Australia's Gambling Industries - Productivity Commission

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In South Australia, the TAB cut out a lot of SP bookmakers but it is naive to say that they no longer exist. We are aware of a couple … They exist because of better odds, no tax records, and there’s money in it. Now it is more organised. The TAB has taken away the bottom end of the market. Table O.1 The estimated value of illegal gambling turnover and player losses Jurisdiction Source Year Gambling type Turnover Estimated losses a player $ million (1997-98 prices) $ million (1997-98 prices) 1950-51 SP bookmakers 2 686 269 VIC NSW racing officials (McCoy 1980, p. 178) 1950-51 SP bookmakers 5 373 537 NSW NSW racing officials (McCoy 1980, p. 178) 1961-62 SP bookmakers 4 894 489 NSW Kinsella Royal Commission 1962 (McCoy 1980, p. 180) 1982-83 SP bookmakers 3 545 355 NSW Connor Casino Inquiry (Hickie 1985, p. 364) 1982-83 SP bookmakers 1 970 197 VIC Connor Casino Inquiry (Hickie 1985, p. 364) 1982-83 SP bookmakers 7 879 788 Australia Connor Casino Inquiry (Hickie 1985, p. 364) 1979-80 SP bookmakers 52 5 QLD Queensland (1989) 1988-89 SP bookmakers 255 26 QLD Queensland (1989) 1994-95 SP bookmakers 1 060 106 NSW McMillen and Kerr (1996, p. 3) 1994-95 SP bookmakers 318 32 VIC McMillen and Kerr (1996, p. 3) 1973-74 Casinos 3 131 125 NSW Hickie (1985, p. 178) 1976-77 Casinos 2 233 89 NSW McCoy (1980, p. 200) a McCoy (1980, p. 253) estimated that illegal bookmakers made an average 10 per cent profit on turnover so this factor is applied to estimate player losses. The casino games have relatively high player rates of return (eg around 97.5 per cent for roulette). An estimated player loss rate of 4 per cent has been applied — this is somewhat more than used by Hickie (1985, p. 178). All data is in 1997-98 prices (based on the implicit price deflator for private final consumption expenditure from the National Accounts – ABS Cat. no. 5204.0). It may seem plausible that the overall decline in illegal bookmaking was due to the introduction of legal TABs in the 1960s, and the fact that, over time, these became highly accessible throughout the community. However, this is not altogether certain. There was limited change in the estimated value of illegal bookmaking from 1961-62 to 1982-83, well after legal TABs had flourished. 1 McCoy (1980) considers that these illegal and legal forms could 1 Another difficulty in trying to assess the impact of legal on illegal gambling is estimating what the counterfactual would have been. For example, some might have supposed that illegal O.2 GAMBLING
survive together because they catered to different markets and because illegal bookmakers became far more organised with the onset of legal competition. Moreover, TABs did not cater for people who wished to place fixed odds or starting price bets. There is also some question about the magnitude and nature of the social gains realised through legalisation. It appears that prior to the introduction of the legal TAB, illegal bookmakers were not considered as criminals, but as part of a suburban service (Charlton 1987). The 1984 Royal Commission on the Activities of the Federated Ship Painters and Dockers Union (Commonwealth Government and the Victorian Government 1989) found that, by the 1980s, the SP bookmaker was quite different to the small operator of the pre-TAB era. With the introduction of the TAB and increased law enforcement, SP bookmaking had become a highly organised operation throughout Australia. In major cities, territories were marked and distributed among organisations. Most transactions were conducted via the telephone, and violence was sometimes employed to ensure the operation of the system. Illegal casinos According to Hickie’s (1985, p. 59) account of the New South Wales experience, most of Sydney’s illegal casinos began as baccarat schools or clubs, with the transition to illegal casinos beginning after the end of a gang war in 1967-68, and aided by corruption in NSW politics and in the NSW police. The casinos were often equipped with roulette wheels, dice tables, bar equipment and hostesses in scanty uniforms. They operated openly and, in some instances, a sign on the street marked the locations of the casinos. Celebrities, leading athletes and politicians, as well as a substantial walk-in clientele frequented these casinos. The expenditure (player losses) associated with these illegal casinos appeared to be relatively significant (at around $100 million in 1997-98 prices — table O.1). Sydney’s illegal casinos went through a boom in the 1970s (Hickie 1985), but started to decline during the late 1970s as a result of increased law enforcement. Illegal casinos were no longer able to protect their immovable assets, and several shut down while others returned to the style of baccarat schools. gambling, with all of its costs, may have grown very substantially over time if the TAB had not been introduced. Not to take this into account would then underestimate the benefits of liberalisation. However, there is some evidence that the illegal market was relatively stable prior to introduction of the TAB. Thus illegal bookmaking turnover barely changed from 1950-51 to 1961-62 (table O.1). DISPLACEMENT OF ILLEGAL GAMBLING? O.3
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Australia’s Gambling Industries I
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Contents of other volumes Volume 1
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Australian Capital Territory Federa
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Tasmania Wrest Point Casino New Zea
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Marianne James Prof Jan McMillen Pe
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Canberra, 30 November 1998 Senator
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Sydney, 16-17 September 1999 Rev Fr
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N Ward 28 Evelyn Jago 29 Territory
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Australian Hotels Association (SA)
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Women’s Health West 176 Norfolk I
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BetSafe Group - Paul Symond Consult
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B Participation in gambling: data t
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Table B.2 Participation in gambling
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Table B.4 Participation in gambling
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product in excess of the price paid
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C.2 Consumer surplus in the gamblin
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from increased consumption resultin
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Figure C.2 Tax and consumer surplus
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Table C.3 Price elasticities of dem
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Figure C.3 Consumer surplus for pro
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Box C.1 continued (e) That part of
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Table C.4 continued Wagering Lotter
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s n = share of gambling expenditure
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Figure C.6 Demand for gambling by p
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• the triangular area ’g’ whi
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The Commission’s treatment falls
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Box C.4 Explaining the lack of vari
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demand may become elastic, as peopl
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There are a number possible explana
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• Firstly, there has been extraor
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E Gambling in indigenous communitie
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The pattern of institutionally-base
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chase the “miracles” offered by
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F National Gambling Survey F.1 Intr
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F.2 The questionnaire Development o
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The use of this sampling approach m
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Box F.1 List of gambling activities
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• Big spending regular or less fr
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Questions asked of all respondents
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Comparisons of aggregate expenditur
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elated to their gambling — all
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Interview duration As with any ques
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ecause of non-payment), while there
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• post-weighting the sample data
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particular area/age/gender cell fro
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esult in turn reflects the survey p
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F.11 Contact and participation rate
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Being aware of the need to minimise
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NATIONAL GAMBLING SURVEY F.31
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F.52 GAMBLING
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F.54 GAMBLING
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F.56 GAMBLING
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F.58 GAMBLING
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F.60 GAMBLING
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F.62 GAMBLING
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F.64 GAMBLING
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F.66 GAMBLING
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G Survey of Clients of Counselling
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G.3 Question by question A1 to A3
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D23 — is concerned with the mecha
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of problem gambling (eg how many ch
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CLIENT SURVEY G.9
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CLIENT SURVEY G.11
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CLIENT SURVEY G.13
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CLIENT SURVEY G.15
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CLIENT SURVEY G.17
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CLIENT SURVEY G.19
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CLIENT SURVEY G.21
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CLIENT SURVEY G.23
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CLIENT SURVEY G.25
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Problem gamblers may subsequently b
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For a subset of 856 clients in 1996
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Table H.3 Variable Logistic estimat
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Prison, South Australia’s main re
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• “Has your gambling ever led y
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elicit information on vocational, f
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This finding is consistent with the
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H.5 What crimes do problem gamblers
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Other more violent crimes such as b
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But as noted above, police statisti
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H.8 Problem gambling and loan shark
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epayments were required — but mos
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State Gaming Authorities data The s
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Table I.2 Unweighted estimation Med
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machines. There is no statistically
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Figure I.2 Expenditure on gaming ma
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Weighted results The Commission’s
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Table I.7 Summary of Victorian metr
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Table I.9 Summary of Queensland reg
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it is likely to represent the more
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Table J.1 presents the information
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suffer from some of the adverse con
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• costs of gambling counselling s
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To the extent that borrowed money i
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This fee is only taken in estates w
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• for a higher estimate, the numb
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The Commission has assumed that the
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• to estimate the income lost ove
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the Commission has used this estima
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• 336 people receiving a jail sen
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states offer up to $50 000 each for
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As indicated in table J.6, where pr
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seen as part of the informal contra
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Almost all divorce cases are uncont
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of their gambling during the period
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Suicide ideation The Commission’s
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Table J.10 continued People a Per p
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Table J.12 Value of annual transfer
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pathological and problem gamblers a
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Table K.2 Summary of cost estimates
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L Survey of Counselling Services Th
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Several academics working in the ar
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L.4 Survey results Nature of agenci
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Number of clients The survey includ
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Characteristics of gambling clients
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counselling because of someone else
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Table L.17 Full time equivalent pai
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Table L.20 Approaches used to help
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Table L.24 Gambling clients ending
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Page 263 and 264: SURVEY OF COUNSELLING SERVICES L.23
Page 271 and 272: Table M.1 Major forms of gambling t
Page 273 and 274: and sport development fund. In some
Page 275 and 276: Tax on keno In New South Wales, the
Page 277 and 278: Poker machines In most states, lice
Page 279 and 280: Table M3: Gaming machine taxation b
Page 281 and 282: Table M3: (continued) Hotels: Levie
Page 283 and 284: Table M4: (continued) NSW VIC QLD W
Page 285 and 286: Table M5: (continued) OTHER GAMBLIN
Page 287 and 288: N.1 Characteristics of machines of
Page 289 and 290: Table N.1 Australia, Japan, United
Page 291 and 292: Table N.2 Australia, Indiana, Conne
Page 293 and 294: The following discussion of gaming
Page 295 and 296: Canada Broadly speaking, Canada has
Page 297 and 298: Figure N.4 Japanese pachislo machin
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Page 305 and 306: N.2 Market segments As with many ot
Page 307 and 308: Box N.4 Comments on market segments
Page 309: O Displacement of illegal gambling?
Page 313 and 314: P Spending by problem gamblers The
Page 315 and 316: Table P.1 Outlays, player losses an
Page 317 and 318: Table P.3 Concentration of outlays
Page 319 and 320: Figure P.2 Distribution of outlay b
Page 321 and 322: Table P.4 Expenditure shares of pro
Page 323 and 324: is adjusted for biases in its estim
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Page 327 and 328: P.5 Estimating the expenditure shar
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Page 333 and 334: Table Q.2 Employment status of prob
Page 335 and 336: Table Q.3 continued Study Average a
Page 337 and 338: Relationship status The greater inv
Page 339 and 340: Table Q.6 Gender of problem gambler
Page 341 and 342: The pattern of an increased feminis
Page 343 and 344: R Bankruptcy and gambling This appe
Page 345 and 346: Table R.2 Age profile of bankrupts,
Page 347 and 348: Table R.5 New bankruptcies per mill
Page 349 and 350: Figure R.2 continued Western Austra
Page 351 and 352: • The penalty has become less sev
Page 353 and 354: S State and territory gambling data
Page 355 and 356: Table S.4 Real government revenue f
Page 357 and 358: Table S.8 Real government revenue,
Page 359 and 360: Table S.12 Real government revenue
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Table S.16 Real government revenue
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Dickerson et al (1998, p. 79) for e
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However, the survey used a set of p
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T.3 The logistic approach The NORC
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Table T.3 Method Various estimates
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such as France and the US (Casino I
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Table U.2 An example of an outcome
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intensity on the 85.15 per cent Cas
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considers that the machine price
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egular playing (30 years) the proba
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for an amount of time that is less
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U.6 The gambler’s fallacy Gambler
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This does not mean that a person ca
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V Use of the SOGS in Australian gam
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Differences in question wording and
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References AADAC (Alberta Alcohol a
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—— 1998, Efficient Tobacco Taxa
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Bickerdyke, I. and Lattimore, R. 19
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——, Dickerson, M. and Harley, B
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Campbell, C. and Smith G. 1998, Can
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—— and Winefield, A.H. 1996, Co
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——, Baxter, P., Boreham, P., Ha
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Ferguson, B. 1996, A Note on the In
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—— 1997, Legalised Gambling as
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Horner, T. and Bradfield, G. 1998,
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——, Marston, A., Singer, R., Wi
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Gambling Studies, ‘Towards 2000:
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—— 1995b, Social impacts of urb
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—— and Ohtsuka, K. 1999, ‘The
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NT Select Committee (Select Committ
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Prosser, G., Breen, H., Weeks, P. a
Page 433 and 434:
Single, E., Collins, D., Easton, B.
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Thomas, S., Jackson, A., Thomason,
Page 437 and 438:
—— 1997, Gambling and Problem G
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