Productivity Commission's draft report on gambling

27 October 2009

While the Productivity Commission noted in its recently released Draft report on Gambling that gambling is an enjoyable pursuit for many Australians, it advocated the introduction of Government policies that balance the many benefits for recreational gamblers against the significant harm problem gambling causes some people.

If the draft recommendations are adopted the structure and dynamics of the racing and wagering industry will undergo a substantial transformation. The gaming industry will be required to change its approach to harm minimisation and online gaming will be reintroduced into Australia.

The Draft Report states that Australians spend about $18 billion a year gambling, including $12 billion on poker machines. About 15 % of Australians gamble regularly and problem gamblers make up about 10% of that group. The money share that problem gamblers play on poker machines accounts for around 40% of that $12 billion figure.

Key draft recommendations made by the Productivity Commission include:

• Each jurisdiction should ensure that its gambling regulator has statutory independence from government, regulatory control over all forms of gambling within that jurisdiction, and a charter that emphasises the public interest, and explicitly includes consumer protection and harm minimisation.
• The Australian Government should work with state and territory governments to develop a national funding model for the racing industry.
• The key element of this model would be a single levy, universally paid on a gross revenue basis by wagering operators to the racing industry.
• A new national independent authority rather than the racing industry to determine and periodically review the levy in consultation with gamblers, wagering operators and the racing industry.
• Venues should be prohibited from offering inducements that are likely to lead to problem gambling, or are likely to exacerbate existing problems, including offering free alcohol or food to a patron who is gambling.
• The Australian Government should request that the Australian Competition and Consumer Commission examine any adverse implications for competition associated with the ownership arrangements for Sky Channel.
• Totalisator licence exclusivity in retail outlets not to be renewed.
• Funding arrangements to be changed to reflect the market share of the relevant racing provider.

The Interactive Gambling Act 2001 should be repealed and the current ban on online gaming lifted. A regime should be developed, in consultation with State and Territory governments, which allows for the managed liberalisation of online gaming in Australia, including a strict regime of consumer protection, with stringent probity and harm minimisation standards.

• Governments should implement by 2016 a universal pre-commitment system for gaming machines that: provides a means by which players could set spending limit.
• $1 bet limit for gaming machines to effect harm minimisation for high intensity gambling without impacting significantly on recreational gamblers.
• A maximum limit of $20 that can be inserted into gaming machines to slow pace of play of problem gamblers. 
• Drawing on the Queensland approach, governments should introduce a shutdown period for gaming machines in all hotels and clubs with an earlier starting time and a longer duration.
• Consider the introduction of a new statutory cause of action for consumers to seek compensation and the imposition of penalties against venue-based gambling providers in breach of breach appropriate standards of behaviour.

Public hearings are scheduled to be held in November and December and a final report due for release on 26 February 2010.

To read a full version of the Productivity Commission’s Draft Report on Gambling, go to http://www.pc.gov.au/projects/inquiry/gambling-2009/draft.

For further information, please contact:

Curt Schatz | Partner
Mullins Lawyers
t +61 7 3224 0261
f +61 7 3224 0230
cschatz@mullinslaw.com.au