Tasmania's pokie problem: stress and disadvantage exploited more than anywhere else in Australia

The Tasmanian parliament is in the middle of an inquiry into the way poker machines will be regulated and licensed after 2023. The inquiry’s terms of reference include:

Consideration of community attitudes and aspirations of the gambling industry in Tasmania, with particular focus on location, number and type of poker machines in the state.

Pokies in local Tasmanian pubs and clubs made over A$113 million in 2015-16. That’s an average of more than A$280 per adult. Not a huge amount, you might think. The problem is, the pokies aren’t evenly distributed. As we know from other research, pokies are concentrated in areas of social and economic stress.

If you live near a pokie venue, you are more likely to gamble, and suffer harm. The more profitable the gambling venue, the more likely it is to be associated with higher levels of harm. This includes escalated rates of family violence.

Any inquiry into poker machine regulations should arguably have some knowledge of where the venues and machines are located. It should also question whether this distribution is likely to maximise or minimise rates of harm.

We have been examining the distribution of pokies in Tasmania. What our research reveals is quite alarming. Australian jurisdictions generally have more pokies in socio-economically stressed neighbourhoods. But Tasmania’s pokie distribution takes this to a new level.

Our modelling

The Tasmanian Liquor and Gambling Commission publishes some data on the state’s pokie revenue and numbers. This has allowed us to identify the pattern of distribution at the local government level.

Unlike Victoria, the Tasmanian data do not provide details of expenditure (that is, player losses) at the venue level. Nonetheless, we have been able to undertake some relevant preliminary research.

Using the Australian Bureau of Statistics census-derived SEIFA index of relative socio-economic disadvantage, we plotted the relationship between socio-economic stress and pokie data. That is, the number of machines per 1,000 adults, and the average pokie losses per adult in each local government area where data were available. This included the combined municipalities.

The more disadvantaged a local government area is, the more likely it is to have many pokies.

The below graph shows this trend, which is strongly significant in a statistical sense.

The same is true for the relationship between the SEIFA index and the amount of money lost per adult on average, only more so. Here, disadvantage predicts higher expenditure.

In Tasmania, poker machines are operated by a monopoly, the Federal Group. According to their website, Federal is a “privately owned family company” belonging to the Farrell family. They operate both Tasmania’s casinos: Wrest Point in Hobart, and the Country Club near Launceston.

They either own and operate, or own and license, the operation of all poker machines in clubs and pubs. These arrangements are unique in Australia, and very uncommon anywhere else.

Our modelling shows that in Tasmania, the monopoly system has allowed operators to cherry-pick the market. This was also true in Victoria in the days of the pokie duopoly. Until 2012, Tattersalls and TabCorp between them ran the state’s pub and club pokies.

The oligopoly allowed them to locate pokies in areas where they made the most money. These tended to be where people were under socio-economic stress. The Tasmanian monopoly permits the same degree of control, and it appears to have been used to maximise revenue.

Pokies in Tasmania

The gambling industry inquiry has the potential to upset a few apple carts. It is conducted by a Parliamentary Joint Select Committee of six members. Three are upper house independents. From the lower house there’s one each from the governing Liberal Party, Labor, and the Greens.

There have been 148 submissions to the committee, mostly from individuals. However, gambling industry heavy-hitters, including Australian Leisure and Hospitality (Woolworths joint-venture pokie arm) and Clubs Australia, have made submissions.

This inquiry is garnering considerable interest in Tasmania. Groups such as Rein in the Pokies and Community Voice on Pokies Reform want pokies out of local pub and club venues.

Greg Farrell, managing director of Federal, told the inquiry in early February he believes the majority of Tasmanians don’t care about pokies, citing research conducted by his company. He said he wasn’t aware of contradictory research reported at table 14.2 of the Productivity Commission’s 2010 Gambling inquiry report. That research indicated that over 83% of Tasmanians wanted the pokies reined in.

We know now what pokies do, and how they do it. People under stress do not make more use of pokies because they’re weak or lacking in will.

Pokies use the brain’s reward mechanism to release dopamine. This mechanism is strongly linked to addiction, and, like narcotics, provides temporary relief from stress and anxiety. Pokies provide a perfect storm of addictive incentives. Locating them, or allowing them to be located, in areas where people are likely to be stressed and in need of relief represents a cynical and arguably exploitative way to make money.

We have presented the data to the Tasmanian committee. One thing that could be done immediately is increase the transparency of data to at least the level of disclosure provided in Victoria. Better data means better analysis and more scrutiny of a harmful industry. That would likely lead to better regulation and less harm.

For now, what is clear is allowing pokies to continue to be concentrated in Tasmania’s most stressed local areas will continue to cause preventable harm to tens of thousands of Tasmanians every year.