Statutes Amendment Gambling Industry Regulation Bill in committee

Extract from Hansard

Legislative Council
29 May 2001

Mike Elliott
Leader Australian Democrats
Member of the Legislative Council

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The Hon. M.J. ELLIOTT: When the issue of a cap has been raised on previous occasions, I have argued that a cap in itself has no merit at all when there are so many machines already installed or already approved. If we are worried about harm being done, there are ample machines to do harm now. However, I have supported a cap in recognition of the fact that the community will get sensible about gaming machines in the very near future and that the rules that cover gaming machines will change. In particular, the level of super profits that some of the machines are making is not sustainable in the long term; that is, not sustainable in terms of the community tolerating them. To encourage the installation of further machines when it is likely that we will change their mode of operation would be unreasonable.

One of the things that will occur as a result of the formation of the independent gaming commission, presuming it is fully independent and does not have too many vested interests at work, is that it will recommend significant changes to the way gambling works in this state. If I am right in that and it has implications for the profitability of gaming machines, it would be unfair and unreasonable to allow further investment to go on, assuming that things will stay as they are. I do not think that anybody in this place believes that they will stay as they are for very long. I am prepared to support a temporary cap and, during the period of that cap, I hope that we will see some further significant change to the law.

The Hon. M.J. ELLIOTT: In relation to the introduction of gaming machines, the cat was let out of the bag and we are now busy trying to get it back in. I opposed the introduction of gaming machines and, unfortunately, everything that I feared would happen has happened-and more. Now that they are out there in the community, the major challenge is to try to make them work more fairly than they do at present. Unfortunately, it is a long, slow and tedious process and I believe that this parliament will be revisiting this issue annually for some time to come.

The Hon. M.J. ELLIOTT: I am talking about the experience now. There is extremely limited interactive betting happening in South Australia at this stage. I think the cat has stuck a claw out, but it is not out of the bag in relation to interactive betting operations. In my view, we should-

The Hon. M.J. ELLIOTT: Well, depending on the feeling of honourable members participating in this debate, this is quite capable of further amendment. It might be possible for a further amendment to allow some limited exemption in relation to an existing operation, as long as it does not expand it. So, let us not say that we are either for or against this clause; let us examine it.

I would hate to think that the cat does get out of the bag in relation to interactive betting and we have to go through the same sort of process we are going through now with gaming machines to try to rein it in and make it work fairly, so far as that is possible. On that basis, I will support the Hon. Nick Xenophon's amendment. The point that there may be a limited amount of it happening now may be accurate, but I am sure that it is not beyond the wit of this parliament to allow an exemption, even through regulation, to an existing operation in so far as it is not allowed to expand its operation in any way. At the very least, I believe this will give us the sort of breathing space that we are getting after the event with caps on poker machines, and so on.

Let us not make the same sort of mistake again; let us anticipate in advance what the problems will be. If a decision is ultimately made to allow it to occur, let us ensure that it occurs in a far better fashion than the other expansions of gambling that have been allowed in this state so far.

The Hon. M.J. ELLIOTT: This parliament has had no problems in the past ensuring that intoxicated persons are not served drinks. That is an onus that we have placed on people working in licensed outlets. We have done that in those circumstances because we realise that the serving of drinks to an intoxicated person whose judgment is already impaired is likely to do them or others harm. One would argue that allowing a person who is intoxicated to gamble would involve perhaps not physical risks but certainly significant risks to that person, their family or their employer in some cases, because their judgment is impaired. If we already require people who are licensed to sell liquor to show that sort of judgment, I think it is no greater test for people who are licensed in relation to this legislation-and they are quite onerous licensing requirements overall-than it is for people serving liquor. In those circumstances, I cannot see that this parliament should have any problems with supporting this amendment.

The Hon. M.J. ELLIOTT: I have no problems with what the Hon. Mr Xenophon wants to achieve with this amendment, but I agree with some members who have spoken in this debate that I do not think this is the place where it should be achieved. I also supported legislation to ban smoking in restaurants. I think that has been an outstanding success despite all the doom and gloom that was predicted beforehand. In fact, we were told that restrictions within hotels would mark the end of hotels. Clearly, that was not the case either. I do not think that it is any accident that in South Australia we are seeing a significant decline in the smoking rate, faster than in any other state, as I understand it. We are achieving some real success in this area, but it seems to me that a gambling regulation bill is not quite the place in which one would seek to regulate smoking. So, at this stage it is not my intention to support this amendment.

The Hon. M.J. ELLIOTT: As I understand it, once a code of practice is devised it will be promulgated through regulations. That enables parliament to say yes or no, but one of the problems with regulations is that the parliament is not in a position to amend them. It seems to me that if you feel something should have been there all you can do is reject it, even though you might agree with most of what is there. That is one of the unsatisfactory aspects of using regulation. It seems to me that, if you feel certain things must be addressed within the code of practice, you should be making them quite plain within this legislation. We might have arguments about 15 per cent or whatever else and the appropriate lengths, and it might have been more appropriate to use language more along the lines of the code of practice requiring that a telephone number of a problem gambling help line be prominently included within all advertising. That probably would have been sufficient, and the actual percentage of running time, etc.-if that is the way it was decided to go-is something that the developers of the code could have addressed.

I am attracted to the notion that, if there is to be advertising in relation to gambling, one of the things that should happen is that advice is provided as to where people may seek assistance. I will support this amendment on the basis that I support the underlying principle contained within it. If a majority of members of this place had been attracted the same way, I am sure we could have come up with wording that would have addressed the apparent problems that people raised. Some people are not offering amendments when they are complaining but are simply opposed without saying so. At this stage I am indicating preparedness to support the amendment as it stands, but I would be quite happy to support a further amendment if it made plain that a code of practice required a prominent display of a telephone number for a gambling help line.

The Hon. M.J. ELLIOTT: I am supporting many of the Hon. Nick Xenophon's amendments tonight, but this is not one of them. While it might be true that only 2 per cent of gamblers are problem gamblers, I suspect that on any one night 90 per cent of gamblers who go in are going to go out with less money than they started with, and if they were not thinking about banking it when they went in they will certainly not be thinking about banking the smaller amount they have by the time they are leaving. I do not think it is a service that is going to be used, and it is even less likely to be used by problem gamblers. I think that moves to perhaps limit the amount that a person might gamble by having gambling cards which limit the amount they can take from their accounts, and those sorts of actions, are very sensible ones. But, frankly, I do not think this would have any positive effect at all.

The Hon. M.J. ELLIOTT: I want to explore this claim by banks that it is not technologically possible. This stuff is software driven. The banks are quite capable of knowing how many dollars you have in your account and when you have gone one cent over-it is all in the programming. To suggest that they are not capable of putting a limit on a daily basis and that it is not technologically possible is an absolute nonsense. They may not be minded to modify their programs, because that would be a pain in the butt for them, but to say that it is not technologically possible, even the Treasurer would be aware that that is a nonsense. We are not talking about technology; we are talking about the writing of a program, and I would have thought a not particularly complex program at that.

The Hon. M.J. ELLIOTT: I would agree with comments that smart cards seem to offer the potential to play a role in harm minimisation. Following the previous speaker, the Hon. Terry Roberts, they also have the capacity to be abused, as well.

The Hon. M.J. ELLIOTT: That is right. The question is for whose benefit they exist; that will be the important thing. I do not know whether when the Gambling Impact Authority is established it will sit down and read all the debate so it can get some understanding as to what this parliament intended of its role. One would hope that it would perhaps have a look. We should be indicating that, if it considers allowing the use of smart cards, it must be for reasons of harm minimisation and for the convenience and well-being of the gambler, not the convenience and well-being of the operators.

Clearly, as long as you are putting cash in the machines the operator cannot track your gambling habits in a way which apparently is already happening in some gambling venues. So, they cannot monitor what you are doing, whether you have been back recently, whether or not you need a few inducements to get you back, etc. I would hope that smart cards are used for one purpose, and that is for the regulation of gambling and the minimisation of harm, and that they are not used in any way as a tool for operators to gather extra information or to encourage people to gamble further or to choose one venue over another.

The Hon. M.J. ELLIOTT: The sorts of things being proposed here by the Hon. Nick Xenophon are things that I have been arguing for for some time. There is no question that gaming machines have been refined and refined and refined to maximise profits. That is perfectly understandable. At the end of the day, as far as the owners are concerned, they are machines which are to make a profit. It is no accident that the machines in South Australia started changing over time in a number of ways.

As I understand it, one of the most obvious ones was that the denomination of a single bet be reduced so that the most common machines were the 1¢ and 2¢ machines, yet they were the most profitable because of what else happened within them. The psychology firstly got the players in because they had gone to a lower denomination machine and they were getting more bets on more lines. The fact is they ended up betting more money more rapidly than they were on the higher denomination machines that may have been betting on a single line.

The Hon. M.J. ELLIOTT: I didn't say that is necessarily the case: what I am saying is that a number of changes happened in collaboration. It was not the low denomination that caused the problem but the low denomination which they used to get people onto the machines thinking they were betting less, and then the introduction of multiple bets on multiple lines on a high denomination machine obviously was going to be a rapid loser but on a 1¢ or 2¢ machine it seemed to be fairly safe. I think the maximum bet on those 1¢ or 2¢ machines was up around $10 or more a single spin-or something approaching that.

The Hon. M.J. ELLIOTT: I think they were also able to double up and things like that as well; other things were happening as well. Without arguing about how big the final bet was, certainly the hotels found that these were far more profitable machines because people were losing money more rapidly. It was possible to refine the machines to do that, and any refinement being made to the games now is to get people to stay at the machine but also hopefully for them to lose as much money as possible.

If one is to talk about harm minimisation, one can ask what is the psychology at work within these machines that enables a person to lose control-and that is effectively what happens to people at these machines-and what are the things that might happen that would give back some of that control. Certainly, a break of five minutes gives one a chance to reflect. So long as the machine is running, you will not do much reflecting. The very fact that credits, rather than monetary amounts, are used is not an accident. It is important, for those who are trying to maximise the profits, that people are not sitting there thinking about how much money they have accumulated or lost so far but rather simply see a number of credits going up and down. Why else would they use credits instead of monetary amounts? What valid reason would they have?

It would be true to say that the more you are being told that you have won, logically you may know you have lost when you have won on one line and lost on five, but you still have the lights flashing and are being told you have won. There is a range of things we can do to games, and I would be hopeful that the Independent Gambling Authority will move rapidly to make suggestions in this area.

It seems that modification of the games is one of a few areas in which we can have profound effects. One is the suggestion of limiting the amounts that people might gamble in a night by the use of smartcards-that is definitely promising. The modification of the games themselves and the operation of the rooms generally, which are being addressed by some other amendments of the Hon. Nick Xenophon, are clearly another place in which, if we want to have a real effect on people with a gambling addiction, we will have to move. I indicate support for the amendment at this stage.

The Hon. M.J. ELLIOTT: I indicate support for this amendment, as I also supported a similar earlier amendment. I do not think that there is any question that a place which is in the business of selling liquor already has requirements under legislation to ensure that liquor is not served to intoxicated persons. It is no more onerous a task to ensure that that intoxicated person is not then engaged in gambling.

The Hon. M.J. ELLIOTT: I would have liked to hear a little more debate on each of these. At this stage, the only provision I am considering is proposed new section 53G. In my mind at least that issue is cut and dried. I do not believe inducements should be offered to get people in to gamble in the first place. I see it as being somewhat akin to moves made in the smoking area many years ago when we banned advertising and general promotion. We recognised that adults might choose to smoke, but we certainly would not allow people to encourage them to smoke. Not everybody who smoked got lung cancer, but you did make a decision that enough damage was done by smoking that it was good idea whilst not banning it to not encourage it.

It would be an entirely consistent approach in relation to gambling to distinguish between allowing people to gamble and providing inducements for people to gamble. In my mind proposed new section 53G is something on which we should not wait for recommendations from the Independent Gambling Authority; it is a matter on which we should be getting clear direction. In relation to the other matters, at this stage I am still to be persuaded.

The Hon. M.J. ELLIOTT: I want to make some comment in relation to licensees barring excessive gamblers. I think this should be an issue that will eventually emerge from the Independent Gambling Authority codes of conduct, etc. The behaviour of licensees is an issue that causes me great concern. When an individual has lost something like $100 000 into gaming machines at a single venue and the licensee's response while this is happening is to give birthday parties and an occasional free meal and drink, there are some significant issues of morality involved.

Some people would like to argue that gambling is immoral. I do not take that view but I do take a view that a licensee of a premises who knows that a person has a gambling problem and knows that that person has lost those sorts of sums of money and encourages it is a grossly immoral person in my view. Unfortunately, there are not just one or two, but quite a few licensees around this state who are prepared to siphon people's bank accounts into theirs; and they are doing nothing more nor less than that with these problem gamblers.

This is an issue that has to be addressed but I do not think that the issue is, ultimately, that the licensee `may' bar excessive gamblers. I would hope that the code of conduct has some very strict requirements that go beyond `may'. Some people like to argue that licensees do not know whether or not they have a problem gambler, or that some people might be able to afford it.

When you know this is happening in a country town, where this person is known to the owner of the business, and they know what they are doing to this person, there certainly are circumstances where it is not `may bar' but `shall bar' that becomes the more important issue. This is something that we cannot walk away from. I do not understand to this day how easily some people discount this 2 per cent of problem gamblers and do not seem to have any concerns about the morality of what is happening with these people nor the immoral behaviour of those people who are knowingly doing great damage to others-those people who are providing inducements and free meals, cashing cheques they are not supposed to cash, extending credit they are not supposed to extend, and doing all sorts of other things. I think too many people have been too blaze about this for too long.

Page 14, line 24-After `State' insert `(but not so as to prejudice the furtherance of the object set out in paragraph (a)).

I am saying that whilst both paragraphs (a) and (b) would exist as objects, they do not stand as equal objects, and that paragraph ( b) ultimately is subservient to paragraph (a). It is not to be ignored, but paragraph (a) prevails. In the first instance I will be supporting the knocking out of subclause (b), but should I fail in that respect I will seek to have that amendment agreed to.

When I first became involved in this debate about a gambling commission, I was certainly thinking in terms of a single body. However, my thinking over time in relation to that evolved and that was because I recognised that we might have the sort of problems that are starting to emerge in this bill. We have a single authority that has a dual function. It is both regulatory and monitoring impacts and making recommendations in relation to them. Those are two quite separate tasks, and to have got it right we should have had one body which had the regulatory role-the licensing, enforcement, and so on-and a quite distinct body that was largely advisory and providing advice predominantly to the parliament itself.

I have argued again here today that we will revisit gambling legislation on a number of occasions over the next couple of years. I should have hoped that we would have an independent body outside the licensing-policing role which simply monitors what is happening in the community, making recommendations to the parliament and perhaps providing advice in terms of appropriate codes of conduct and those sort of things.

I think that the dual role that we are giving the authority is the major mistake we are making in this establishment. Having called for the establishment of a commission, I am glad that we are now getting a body along those lines. Indeed, I think that there should have been two bodies, not one, and then we would not have this very clear conflict that is emerging in terms of these objects. These objects are capable of clashing, and I do not think that they are necessarily capable of being resolved internally. In fact, in my view, so far as there is a clash, that is something that should be resolved within this parliament, ultimately through legislation and regulations. But since we have only that one body, we must seek to ensure that, so far as there is a clash, we decide what are the most important goals that we are seeking to achieve. In my view, object (a) should prevail over object (b) in relation to this single body.

The Hon. M.J. ELLIOTT: The previous speaker, in winding up his comments, made the comment that this might be the most important clause in the bill. I will not argue about whether it is the most important clause but, certainly, it is a significant clause. Very early in debate on this amendment the Treasurer talked about the fact that this has all emerged from a consensus operation. That is paraphrasing but, effectively, that is what he said. I have had an opportunity to have a brief discussion with some people involved in those discussions and my understanding is that this amendment does not reflect any consensus that was reached within the groups that were having discussions. Indeed, I understand that what is before us was not insisted on by the AHA but perhaps by a couple of senior government people.

We have been told that this has emerged from consensus and that we should not tinker with it. In fact, this is not something on which there was agreement or any signing off on, or anything else. As I understand it, in the consensus-building discussions, this would be knocked out only to come back after it had been somewhere within the senior offices of the Liberal Party. It was put back in two or three times. It was not necessarily the AHA that was driving this but, in fact, senior government people.

I am quite outraged that we are being told that this is something on which there has been some consensus and that we should not rock the boat, when that statement does not reflect what actually happened. This clause is important and I am extremely disappointed that we should be misinformed in that way.

The Hon. M.J. ELLIOTT: On further discussion outside of this place, I understand that the thrust of what I said before was indeed correct. My understanding is that the non-government members at least of the consultative group were seeking to remove the words `objects' and the words `sustainable and'. So far as there was a consensus position that is closer to the consensus position than what is put here. What we have here is the government position as distinct from the consultative group's position. I think that it is important that that is on the record.

The Hon. M.J. ELLIOTT: I indicate support for the amendment. As I indicated previously, there is no question that some rogues are operating in the gambling industry and they are breaking the law on a number of occasions. It does not do the industry as a whole any good to have those people continuing to operate. Perhaps some of the organisations have been a little too tolerant of their own members' behaviour on some occasions and, in the process, they have not done those members who are doing the right thing a service. It brings the whole gambling industry into disrepute when some people are behaving in an improper fashion. I think it would be very sensible for the associations-whether they represent the industry or employees working in the industry, it would serve them all well-where they are aware of breaches occurring that those breaches should be reported to the authority.

The Hon. M.J. ELLIOTT: I recall in the earlier debate that the Hon. Paul Holloway tried to offer an example of the sort of thing where this provision would be necessary, and it seemed to be 40 gaming machines in the middle of the Flinders Ranges to which people fly across the world to visit. Frankly, what is the honourable member trying to achieve with this amendment? He has talked about projects that might come up. Hypothetically, let us come up with a real world case.

The Hon. M.J. ELLIOTT: Okay, but let's be real. Give us a believable scenario of something that is really going to happen that necessitates the clause.

The Hon. M.J. ELLIOTT: It is not under our control, it is not state land. It seems to me that, if he is promoting this clause because he believes there could be special circumstances, he should be able to give us one example of the special circumstances that would necessitate the clause. As I said, the only one he has come up with so far is something in the Flinders Ranges. Presumably, it is an operation of 40 poker machines and it will bring people from all over the world and, in those circumstances, it is so damn urgent that it needs to be done by regulation. It is not real world stuff.

I can understand why people are a bit nervous about it: they do not see that as being realistic, so they then say, `Well, if that is not realistic, what else can it be used for?' It is certainly capable of being abused, but give us an example of a real world case where we would really need a regulation to do what the honourable member is proposing?