Image for Poker machine apocalypse ... ?

*Pic: Michael Coghlan, Flickr

First published December 10

There seems little doubt the fate of poker machines post 2023 will be an issue that will get plenty of coverage during the upcoming State election campaign.

Depite the government assuring the Joint Select Committee into Future Gaming Markets it would be open to recommendations based on evidence, Premier Stansfield and Chief Strategist McQuestin had their minds made up well before the Committee reported.  The government arranged for a Dorothy Dixer on the 11th of September to allow the Treasurer to set out the government’s policy on gaming. If pokies are banned from communities it would have a “devastating effect on pubs and clubs” he told parliament.

Rather than blithely following the dictates of his political overlords the Treasurer should have read a paper prepared by his own department for the Committee.

A close analysis of Treasury’s modelling reveals in the case of regional areas beyond the 50 km reach of casinos where 40% ($42.9 million) of player losses occur, player losses will reduce by 75% ($31.4 million). There will be some migration to casinos and substitution with Keno, in total about 25%. Pubs and clubs will be worse off by $6.4 million, but the $25 million that previously flowed out of towns to Federal Hotels’ Network Gaming will be free to circulate within regional towns.

Currently on average, only 20% of player losses remain with pubs and clubs via net commissions from Federal Group’s Network Gaming. The rest flows out of town to Network Gaming. It is well beyond the wit of this writer to figure why the government is so willing to accept the dumb proposition that stopping the haemorrhaging of regional towns will have a devastating effect on those communities. It’s going to be very difficult to convince an electorate growing weary of political lies.

Regional pubs and clubs will be worse off by only $6.4 million. This is before any changes to their business models to attract some of the extra $25 million circulating in the community rather than being hijacked by Network Gaming.

In order to predict the effects on State taxation receipts, Treasury used different assumptions about player responses within 50 kms of the two casinos and in areas further away. It is a simple exercise to reconfigure the models to calculate changes in player losses, changes in venue income and the extra income that will accrue to communities, in each of those two broad areas, before having a revealing look at a few of the larger regional towns/cities.

This paper follows on from the writer’s last blog on the Treasury model ( HERE: Removing pokies ... ) and a subsequent request by Anglicare as to what conclusions can be drawn from the Treasury study about the effects in regional areas, and how the Treasury study reconciles with the Anglicare commissioned study by Prof John Mangan titled Removing poker machines from hotels and clubs in Tasmania: Economic considerations ( HERE ), presented as evidence to the Joint Select Committee. The remainder of this blog is the response provided to Anglicare’s request.

The Treasury paper titled …

Read more, Tasfintalk HERE

*John Lawrence worked as an economist, public accountant and a DIY Super consultant. Currently a public policy researcher and blogger. Am interested in promoting an understanding of finance and economic issues particularly those that confront the State of Tasmania.

• Stephen Menadue, in Comments: Thanks John. As if we didn’t already know that the flow on benefits to community would be great from getting rid of the pokies, the Government would have us believe that the increased employment and sporting group t-shirt funding would be of more benefit. A child waiting outside a Gaming Lounge for their mum or dad to finish inside paints a picture of exactly how many ways these machines are tearing apart families and values …

• John Biggs in Comments: … The relevance to this thread is that the Liberals and their mates are interested only in making money. The effects of pollution and poker machines on community health and welfare simply doesn’t matter. We should be very angry indeed about that and ensure that we chuck the rotters out next election …