Is There Need for More Federal Government Oversight of Gambling?

1. Is There Need for More Federal Government Oversight of Gambling?  Assoc. Prof. Linda Hancock Deakin University Linda.Hancock@deakin.edu.au

2. 4 main sections 1. Comparative federalism- Canada & Australia • What’s similar, what’s different- comparative federalisms? • Which states/provinces lead/lag on RG? • ? A progressive national agenda? 2. Why Australian national policy reform merits attention • PC inquiries 1999, 2010 reports • Hung parliament-Wilkie agreement • Joint Select Parliamentary Committee hearings - pre commitment

3. Cont… 3. Reformist National Action Plan (Hancock and O’Neill 2010) Key question: what is jurisdictionally possible? What can the Federal govt. do? 4. What can Canada and Australia learn from each other to progress RG national policy and oversight?

4. Australia: 200,000 EGMs- $19b NGR

5. Canada • 92,266 casino + VLT machines • $14b GGR industry 2009 • Approx. 32million people cf Aust 21 million •  Australia “more intensive” gambling scene but many similarities

6. Club in Melbourne beachfront suburb

7. Hotel in Melbourne-sharing a carpark with hardware supply warehouse and liquor store

8. Hotel in Geelong (regional city)

9. New style ‘club’ on the urban fringe-Melbourne

10. Example of a hotel: The Sphinx

11. Crown Casino-Largest casino in Aust.

12. 1. Federalism in Australia and Canada • Federalism – intergovernmental relations • What’s similar • What’s different? • (Aust) From cooperative to managerial federalism • Ministerial Council (ineffective) • COAG • Canada Interprovincial Lottery Corporation – RG cooperation: legal, technol, RG • Which provinces/states lead/lag on RG?

14. What are the key questions for a progressive Federal agenda in gambling public policy? • Australian & Canadian govts and regulators espousing RG • Important for national agendas in RG? • Consumer protection • Product safety • ‘Public interest test’ • effective anti money laundering • Operator duty of care • Independent regulation • Independent research

15. 2. Why Australia is of international interest • Gambling intensity-harms • National PC inquiries 1999, 2010 • Joint Select Parliamentary Committee

17. Intensity of Gambling in Australia • Mix of community accessible and casino (CBD) gambling • 13 casinos - 78% reliant on gambling revenue • 200,000 gaming machines • 5,700 hotels and clubs with EGMs • Hotels 28% reliant on gambling revenue • Clubs 61% reliant on gambling revenue • 4,500 TABs • 4,700 lottery terminals • Changes in industry structure: • Gaming machines and casinos from 40% to 75% over 20 years (next slide).

19. EGMs the ‘problem’ • EGMs contribute two-thirds of NGR from all gambling; • Concerns about intensity of EGMs, frequency and duration of play • local accessibility • Hours of opening • High per capita density of EGM (1:110) (cf. Canada 1:366 people), • high per capita losses and high state government dependency on tax revenue; • Association between SEIFA, NGR, disadvantage, low income and number of EGMs; • Highly regressive tax, 40% of revenue from problem gamblers (P, 2010) • Recognised negative IMPACTs- suicide, depression, crime, embezzelment, etc. Community holds belief EGMs “do more harm than good”, oppose expansion of industry, identify broad social costs.

20. PC EGMs  Problems

21. EGMs most associated with loss of control (PC)

22. PC Inquiries • PC inquiry landmark 1999 report- flagged problems ‘problems remain of an order that warrant continued policy attention” • 10 years on PC report on Gambling 2010 • Brings together the data and the evidence on harms/EGMs as the problem • Estimated costs of gambling $4.7b per annum • Major reforms to ‘slow down the machines’ ($1 per button push and max. $20 note acceptors) • Identifies the problem with gambling environments  technology (Machine design + game features), venues, accessibility, machine features + personal risk factors can lead to harmful outcomes (alcohol consumption  alcoholism); • PC Recommends internet liberalisation but govt rejects • Confirms the ineffectiveness of State/territory RG reforms and weak regulation • argues for a consumer protection/public health model

23. The 'policy window' opens……. • 2010 national Australian election • Policy ‘window’ • Independent (Wilkie) brokers deal for Commonwealth govt. to address gambling • Senate Greens (from July 2011) and independents supportive of reform agenda

24. Wilkie Agreement with PM Gillard • Pre-commitment scheme consistent with PC • commence in 2012 - full scheme in 2014. • poker machine dynamic warning displays and costs of play displays. • ATMs in gaming venues to have a maximum withdrawal limit of A $25 (excludes casinos) • If states do not agree "[federal] government will unilaterally seek to legislate in order to achieve the reforms..... if required the government will support Commonwealth legislation through parliament by budget 2012.”

25. Joint Select Committee on Gambling • PC recommendation on pre-commitment • PC pre-commitment 'is a strong, practicable and ultimately cost-effective option for harm minimisation'.   • PC recommended a phased implementation of full pre-commitment systems on all machines in all jurisdictions by 2016.   • Govt proposes a ‘partial (non-binding) pre-commitment system be adopted by 2013., a full pre-commitment system would be in place by 2016’ (with an exemption for smaller venues until 2018). • To report May 2011

26. 3. National Response- What can a federal govt do? • Jurisdictional variations hard to justify, lack of transparency in decision making, non-dissemination of research/information, weak focus on consumer outcomes, conflict of interest, etc;  HENCE  • Need for Australian Government to take a greater leadership role”, potentially use corporations powers and activate other national competencies. (Hancock & O’Neill 2010)

27. Methodology • Rake through federal competencies eg corporations powers • Corporations powers, Trade Practices Act • Legislate for venue statutory duty of care and consumer redress? • Analyse govenance mechanisms • Identify bargaining power in inter-governmental transfers $$ • Harmonise to highest standard of CP • PC report Governance Structures Government Funded Research  Policy Model to underpin Re-regulating gambling

28. Action Plan Recommendations (Hancock & O’Neill) • New national consumer protection and product safety standards • New product safety standards • ‘License to operate’ reforms • duty of care to customers and employees, • venue obligation to ascertain probity of funds being gambled • The ban on interactive (internet) gambling should be maintained, and ATMs and other sources of finance be banned from gambling venues;

29. RECOMMENDATIONS (continued) • A new Independent National Gambling Research and Probity Commission, financed by the National gambling Fund – WITH a national player tracking system to monitor abnormal playing patterns; • Establish an MOU between the Australian Crime Commission and the INGRPC re using the player tracking database to detect money laundering and other criminal activity.

31. Weaning the States off Gambling tax How To Fund a National Reform Agenda? - Establishment of a National Gambling Fund financed by 2% industry levy (Increasing public acceptance of a ‘super-profits’ tax eg. Mining; years of tax concessions to gambling industry) - A new national lottery (one of the least harmful forms of gambling); - Modification of Commonwealth Grants Commission funding formula to provide state governments an incentive to reduce their reliance on revenue from gambling;

32. The National Action Plan for the Commonwealth to Re-regulate Gambling Essential elements : • Product safety/regulation, venue responsibility, • Industry obligations-license to operate, • Governance: Independent Regulatory oversight-national level (eg mystery shopping, real enforcement), • National agenda for Independent research, evidenced based policy, independent audit/monitoring.

33. What can Canada/Australia learn re federal agenda? • Duty of care jurisprudence • Eg Ca Supreme Court and Aust High court alcohol cases • Loyalty tracking: RG and money laundering detection AUSTRAC/ FINTRAC • National machine safety standards • What is a recreational level of EGM use? • Auspice for Independent regulatory oversight? • Auspice for Independent national research

34. Is this a window? • On December 15, 2010 the Canada Consumer Product Safety Act received royal assent and is now Canadian law. • The Act: • prohibits the manufacture, importation, advertisement or sale of any consumer products that pose an unreasonable danger to human health or safety; • requires industry to report serious incidents or deaths related to a consumer product and to provide the government with information about product safety issues; • requires manufacturers or importers to provide test/study results on products when asked; • allows Canada's minister of health to order recalls of consumer products; and • imposes significant fines and penalties for non-compliance with the Act.

35. Report refs: • PC 2010 www.pc.gov.au › Projects › Gambling • “Risky Business:Why the Commonwealth Government Needs To Take Over Gambling Regulation”, Alfred Deakin Research Institute. Working Paper 11. http://www.deakin.edu.au/alfred-deakin-research-institute/publications/workingpapers.php • Joint Select Parliamentary Committee on gambling http://www.aph.gov.au/senate/committee/gamblingreform_ctte/precommitment_scheme/info.htm