Gambling Industry Regulation Bill - Democrats propose major changes

Extract from Hansard

Legislative Council
28 July 1999

Sandra Kanck
Deputy Leader Australian Democrats
Member of the Legislative Council

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The Hon. SANDRA KANCK: In speaking a few weeks ago to the further noting of the Social Development Committee report on gambling I believe that I spelt out my position and rationale on gambling fairly clearly. I refer members to that speech so that I do not need to go over ground I have already covered. I have taken a position that the provision of and access to gambling is not of itself a sin and that more than 98 per cent of people who gamble do not have a problem. The figure of fewer than 2 per cent of gamblers having a problem was commonly repeated in evidence to the Social Development Committee during its 15 month investigation. The recently released report of the Industry Commission has basically confirmed that figure, although it has set it slightly higher at 2.33 per cent nationally and 2.19 per cent for South Australia, using the SOGS (South Oaks Gambling Screen).

The slightly higher figure that the Productivity Commission gives is explained by the fact that SOGS was the method used, whereas the Social Development Committee heard evidence that, although SOGS was internationally accepted as a method of assessing the degree to which a person has a gambling problem, it has its limitations as it was designed for the United States and can overestimate the extent of the problem in Australia. So, I remain confident in my assertion that 98 per cent of people who gamble do not have a gambling problem. The 2 per cent who do have a problem can, of course, provide some dramatic anecdotes. The front page story of the Advertiser last week is an illustration of that.

The Hon. M.J. Elliott: Add their families and that takes it to five or six per cent—

The Hon. SANDRA KANCK: And I do not downplay the impact on their families at all; but when we have to look at the assorted problems we are dealing with as a society—particularly for us as legislators—I look for instance at the damage that has been caused by the road toll and cigarettes and at the effect on the families of those people who are involved as being far greater than that caused by gambling. At the time of the tabling of the Social Development Committee report on gambling I was a signatory to that major report which did recommend, amongst other things, a cap of 11 000 gaming machines in this State.

In a Bill that we voted on earlier this year, I did not support that majority report. I know that the Hon. Mr Xenophon did not understand why I voted that way, because I did not speak on the Bill at that time. I will now take the opportunity to explain that, because it appears again in this Bill. I supported that major report at the time not because I believed it would achieve anything but because I did not feel strongly enough about it to go to the extent of moving my dissent and writing a dissenting report. However, faced with legislation to cap the numbers, I find that I have to take a stand and oppose it.

It was interesting to read an article in the business section of Saturday's Australian. The article was written by Terry McCrann, who said the `pokey crackdown, capital gains tax hysteria have a common parent'. Towards the end of the article he referred to what the Prime Minister said about the `shame' of the number of a poker machines we have in Australia, as follows:

Surely the number is the problem? Cut them, and you reduce the gambling? Yet Victorians with just 30 000 pokies manage to gamble almost as much as New South Wales, where there are 100 000.

Limiting the machines might do nothing to limit gambling—especially as the genie is well and truly out of the bottle. But it will certainly—and, indeed, already does—deliver a lovely monopoly profit to those lucky enough to own a machine.

There is no evidence to show that a reduction in the number of machines will reduce the incidence of problem gambling, and capping the numbers is nothing more than a way for Parliament to give some hotels an inbuilt advantage over others. Why would we want to do that? Each year hundreds of people are killed as a result of vehicle crashes and far many more are injured.

The Hon. SANDRA KANCK: No, I'm talking Australia wide. Anecdotal evidence speaks of suicide resulting from gambling addiction, although suicide figures do not show any increase. While providing good copy, these stories of gambling related suicides do not rank with the number of deaths on our roads. The cost to our community of the road toll is huge, the cost to our health system, in terms of emergency services, hospitals and rehabilitation, is equally huge, yet no-one talks of capping the number of vehicles on our roads because some people are incapable of handling the risks and responsibilities of driving. If no-one talks of capping—

The Hon. SANDRA KANCK: You have to look and see. When something is causing a danger (and that seems to be the argument of the Hon. Mr Xenophon), you have to try to restrict access to it or prevent those things from being there altogether. We are talking about a different machine here—a machine on wheels.

The Hon. SANDRA KANCK: I don't think it is, particularly when we are talking about the number of deaths involved. If no-one starts talking about the capping of vehicles on our roads because of the few people who make major mistakes in driving them—

The Hon. T.G. Cameron: Is this the new Democrat policy—to place a cap on the number of motor vehicles?

The Hon. SANDRA KANCK: That is not what I am saying. I am making a comparison so that members can see the idiocy of the argument to limit the number of poker machines. Limiting something because a few people cannot handle it is an illogical way of going about it. I do not know anyone who is advocating, for instance, that we remove most cars off the road, yet this Bill is saying that, comparatively, we need to remove all gaming machines from hotels in five years.

The Hon. SANDRA KANCK: We certainly do. We make them safe and things like that, and there are aspects of this Bill that I will support because—

Prohibiting gaming machines which allow rapid betting and pay out large amounts is another of the clauses in this Bill. I am reasonably comfortable with the idea of prohibiting gaming machines that allow rapid betting, but I am not so comfortable with the clause which deals with machines paying out large amounts, particularly when a large amount is deemed to be an amount of more than $50. In the in-house footy tipping competition here, it is quite possible to win $50 in a week, and although it is—

The Hon. SANDRA KANCK: Exactly; there are many gambling options where you can win $50 or more. You can win it through the TAB, SP bookies at a racecourse and Footybet yet, again, we are singling out gaming machines. I find this peculiar. In the evidence the Social Development Committee heard there was some suggestion that gambling on the thoroughbred, harness and greyhound racing was probably more addictive than gaming machines because those people who gamble in those areas see it as being a contest between themselves and other punters as to who has made the right choice. They regard it, I suppose, as a more intelligent form of betting and it is, therefore, much more addictive.

The Hon. SANDRA KANCK: I am not sure at whom that remark is aimed, but I am sure that the Hon. Mr Cameron will elaborate on that when he speaks. The Bill intends to prohibit interactive gambling. The term `interactive' is a strange one, and I know we used it in our Social Development Committee report. It seems to be a word that is synonymous with Internet gambling but even in our Social Development Committee report we did not elaborate on that and make it clear. But I think for most people, anyhow, that is what we are talking about: Internet gambling.

The evidence to the Social Development Committee about this form of gambling was probably the most riveting of anything that I heard in the 15 months of this inquiry. Mr Steve Toneguzzo, of Gaming Technology Services in Sydney, reminded us that large-scale gambling—the sort that we are used to—has a presiding regulatory authority but Internet gambling does not have such an authority, which immediately starts to pose some interesting questions. I will refer members to part of Mr Toneguzzo's evidence. He said:

Gaming is generally considered acceptable as long as it is contained to certain venues, does not result in criminal activity directly or indirectly, provides revenue for the Government and the social cost does not outweigh the benefits derived from revenue. Gaming on the Internet has the potential to defile all these criteria. Australians who currently go to the track, casino, pub or club could be gambling from their homes, pouring billions of dollars offshore and depositing any winnings into offshore accounts. The casinos' linked jackpots could be competing with global jackpots, the magnitude of which might be in the hundreds of millions. The Government may not realise any revenue, part of which is now used to fund the treatment of problem gambling, the incidence of which will escalate.

The Hon. SANDRA KANCK: I will deal with that in a very short time. There are numerous Internet casino sites already. Accounts can be easily established offshore: all you have to do, basically, is give your name and address and telephone number. One of the concerns that I think many parents would have—

The Hon. SANDRA KANCK: And your credit card number. One of the concerns that I think many parents have is that it would be quite easy for a minor to become involved through the Internet. The Hon. Carmel Zollo mentioned—

The Hon. SANDRA KANCK: Exactly. Minors can, and do: I agree with that, and it is of concern.

The Hon. T.G. Cameron: I know one young person whose parents had given him a credit card linked to their credit card, and he blew the lot.

The Hon. SANDRA KANCK: I cannot say much for those parents' brains. The Hon. Carmel Zollo mentioned the regulatory system in Victoria, and I return to the evidence from Mr Toneguzzo. Referring to the Australian States draft regulatory model, he said:

The Australian States draft regulatory model is encouraging cooperative effort. However, without Federal intervention there are enormous financial incentives for one of the regulatory participants to offer an interpretation that could potentially compromise the regulatory model. Those interpretations would be made to entice operators by ensuring that the `rebel' jurisdiction was able to offer the cheapest and easiest entry into the market. Worse still, a regulator could break ranks and offer incentives to one or more cyber gaming operators to establish in their jurisdiction, despite the regulatory model. This could result in a deregulated cyber gaming market.

He then observes that an unregulated environment provides entry for criminal involvement. It is nice to hear, I suppose, that Victoria has put something in action but when you hear it in terms of isolated action it has the potential for some concern.

Given the rapid uptake of people accessing the Internet and the prospect of large amounts of money being gambled on the Internet across nations, we are seeing the emergence of something called e-cash, which is shorthand for electronic currency. In his evidence Mr Tonneguzzo quoted from the February 1997 issue of a magazine called Spectrum, which stated:

. . . e-money will threaten every major bank, upsetting the balance of power between financial institutions, retailers and consumers. It will hobble Governments as it undercuts their ability to control the flow of money with monetary policy.

A statement such as that makes it incumbent upon us to have controls, but one has to ask what sort of controls. They will not be easy to set in place, because a further concern is the way these Internet casinos can be used for money laundering, and attempts to bring them under some form of regulation will no doubt be met strongly by organised crime. The evidence that the Social Development Committee heard is that if this matter is to be tackled it will need to be done at the Federal level, and even then it would only be partly effective unless it was done with international cooperation.

In light of that evidence, unless things have changed in the past 11 months—and I am not aware that they have—the presence of these clauses in this Bill is at best a window dressing exercise to make it appear that we are trying to do something. Certainly, something needs to be done but I question whether operating on our own is the right way to go.

The Hon. SANDRA KANCK: I agree that something needs to be done, but it has to be done at the national level in cooperation with other nations.

The Hon. SANDRA KANCK: I do not know whether it will happen, but the implications if it is not tried are quite horrific.

The Hon. SANDRA KANCK: Victoria has something; we could put something in place here and hope that what we did became the model for mirror legislation around the country, but—

The Hon. SANDRA KANCK: There is the problem to which I have referred; it has to be done federally. The degree of interaction that is occurring here in this Chamber on this issue is showing that there is cause for concern, but it is a question of how we do it. The Social Development Committee dealt with this, and our recommendation was that the action had to occur at a Federal level.

The Hon. T.G. Cameron: Look at what happens to most of the select committee recommendations: no-one takes any notice of them.

The Hon. SANDRA KANCK: Yes, and I will refer to one of those recommendations shortly. The location of EFTPOS and ATMs away from licensed premises is well intentioned but I am not sure it will solve anything. A person who is intent upon gambling will not be put off by having to walk to get their money. For example, if you remove the ATM that is inside the doors of the Casino, the gambler has only to walk across to the ATM in Bank Street, so it will hardly put the person off. I do not use EFTPOS as far as I am aware; that is where you take money out at a remote location but not at an ATM. I wonder whether the Hon. Mr Xenophon can explain how this provision would affect a hotel that had accommodation, a restaurant or a bottle shop. I am concerned that such a hotel would be placed at some disadvantage if EFTPOS were not allowed simply because gaming machines were on the premises.

I hasten to add that at this stage I do not indicate support or opposition to that clause, and I am willing to listen to argument on it, but I suppose that by now the Hon. Mr Xenophon is wondering just what part of his Bill I will support. Some of the TV advertising that has been around for the past 12 months promoting gambling I have found very unacceptable. While most of the focus of the anti-gambling lobby has been on gaming machines, some of the most objectionable advertising has related to other forms of gambling, such as lotto. I consider that advertising which encourages a person to use the last $2 they had set aside for their bus fare for a final gamble to be utterly irresponsible. I will therefore support the provisions in the Bill relating to advertising.

The Australian Hotels Association has developed a voluntary code of practice for gaming machine advertising and promotion. The AHA, I believe, has acted very responsibly in doing this, and part of that code is extremely relevant to the example I just gave of irresponsible advertising. It states:

Any promotion which encourages patrons to spend their last $1 with the expectation of winning a fortune is not acceptable.

The pity of this is that the other forms of gambling have not seen fit to develop such a code of practice and probably will not do so unless forced to.

I express my disappointment that the Government has seen fit to ignore a recommendation made by the Social Development Committee 11 months ago. The committee recommended that a code of advertising practice appropriate to each gambling code be presented by the Attorney-General to the Parliament no later than the first sitting day of 1999. So, seven months after the date the Social Development Committee suggested, we have nothing. I am hopeful that the Attorney-General might enter the debate on this Bill and use it as a way of explaining to the Parliament why he has ignored this particular recommendation from the Social Development Committee.

I am supportive also of notices about the chances of winning being displayed. I am similarly supportive of the provision of clocks so that gamblers can see them and keep an eye on the time, although I am not totally convinced that it will make much difference. I know that, on a comparative basis, for many addicted smokers the warnings on cigarette packs make no difference to them.

A family friend who trained as a medical technologist and who was working at the repatriation hospital in Sydney on a daily basis was doing biopsies on the lungs of war veterans which were filled with tar and which had developed cancer and, when he wanted a cigarette (and he was smoking 40 a day), he would simply say to his wife, `Pass the cancer sticks, dear.' So, I wonder about the effectiveness of it.

It is a low cost measure, so I do not have any particular beef about whether or not it is included. Advising the odds of winning, or perhaps even better advising the odds of not winning, might convince some gamblers not to put on the next wager, but I do not know.

The Hon. SANDRA KANCK: I am a great believer in informed choice so, from that point of view, I am willing to support it. The Social Development Committee made a couple of other recommendations in its report on gambling which I am surprised the Hon. Mr Xenophon did not take up. The committee recommended that gaming machine licences should be refused for what we termed `pokie parlours', which are premises that simply have gaming machines; they do not have facilities for sociable and socialising purposes such as the provision of meals and recreation.

The Hon. SANDRA KANCK: The Act already provides for that. Well, that explains—

The Hon. SANDRA KANCK: Then the Social Development Committee made a useless recommendation when it made its report last year. That committee also recommended that all gambling codes should contribute to the Gamblers Rehabilitation Fund, but the opportunity to address that aspect appears to have been passed up. I indicate support for the second reading, and I do so because of those aspects of the Bill which I can support. However, as I have made clear, I will oppose other aspects during Committee.