Is There Need for More Federal Government Oversight of Gambling?

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Is There Need for More Federal Government
Oversight of Gambling? 

• Assoc. Prof. Linda Hancock
• Deakin University
• Linda.Hancock_at_deakin.edu.au

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4 main sections

• 1. Comparative federalism- Canada Australia
• Whats similar, whats 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

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Cont

• 3. Reformist National Action Plan
• (Hancock and ONeill 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?

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Australia 200,000 EGMs- 19b NGR
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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

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Club in Melbourne beachfront suburb
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Hotel in Melbourne-sharing a carpark with
hardware supply warehouse and liquor store
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Hotel in Geelong (regional city)
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New style club on the urban fringe-Melbourne
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Example of a hotel The Sphinx
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Crown Casino-Largest casino in Aust.
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1. Federalism in Australia and Canada

• Federalism intergovernmental relations
• Whats similar
• Whats 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?

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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

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2. Why Australia is of international interest

• Gambling intensity-harms
• National PC inquiries 1999, 2010
• Joint Select Parliamentary Committee

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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).

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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 (1110) (cf.
  Canada 1366 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.

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PC EGMs ? Problems
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EGMs most associated with loss of control (PC)
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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

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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

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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.

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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

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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 ONeill 2010)

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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

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Action Plan Recommendations (Hancock ONeill)

• 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

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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.

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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

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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.

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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

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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.
•  

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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-in
  stitute/publications/workingpapers.php
• Joint Select Parliamentary Committee on gambling
• http//www.aph.gov.au/senate/committee/gamblingref
  orm_ctte/precommitment_scheme/info.htm