Australia's Gambling Industries - Productivity Commission

Box R.1
Data qualifications
The bankruptcy data used in this appendix is that reported in the Annual Reports of the
Bankruptcy Act of 1966 by the Inspector-General in Bankruptcy. There are two major
deficiencies in the data series on bankruptcies caused by gambling.
A number of inquiry participants said that anecdotal evidence suggests that the
number of bankruptcies caused by gambling is significantly higher than that reported in
the official data. For example, in 1997-98, 57 non-business and 5 business
bankruptcies were classified as caused by gambling or speculation in South Australia.
The Adelaide Central Mission (sub. 108, p. 3) suggests that the actual number is
significantly higher:
During the last twelve months as one financial counsellor in a smaller State I have been
involved in 20 petitions for personal bankruptcy totalling $1.25M which can be directly
attributed to the petitioners problem gambling addiction…
I believe that bankruptcy statistics are extremely conservative concerning problem gambling
and difficult to identify while the present legislation is in place.
Problem gambling as a reason for personal bankruptcy is often not indicated and reasons
given refer to health issues, loss of job, other criminal acts, breakdown in relationship and
poor money management.
Reasons suggested by participants, as to why people fail to list gambling as a cause of
bankruptcy include fear of prosecution under section 271 of the Bankruptcy act
(discussed later) and the stigma attached to being labelled a bankrupt from gambling.
Results from the Commission’s National Gambling Survey also suggested that there
were 2900 people nationwide who were declared bankrupt each year as a result of
their gambling activities — significantly more than the 317 reported in the 1997-98
annual report of the Inspector-General in Bankruptcy. However, the standard error on
this item of the Commission’s National Gambling Survey is sufficiently large that it
provides an imprecise indicator of bankruptcy levels.
A second problem with the data for gambling research is that it does not distinguish
between bankruptcies caused by gambling and those caused by speculation (for
example speculation on stock markets).
Despite qualifications the data is the best time series collected on bankruptcies caused
by gambling in Australia.
In 1997-98 the majority of new business bankruptcies, both gambling and nongambling
related, were declared by people aged between 35 and 44. For new nonbusiness
bankruptcies people aged between 25 and 34 accounted for the majority of
gambling and other bankruptcies (table R.2).
At the national level, New South Wales and the ACT recorded the largest number of
gambling and non-gambling bankruptcies in 1997-98 (table R.3). However in per
capita terms South Australia recorded the largest number of bankruptcies caused by
gambling in 1997-98 (table R.4).
R.2 GAMBLING