Australia's Gambling Industries - Productivity Commission

More documents

Recommendations

Info

the Commission’s calculations are correct, but did point out that many people play Black Rhino and similar modern games in expectation of their frequent ‘scatter’ wins, rather than for the jackpot prize (a point also made subsequently by the Australian Casino Association in sub. D289). Box U.1 Random number generators and Black Rhino A number of industry representatives argued that the Commission’s representation of Black Rhino showed a poor understanding of how gaming machines actually worked: . It could take 6.7 million button presses … but it could be any quantum short of this (or longer than this), including one button press. The Commission appears not to understand the working of random number generators (Star City Casino, sub. D217, p. 18); The description of the Black Rhino is misleading. If fails to adequately reflect the laws of probability and an understanding of random number generation. In talking about the alleged number of times a player would need to press the button to win, the PC contradicts its earlier claim that the odds of winning are the same for every push of the button (ACIL, sub. D233, p. 9). Our impression is that you are labouring under a number of misunderstandings about … how poker machines work (Australian Casino Association, sub. D289, p. 1). … the PC suggests that consumers could be told that in order to get a 50 per cent chance of getting 5 rhinos it will take 6.7 millions button presses … This conveniently overlooks the fact that random numbers are involved and the jackpot could be achieved with just one press of the button … Later … the PC has a description of the chances of winning on an EGM which seems to contradicts its discussion … it is acknowledged that any press of the button is independent of previous wins … This is an acknowledgment of the random numbers. What does the PC really believe? (Australian Casino Association, sub. D234, p. 7). Below, the Commission sets out the calculations that were used to illustrate the odds of winning the top jackpot and its likely cost. Black Rhino is a game in which there are five (virtual) reels. On each reel there are 25 symbols. There is only one black rhino on each reel. The internal computer in the gaming machine generates a random number to determine the stopping point of each reel. Each reel is ‘spun’ independently. The probability of getting 5 rhinos on a single button push, playing one line at a time, on the Black Rhino gaming machine is, therefore, (1/25) 5 , which is one in 9,765,625. HOW GAMING MACHINES WORK U.15
This does not mean that a person cannot win on any given button push. Indeed, that is precisely what we took account of when making our calculations. They could win on the next button push as Star City Casino noted (sub. D217, p. 18) and the likelihood of doing so is exactly one in 9 765 625 as above. However, many people find one in 9 765 625 a daunting number. So how can one provide a picture of what one in 9 765 625 means? One — quite common way of explaining low probability outcomes in statistics — is to calculate how many cumulative trials (or button pushes in this case, given the example is based on a person playing one line per button push 8 ) would be needed to increase the probability to 50 per cent of winning the jackpot (instead of the roughly one in ten million represented by a single trial). This is a straightforward statistical problem. The probability of winning the jackpot is p. Therefore the probability of not winning is (1- p). The odds, therefore, of never winning the jackpot in n trials is (1-p) n . Therefore, the odds of winning the jackpot (at least once) in n trials is 1-(1-p) n . We can then ask how big is n in order that the expression 1-(1-p) n = 0.5. Some simple mathematical manipulation shows that: n = ln 0.5 / ln (1-p) Now substituting p = (1/25) 5 , then the number of button pushes (n) required is 6 769 015. 9 This has the implications that: • assuming each button push takes 5 seconds, this suggests that, at 17 280 button pushes per day, it will take 392 days to have a 50 per cent probability of winning the top jackpot; • data from the VCGA (1999) suggests that the average player spends less than 50 hours playing per year. At that rate of normal play, the gambler can expect to play for 188 years to have the 50 per cent probability; 8 As noted in section U1, this assumption is adopted for ease. The Australian Casino Association (sub. D289, p. 3) says that a different time spent would be obtained had the calculations been based on multiple lines. Of course, since playing multiple lines increases the number of games being played per minute, a fewer number of button pushes and therefore a reduced time would be required to achieve the fifty per cent chance. But that in no way affects the correctness of the calculations using the assumptions used by the Commission. The point of the calculation is to illustrate the remoteness of the probability of winning the top prize. Nothing put to the Commission suggests that our calculation under or over-estimates this remote probability. 9 The binomial formula suggests that this 50 per cent probability of winning at least one jackpot consists of the following: there is a 34.7 per cent chance of winning just one jackpot over the 6.7 million trials, a 12 per cent chance of exactly two jackpots, a 2.8 per cent chance of winning exactly three jackpots over the trials, and a 0.5 per cent chance of winning exactly four jackpots. The probability of winning other multiples of jackpots are so negligible that they are not worth noting. U.16 GAMBLING
Page 1 and 2:
Australia’s Gambling Industries I
Page 3:
Contents of other volumes Volume 1
Page 6 and 7:
Australian Capital Territory Federa
Page 8 and 9:
Tasmania Wrest Point Casino New Zea
Page 10 and 11:
Marianne James Prof Jan McMillen Pe
Page 12 and 13:
Canberra, 30 November 1998 Senator
Page 14 and 15:
Sydney, 16-17 September 1999 Rev Fr
Page 16 and 17:
N Ward 28 Evelyn Jago 29 Territory
Page 18 and 19:
Australian Hotels Association (SA)
Page 20 and 21:
Women’s Health West 176 Norfolk I
Page 22 and 23:
BetSafe Group - Paul Symond Consult
Page 24 and 25:
B Participation in gambling: data t
Page 26 and 27:
Table B.2 Participation in gambling
Page 28 and 29:
Table B.4 Participation in gambling
Page 30 and 31:
product in excess of the price paid
Page 32 and 33:
C.2 Consumer surplus in the gamblin
Page 34 and 35:
from increased consumption resultin
Page 36 and 37:
Figure C.2 Tax and consumer surplus
Page 38 and 39:
Table C.3 Price elasticities of dem
Page 40 and 41:
Figure C.3 Consumer surplus for pro
Page 42 and 43:
Box C.1 continued (e) That part of
Page 44 and 45:
Table C.4 continued Wagering Lotter
Page 46 and 47:
s n = share of gambling expenditure
Page 48 and 49:
Figure C.6 Demand for gambling by p
Page 50 and 51:
• the triangular area ’g’ whi
Page 52 and 53:
The Commission’s treatment falls
Page 54 and 55:
Box C.4 Explaining the lack of vari
Page 56 and 57:
demand may become elastic, as peopl
Page 58 and 59:
There are a number possible explana
Page 60 and 61:
• Firstly, there has been extraor
Page 62 and 63:
E Gambling in indigenous communitie
Page 64 and 65:
The pattern of institutionally-base
Page 66 and 67:
chase the “miracles” offered by
Page 68 and 69:
F National Gambling Survey F.1 Intr
Page 70 and 71:
F.2 The questionnaire Development o
Page 72 and 73:
The use of this sampling approach m
Page 74 and 75:
Box F.1 List of gambling activities
Page 76 and 77:
• Big spending regular or less fr
Page 78 and 79:
Questions asked of all respondents
Page 80 and 81:
Comparisons of aggregate expenditur
Page 82 and 83:
elated to their gambling — all
Page 84 and 85:
Interview duration As with any ques
Page 86 and 87:
ecause of non-payment), while there
Page 88 and 89:
• post-weighting the sample data
Page 90 and 91:
particular area/age/gender cell fro
Page 92 and 93:
esult in turn reflects the survey p
Page 94 and 95:
F.11 Contact and participation rate
Page 96 and 97:
Being aware of the need to minimise
Page 98 and 99:
NATIONAL GAMBLING SURVEY F.31
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
Page 116 and 117:
Page 119 and 120:
F.52 GAMBLING
Page 121 and 122:
F.54 GAMBLING
Page 123 and 124:
F.56 GAMBLING
Page 125 and 126:
F.58 GAMBLING
Page 127 and 128:
F.60 GAMBLING
Page 129 and 130:
F.62 GAMBLING
Page 131 and 132:
F.64 GAMBLING
Page 133 and 134:
F.66 GAMBLING
Page 135 and 136:
G Survey of Clients of Counselling
Page 137 and 138:
G.3 Question by question A1 to A3
Page 139 and 140:
D23 — is concerned with the mecha
Page 141 and 142:
of problem gambling (eg how many ch
Page 143 and 144:
CLIENT SURVEY G.9
Page 145 and 146:
CLIENT SURVEY G.11
Page 147 and 148:
CLIENT SURVEY G.13
Page 149 and 150:
CLIENT SURVEY G.15
Page 151 and 152:
CLIENT SURVEY G.17
Page 153 and 154:
CLIENT SURVEY G.19
Page 155 and 156:
CLIENT SURVEY G.21
Page 157 and 158:
CLIENT SURVEY G.23
Page 159 and 160:
CLIENT SURVEY G.25
Page 161 and 162:
Problem gamblers may subsequently b
Page 163 and 164:
For a subset of 856 clients in 1996
Page 165 and 166:
Table H.3 Variable Logistic estimat
Page 167 and 168:
Prison, South Australia’s main re
Page 169 and 170:
• “Has your gambling ever led y
Page 171 and 172:
elicit information on vocational, f
Page 173 and 174:
This finding is consistent with the
Page 175 and 176:
H.5 What crimes do problem gamblers
Page 177 and 178:
Other more violent crimes such as b
Page 179 and 180:
But as noted above, police statisti
Page 181 and 182:
H.8 Problem gambling and loan shark
Page 183 and 184:
epayments were required — but mos
Page 185 and 186:
State Gaming Authorities data The s
Page 187 and 188:
Table I.2 Unweighted estimation Med
Page 189 and 190:
machines. There is no statistically
Page 191 and 192:
Figure I.2 Expenditure on gaming ma
Page 193 and 194:
Weighted results The Commission’s
Page 195 and 196:
Table I.7 Summary of Victorian metr
Page 197 and 198:
Table I.9 Summary of Queensland reg
Page 199 and 200:
it is likely to represent the more
Page 201 and 202:
Table J.1 presents the information
Page 203 and 204:
suffer from some of the adverse con
Page 205 and 206:
• costs of gambling counselling s
Page 207 and 208:
To the extent that borrowed money i
Page 209 and 210:
This fee is only taken in estates w
Page 211 and 212:
• for a higher estimate, the numb
Page 213 and 214:
The Commission has assumed that the
Page 215 and 216:
• to estimate the income lost ove
Page 217 and 218:
the Commission has used this estima
Page 219 and 220:
• 336 people receiving a jail sen
Page 221 and 222:
states offer up to $50 000 each for
Page 223 and 224:
As indicated in table J.6, where pr
Page 225 and 226:
seen as part of the informal contra
Page 227 and 228:
Almost all divorce cases are uncont
Page 229 and 230:
of their gambling during the period
Page 231 and 232:
Suicide ideation The Commission’s
Page 233 and 234:
Table J.10 continued People a Per p
Page 235 and 236:
Table J.12 Value of annual transfer
Page 237 and 238:
pathological and problem gamblers a
Page 239 and 240:
Table K.2 Summary of cost estimates
Page 241 and 242:
L Survey of Counselling Services Th
Page 243 and 244:
Several academics working in the ar
Page 245 and 246:
L.4 Survey results Nature of agenci
Page 247 and 248:
Number of clients The survey includ
Page 249 and 250:
Characteristics of gambling clients
Page 251 and 252:
counselling because of someone else
Page 253 and 254:
Table L.17 Full time equivalent pai
Page 255 and 256:
Table L.20 Approaches used to help
Page 257 and 258:
Table L.24 Gambling clients ending
Page 259 and 260:
More specifically, agencies said fu
Page 261 and 262:
Centacare (Whyalla) Centre for Anxi
Page 263 and 264:
SURVEY OF COUNSELLING SERVICES L.23
Page 265 and 266:
Page 267 and 268:
Page 269 and 270:
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
Page 299 and 300:
Winnings Progressive jackpots are p
Page 301 and 302:
Bets and losses Bets and losses on
Page 303 and 304:
In Japan, the minimum amount requir
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 and 310:
O Displacement of illegal gambling?
Page 311 and 312:
survive together because they cater
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
Page 325 and 326:
ACIL (sub. D233. p. 48) claimed tha
Page 327 and 328:
P.5 Estimating the expenditure shar
Page 329 and 330:
expenditures shares are shown in ta
Page 331 and 332:
of counselling agencies is necessar
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
Page 373 and 374: Dickerson et al (1998, p. 79) for e
Page 375 and 376: However, the survey used a set of p
Page 377 and 378: T.3 The logistic approach The NORC
Page 379 and 380: Table T.3 Method Various estimates
Page 381 and 382: such as France and the US (Casino I
Page 383 and 384: Table U.2 An example of an outcome
Page 385 and 386: intensity on the 85.15 per cent Cas
Page 387 and 388: considers that the machine price
Page 389 and 390: egular playing (30 years) the proba
Page 391 and 392: for an amount of time that is less
Page 393: U.6 The gambler’s fallacy Gambler
Page 397 and 398: V Use of the SOGS in Australian gam
Page 399 and 400: Differences in question wording and
Page 401 and 402: References AADAC (Alberta Alcohol a
Page 403 and 404: —— 1998, Efficient Tobacco Taxa
Page 405 and 406: Bickerdyke, I. and Lattimore, R. 19
Page 407 and 408: ——, Dickerson, M. and Harley, B
Page 409 and 410: Campbell, C. and Smith G. 1998, Can
Page 411 and 412: —— and Winefield, A.H. 1996, Co
Page 413 and 414: ——, Baxter, P., Boreham, P., Ha
Page 415 and 416: Ferguson, B. 1996, A Note on the In
Page 417 and 418: —— 1997, Legalised Gambling as
Page 419 and 420: Horner, T. and Bradfield, G. 1998,
Page 421 and 422: ——, Marston, A., Singer, R., Wi
Page 423 and 424: Gambling Studies, ‘Towards 2000:
Page 425 and 426: —— 1995b, Social impacts of urb
Page 427 and 428: —— and Ohtsuka, K. 1999, ‘The
Page 429 and 430: NT Select Committee (Select Committ
Page 431 and 432: Prosser, G., Breen, H., Weeks, P. a
Page 433 and 434: Single, E., Collins, D., Easton, B.
Page 435 and 436: Thomas, S., Jackson, A., Thomason,
Page 437 and 438: —— 1997, Gambling and Problem G
show all

Australia's Gambling Industries - Productivity Commission

Create successful ePaper yourself

Delete template?

Save as template?