Australia's Gambling Industries - Productivity Commission

This fee is only taken in estates where money is actually realised. All others are
‘free’ although there is a cost involved in terms of staff and administration. As most
gambling related bankruptcies are ‘consumer bankruptcies’ it is likely that many do
not attract a fee at all.
In their estimate of the costs of gambling-related bankruptcies in NSW, Dickerson et
al (1998) used a cost of $6,600 per court case.
How has the cost of gambling-related bankruptcy been calculated?
The key data used to estimate the cost of gambling related bankruptcy are:
• the number of ‘gambling and speculation’ bankruptcies indicated by the official
statistics (317); and
• a cost per bankruptcy of $4000. While many bankruptcies will not involve this
cost being borne by the person involved because insufficient money can be
recovered, there is nonetheless a cost involved in the process and this should be
considered in the estimates.
The total cost of gambling related bankruptcies is estimated in this way to be $1.3
million each year.
Bankruptcy involves a range of other costs, and having been declared a bankrupt
may well reduce earning capacity, or borrowing capacity into the future. The
Commission has not attempted to estimate such future costs associated with having
been declared bankrupt as a result of gambling.
Bad debts at bankruptcy
The Commission’s surveys did not collect information on the level of bad debts at
the time of bankruptcy. Nonetheless, it would be reasonable to expect the level of
debt at bankruptcy to be at least as great as the average level of gambling-related
debt at the time that problem gamblers seek treatment, and probably greater, as it is
severe levels of debt that typically lead to bankruptcy.
• Ladouceur (1994) reported that problem gamblers in Gamblers Anonymous in
Canada had debts at bankruptcy ranging from $75 000 to $150 000
As with other debt, bad debts represent a transfer from others to the gambler, rather
than a net cost to society. The fact that the gambler may not subsequently get ‘value
for money’ when consuming gambling products is accounted for in the analysis in
appendix C and chapter 5, where the benefit that consumers gain from access to
gambling products in reviewed and quantified.
J.12 GAMBLING