Treasury too close to manage gambling industry

Jane Rankin-Reid

Boyce has long argued that Treasury’s role in managing Tasmania’s gambling industry is too close for comfort. Given that the state receives up to 11% of its annual revenues from gambling, inherent conflicts in industry regulation and problem gambling management continue to loom. The state government’s Betfair licensing agreement with Federal Hotels, extending the company’s monopoly on Tasmania’s 3,650 poker machines until 2023 was not offered for tender, diminishing the price Federal paid the state for its license. Boyce cites Citibank director of equity research Jenny Owen’s view that “Federal Hotels should pay the State government $130 million for its exclusive 15-year pokies deal in Tasmania.” This figure is deliberately conservative, he believes. “I’d go further”, says University of Tasmania’s Senior Law lecturer Michael Stokes. “Clean institutional boundaries are an absolute necessity in small communities like Tasmania. The breech of deed issues raise serious questions.” If Tasmania is not making enough money out of its Federal license, “it is a damning indictment,” he believes. “The government can really only evaluate the economic and social impact of poker machines if it abolished gambling taxes altogether.”


TASMANIAN author Dr. James Boyce, a leading social policy consultant researching problem gambling, is disappointed with Treasury’s newly released “Social and Economic Impact Study into Gambling in Tasmania” report. There are basic problems with the research methodology he argues. “Telephone prevalence studies notoriously under-estimate problem gambling because they require self identification, which wouldn’t occur in any other diagnostics research”. Using landlines automatically excludes low income pre-paid mobile users. “Comparing Tasmanian problem gambling with national statistics is false reassurance. Outside the indigenous community, Tasmanians are the poorest Australians on a whole range of social and economic indications.”

Boyce has long argued that Treasury’s role in managing Tasmania’s gambling industry is too close for comfort. Given that the state receives up to 11% of its annual revenues from gambling, inherent conflicts in industry regulation and problem gambling management continue to loom. The state government’s Betfair licensing agreement with Federal Hotels, extending the company’s monopoly on Tasmania’s 3,650 poker machines until 2023 was not offered for tender, diminishing the price Federal paid the state for its license. Boyce cites Citibank director of equity research Jenny Owen’s view that “Federal Hotels should pay the State government $130 million for its exclusive 15-year pokies deal in Tasmania.” This figure is deliberately conservative, he believes.

“The sky will not fall in if the Government reviews the number of poker machines allowed in Tasmania, properly regulates the industry and charges a full market licence for the privileged licence holder,” Boyce argues.

Since issued in 2002, the terms of the licensing agreement between Federal and the State government has been altered on up to three occasions. Federal has revised its Coles Bay development plans from a 150 bed tourism facility accommodating mid priced tour bus visitors, to a 22 bed luxury travel experience. Federal’s boutique hospitality venture will almost certainly employ fewer locals than initially agreed.

“I’d go further”, says University of Tasmania’s Senior Law lecturer Michael Stokes. “Clean institutional boundaries are an absolute necessity in small communities like Tasmania. The breech of deed issues raise serious questions.” If Tasmania is not making enough money out of its Federal license, “it is a damning indictment,” he believes. “The government can really only evaluate the economic and social impact of poker machines if it abolished gambling taxes altogether.”

Liberal Opposition leader Will Hodgeman is committed to modeling sustainable revenue alternatives to compensate for a reduction of poker machines from 3,650 to 900 he’d like to see in the years ahead. “I’m highly conscious of the destructive impact problem gambling causes on people’s lives”. Hodgeman is also alarmed by the lack of details the government has supplied about changes in the Federal licensing deed.

In a statement, Greens Shadow spokesman for Gaming Kim Booth said the Government’s report “cannot state unequivocally that there has been economic benefit through the prevalence of gambling activities…it is incumbent on the government to prioritise policy that protects the community, especially now that we know that the so-called economic justification that we’ve been fed for so long is flawed.”

Alarm bells are also ringing loudly amongst Tasmania’s leading problem gambling support providers. Anglicare’s CEO Bishop Chris Jones “can’t believe we’ve waited three months for this report and the government hasn’t yet formulated a harm reduction response. We ought to be looking to reduce the problems poker machines are causing in our community.” Jones is worried that as Treasury says it will now seek the gambling industry’s response to the report, the issue of the impact of problem gambling will be further diluted. “Has the government ever declined a new poker machine?” he asks.
Up to 83% of Tasmanians are now against poker machines in our communities, Boyce says. Victoria has an average of 101 adults per poker machine, whereas Tasmania’s concentration of poker machines is one of the highest in the world, with one for every 84 gambling age adults.

Jane Rankin-Reid