the present book. That country is Australia. Not only have several of the Australian states brought in very liberal gambling regimes, with rapid expansion of gambling machines in particular, but also, on account of the concern that this has aroused, more research has been done and more written about gambling in Australia than in most other places. One of the most thorough and comprehensive reports on gambling and its effects in an individual country was the Australian Productivity Commission report of 1999. The report began by saying, ‘...even by Australian standards, the recent proliferation of gambling opportunities and the growth in the gambling industries have been remarkable’.10 Much of that remarkable growth was attributable to legalisation and rapid growth in the numbers of gambling machines, or what are commonly known in Australia as ‘poker machines’ or simply ‘pokies’.They are much more sophis- ticated than the simpler types of gambling machine that used to be the norm in Britain and elsewhere. Fully electronic, controlled by buttons or touch- screens, they enable people to bet on multiple lines (20 lines is not uncommon) and using multiple credits (or multiples of the nominal denomination of the P1: OTA/XYZ P2: ABC c01 BLBK317/Orford September 17, 2010 12:59 Printer Name: Yet to Come The Extraordinary International Growth of Gambling 5 machine). Each machine is capable of consuming in excess of AU $1,000 an hour.11 One estimate is that the number of EGMs in Australia rose in the decade prior to the Productivity Commission report from around 70,000 to approxi- mately 190,000.12 Ninety per cent of these machines existed in easily accessible locations, such as in bars, hotels and clubs. As one commentator put it, gambling proliferated in Australia, ‘despite having already been one of the world’s most heavily gambling provisioned na- tions’.13 The figures in the table show how the total expenditure of Australians on gambling rose between the 1980s and the end of the century, not just in billions of dollars but also in very real terms as an average percentage of disposable household income. In fact, so prominent a feature of the Australian economy was gambling in the 1990s that by the second half of the decade it was contributing over 10% of total state and territory tax revenues.14 By 2003 gross gaming revenues in Australia were equivalent to 1.9% of gross domestic product, considerably in excess of comparable figures for countries such as New Zealand, Canada and the USA and the European Union.15 One of the features of the new gambling scene is its mind-boggling complexity. Even those who make a special study of the subject find it difficult to keep abreast of what is going on in one country, let alone internationally. Australia provides a good example of that complexity, as it does of so many features of modern gambling. Gambling legislation is partly a matter for the Australian na- tional government and partly under the control of the individual states and territories. Hence, by the beginning of the new century the number of non-casino EGMs per thousand adults varied widely, from zero in Western Australia where they were only permitted in Perth’s one casino, to New South Wales (NSW) and the Australian Capital Territory with concentrations of more than 20 machines per thousand adults and per capita annual expenditures on EGMs of getting on for 1,000 Australian dollars.16 What happened in the state of Victoria provides a good example, repeated around the world, of the difficulty of holding the line against gambling expansion when gambling is more easily available in other jurisdictions nearby. An inquiry in the 1980s, influenced by what was seen in NSW, had recommended against the introduction of gambling machines but in the end a deciding factor was the obvious leakage of potential gambling revenue over the border into NSW where there were a number of very large social clubs with many poker machines and large parking areas for coaches.17 EGMs were legalised in Victoria in 1991 and by 1993 there were over 200 local gambling venues – half local pubs and half licensed social clubs – with over 13,000 poker machines.18 At around the same time legislation was passed permitting the set- ting up of a casino; the Melbourne casino opened in 1994 with 130 gaming tables and 1,200 EGMs, the latter number rising later to the legal maximum of 2,500. Although the state of Victoria was relatively late legalising EGMs compared to its neighbour New South Wales, and has a lower number of them per head of population, gambling in Victoria has been particularly carefully studied thanks to the development there of a well thought out public health campaign on the subject of gambling.19 Interestingly, the piece of legislation that allowed for EGMs was called the Gaming Machine Control Act, and it offers us a very good P1: OTA/XYZ P2: ABC c01 BLBK317/Orford September 17, 2010 12:59 Printer Name: Yet to Come 6 An Unsafe Bet? example of a jurisdiction responding to the need to monitor and regulate a kind of product which carries dangers. It provided for just two operators (Tattersall’s and Tabcorp) who were required to operate a centralised monitoring system that enabled all machines to be monitored 24 hours a day, recording all games played, amounts wagered, prizes paid and cash retained, thus providing security, aiding the operators in marketing decisions, and accessible to government regulators for financial control and auditing.20 As in most other Australian states and territories, caps were placed on the number of EGMs permitted overall or within particular localities.

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