This morning, on Radio National Breakfast on the ABC, Fran Kelly looked at the current situation with the proposed poker machine reforms. The show started with a statement from FAHCSIA Minister Jenny Macklin, and then moved on to a discussion with the Reverend Tim Costello, chair of the Australian Churches Gambling Taskforce, and Anthony Ball, CEO of Clubs NSW and Clubs Australia.

This is the transcript. I won’t add any comments of my own as it is quite long. I might do that in a later article.

FK: Australia’s pubs and clubs and the gaming industry have brought out the big guns in their war against poker machine reform. This week, one and a half million anti-reform newsletters will be dropped into letterboxes in 31 key electorates. Next week a TV campaign will be unleashed in regional NSW and Queensland. The big beef is against mandatory pre-commitment, a scheme whereby gamblers would register, choose a gambling limit and be issued a card which contained credits to that amount to play in the pokie machines. Once the credits are used the gambler is locked out of the machine. Despite unease within Labor’s backbench, particularly those MPs sitting in these marginal seats, the minister responsible for gambling reform Jenny Macklin just told us that the Gillard government is committed to these changes.

JM: Look at the latest information that we have, for example, from Queensland today; we’re seeing that Queensland’s most profitable poker machines can be found in the state’s most disadvantaged suburbs and this is evidence of why we do need to introduce a system of mandatory pre-commitment. The figures from Queensland show that $4,000 a minute is being lost in Queensland by problem gamblers. We are also seeing this happening in very disadvantaged areas or Brisbane like Logan that has the highest unemployment rate. That’s why we need to act, because we have very vulnerable families, families losing on average $21,000 a year from problem gambling, and that is an enormous amount of money that’s putting terrible pressure on those families. That’s why we’re introducing a system of mandatory pre-commitment.

FK: Jenny Macklin is the Minister for Families, Housing, Community Services and Indigenous Affairs and she’s responsible for steering these pokie reforms through the parliament.

Well, the clubs and the pubs are warning that reforms like this will mean a massive loss of revenue and will result in the closure of some clubs, jobs lost and charities and sporting groups, which benefit from clubs, being severely disadvantaged. Anti-pokies campaigners say the moves will help Australia’s 160,000 problem gamblers and they’re urging politicians that are being targeted in this campaign by the pubs and the clubs to stand firm.

One of them is the Reverend Tim Costello who joins us now from Melbourne, and from Sydney, representing the anti pokie reform camp is the CEO of Clubs Australia Anthony Ball. Tim Costello, Anthony Ball, welcome to breakfast.

TC: Good morning.

AB: Good morning.

FK: Anthony, let’s begin with you. This campaign of yours, Won’t Work Will Hurt… what’s the aim of it?

AB: Well the aim of it, Fran, is to inform the community that issuing a licence or a card to a problem gambler won’t help them, it won’t work. It won’t help a single person. You don’t help someone who is addicted to gambling by giving them a gambling card. They’ll be the first in the queue for it, they won’t set realistic limits, or they won’t set a limit at all, and if they get sick and tired of that they’ll simply, they’ll go online. We’re not saying that we are against poker machine reform; I think that’s a misrepresentation. We are against, strongly against this experimental technology that has been proven to fail in recent data that’s been obtained from Norway. So it won’t work, it will hurt because we know that while problem gamblers will keep punting, recreational gamblers like me and millions of other Australians will do something else because they’re not going to be prepared to register, go on to a database, provide their personal details and have their play tracked. So if that happens, yes revenue will fall, jobs will be lost, support for community groups and sporting teams will evaporate and local businesses that supply clubs and pubs will suffer. That’s why we say it won’t work but will hurt.

FK: Well, you say the recreational players won’t sign up; what value, dollar value are they worth, that market?

AB: Well it’s not so much the dollar value, it’s the fact that people who gamble occasionally or recreationally won’t jump over those hurdles when there are so many other options. They’re not going to provide their personal details and go on a database and carry that card around. And so that will see our revenues, we think, reduce by about 40% which is significant. And look, of course clubs so rely on poker machines to provide an income stream that allows them to employ people, maintain football fields and golf courses and bowling greens, that’s the fact of the matter. But our revenue loss will be because your average punter will go elsewhere.

FK: Tim Costello, do you think that that will be the result of this kind of changes to pokies if they’re brought in that all gamblers, not just problem gamblers, but recreational gamblers will just take their $2 bets and go elsewhere to the TAB or something?

TC: No it won’t. We’ve got two sets of machines: high-loss machines where the average losses are $1200 an hour and then for the recreational punters, low-loss machines where they won’t need a card. What you’re doing when you’re gambling is you’re buying distraction time. If you can buy that and have your fun at a lower cost, which is what low-loss machines are, and which Britain and Norway and lots of other places have without the significant damage, you’ve still had your fun, you’ve had your distraction time, whatever it is, without even needing a card. When the average losses are $1200 an hour on the high-loss machines, we’re talking really about the crack cocaine of gambling here with these sort of machines. When the Productivity Commission, now in two reports, back in 1999 commissioned by my brother Peter, and now reaffirmed in 2010, says 40% of the profits from these high-loss machines are coming from people with a problem. They’re either addicted and therefore they, by definition, have no free choice, or they’re at risk of problem gambling, average as Jenny Macklin has said, $21,000 a year. This is out of control, and the public know it. The latest Essential Poll said 67% of the public actually agree with it.

FK: These high-loss machines that you’re talking about, and they are high losses, I think someone can lose up to $15,000 an hour on one of them, but according to Anthony Ball, he just told us that this pre-commitment technology won’t work because you’re just offering the addicted gambler, the gambler in trouble, ok, set your own limit, it’s not going to work.

TC: So, it won’t work for everyone, and maybe Anthony would prefer, I would have preferred just totally be low-loss machines where you just buy your distraction time. But of course Anthony and the clubs would be screaming at that. So this was actually a trade off that Andrew Wilkie and the Gillard government did to really help clubs, to say ok, well you’ve got your low-loss machines but you make your big winnings from these high-loss (machines), these are the ones that do the social damage. The Justice Department in Victoria before last year, before Christmas, brought out a report saying after illicit drugs, the second greatest contributor to crime is these pokies. They are affecting all of us. Now will it work? Not for everyone but it is a tool that says every problem gambler, and I know lots of them, say, I have my sane moments before I start gambling, before that chemistry in the brain of waiting for the electronic fruit to come up just put me into a zone where I can’t stop; in that sane moment, if I am asked to set a limit, I say to myself, can I face my wife tonight, and my kids, if I’ve lost more than $300? In that sane moment, that tool which only gives the individual choice, what can be wrong with that, and control, will work for many. Not for all, but for many.

FK: Ok, Anthony Ball, this is the point you were making about recreational gamblers won’t, they won’t like this, they’ll go elsewhere; why won’t they just stick around and play these low-loss machines?

AB: Fran, just before I address that, look so many stats from Tim, so many of them are wrong. The average spend on a poker machine is $27 dollars an hour, You cannot lose the amounts that he is talking about –

FK: What’s the average spend by a problem gambler on the high-intensity machines?

AB: Well the Productivity Commission estimated that the average spend of a problem gambler annually is $21,000, so –

FK: That’s a fair bit.

AB: Well, the math doesn’t stack up because if you can lose $1200 an hour, how do you then lose $21,000 over a year? That means they’re only playing poker machines for probably ten hours. The math just isn’t there. But put that aside; recreational gamblers will go elsewhere. Look, there are only poker machines. There is no such thing as a low-intensity or a high-intensity machine in Australia.

FK: Why do you say that when the amount that you can spend per machine can be altered and also the number of spins per minute can be altered?

AB: That’s the option of the player, so I can play one cent a spin, or I can spend $5 a spin. It depends on what the player wants to do. There is no demarcation between high-intensity and low-intensity. In fact the low-intensity concept is a bit of a fiction, in fact I think it’s a distraction so that people can say that not everybody is going to have to register and get a licence to punt. So look, there are poker machines, there are 200,000 of them. And Tim is saying that this experimental technology is not going to help everyone, well it’s not going to help anyone, and it’s going to cost about three and a half billion dollars to introduce. And that is why even the Salvation Army, and I’ll read from their press release, is saying that based on consultations with its frontline staff, people in its programs affected by problem gambling, and researchers, the Salvation Eastern territory support further trials of mandatory pre-commitment before fully endorsing it. Surely that’s a sensible approach.

FK: Well, Tim, can I get your response to that, and also can we clarify this point because it’s a significant point: you and others say that there are these low-intensity machines and high-intensity machines, is that not true, as Anthony just told us?

TC: It’s just a matter of logarithms. So in Britain, where they’re almost all low-intensity machines, you simply set jackpot payouts of, I forget the figure but it’s 70 or 80 quid; in Europe, in Norway, it’s payouts of about a hundred and ninety, and it’s coin only, so in Norway they banned notes and being able to load them up. They actually then banned slot machines and gambling counselling services just found, like gambling help lines, a dramatic drop. So when you set the logarithms to say, these machines are low-intensity, and the South Australian studies say, contrary to the $3 billion costs bill Anthony just quoted, it’s a thousand dollars per machine only, to change the logarithms. So then, for those machines you don’t need a card. You just buy your distraction time. You do it safely like most of the rest of the world does. It’s here that we have the high spin rates, the high loss rates because the logarithms have been set that way. And this is why this reform is so sane –

FK: What about the Salvation Army point? Because we’ve only go a couple of minutes here and the Salvation Army Eastern Territory said they support further trials before fully endorsing it.

TC: The Productivity Commission actually talked a further pilot and the Salvation Army Eastern Territory, not Southern, said, we would like to see that in an earlier draft. What Anthony is quoting from is an earlier draft of a leaked position from the –

AB: No it’s not. It’s the press release of the first of September.

TC: – and that earlier draft is now under review from Commissioner James Condon, because they’re actually saying, we support reform. The Eastern division is saying this is out of control. This is what Anthony’s not telling you. This is a huge problem. As is the Southern division, and the earlier draft was actually about the wording from the Productivity Commission about a pilot.

FK: Ok. There seems to be arguments either side, and statistics that each of you can throw at us, and that’s been the way of this debate; but Anthony, you mentioned the Productivity Commission. Didn’t the Productivity Commission also find that the claims from the pubs and clubs that, all this money, if it goes, this revenue stream, then local groups and charities and footy clubs won’t get the support from the clubs, that only a tiny proportion of the funds raised, the revenue raised by pokies, goes out to the community and charitable organisations?

AB: Oh, well that’s just simply not true. Clubs are not-for-profit organisations, every cent that is earned goes back into the club or into building and maintaining golf courses, bowling greens, putting footy jumpers on kids’ backs, that’s what they do. Look, the social contribution of clubs is estimated at $1.2 billion a year, that is quite apart from its economic and employment contributions. I absolutely dispute that from the Productivity Commission. And while we’re talking about Norway, because I know it’s often thrown up as a good example of what can happen, well the evidence is in from Norway. The most recent study shows that since the introduction of mandatory pre-commitment, the rate of compulsive or problem gambling has increased by 60%.

FK: But it also concludes, what I’ve got in front of me says it concludes that there appears to be a general decline in the proportion of Norwegians with a gaming problem.

AB: As far as problem gamblers –

TC: Exactly.

AB: No, as far as problem gamblers go, which is surely what we’re talking about, the rate increased from 1.3% to 2.1%. If you want to include low-risk and no-risk gamblers, well you may well come to that conclusion but if you’re talking about problem gamblers, it’s in black and white, I’ve got the report in front of me –

TC: Well I’ve got the report too Fran, and the compulsive gambler category of going up is statistically within the standard of error. In other words it’s not significant. What is significant is that between 2008 and 2010, the number without any problems is significantly (higher) thanks to these reforms. And can I just say on these social benefits, because I do resent how Anthony keeps saying clubs do all this fantastic community work because if we’re going to lose sporting fields and everything if we have a reform like this… Western Australia has no pokies outside Burswood Casino. None in suburbs, none in rural towns, plenty of sporting clubs and events and community activities. This notion that somehow the whole community is now tied in, its well-being, to high-loss pokies really is a nonsense.

FK: Just finally, Anthony Ball, finally a word to you. I’m just wondering, you’re about to spend, I think the ultimate campaign will cost $9 million, that you’re going to launch in marginal seats along the eastern seaboard in particular, how does that fit, you doing that, with the recent survey done by Essential Research which shows 67% of Australians want these pokie reforms?

AB: Well I don’t think they want these poker machine reforms specifically, if you have a look at the question in that survey. But look, it’s not a popularity contest, we’re out there saying that let’s do more to help problem gamblers, but let’s not embark upon an experiment that’s going to cost over three and a half billion dollars and kill clubs, and also hotels. There is another way of doing it, I mean spending $3 million on better counselling will be more effective than spending $3 billion on this experimental licence to punt.

FK: Ok. I am anticipating we’ll be talking about this again before the year is out. Tim Costello, Anthony Ball, thank you very much for joining us.

AB: Thank you.

TC: It’s a pleasure.

FK: Anthony Ball is the CEO of Clubs Australia; Tim Costello, Reverend Tim Costello is Chair of the Australian Churches Gambling Taskforce, and this weekend, the clubs and pubs of Australia, of NSW, are unleashing a television campaign across regional Australia, and in particular marginal seats, targeted at those marginal seats in NSW and Queensland.

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