Gambling Reform Alliance Is Suing Poker Machine Manufacturer to Put an End to Pokies

Wednesday, April 13th, 2016 | Written by April Bergman
Gambling Reform Alliance Is Suing Poker Machine Manufacturer to Put an End to Pokies

The Australian Broadcasting Corporation (ABC) reports that the Gambling Reform Alliance is pressing forward with a lawsuit against an unnamed pokies manufacturer, would put an end to poker machines in Australia. ABC has called the lawsuit a “landmark” case, but pundits are skeptical whether the GRA can win its litigation.

Australians spend more per capita on gambling than any other group of people on Earth. A 2012 study showed that Aussies spend $1,179 per person on gambling each year. Poker machines or “pokies” (known as slot machines in the US) take two-thirds of that money. Roughly 40% of the world’s gaming machines are found in Australia, which beats all other nations on a per capita basis for the amount of cash lost per person on EGMs.

$11 Billion in Pokies Revenue

$11 billion a year is lost playing the pokies. Neutral observers might suggest gamblers are willing participants in this transfer of cash — that they choose to gamble. At the heart of the The Gambling Reform Alliance’s case is evidence that is not the case.

The Gambling Reform Alliance says it has evidence that designers of gaming machines use triggers to “get inside people’s brains” and target “the most vulnerable people”. The GRA argues that people at lowest end of the economic spectrum — and therefore those most vulnerable to losses of income — are the ones the Australian gaming industry targets.

Lawyers Analyzing Slots Psychology

Geoff Lake, president of Gambling Reform Alliance, says that GRE lawyers are analyzing how the gambling industry triggers problem gambling responses in people. They are studying how people’s brains react to pokies when they are “going through a tough time.

Geoff Lake is not the only one talking about the insidious nature of electronic gaming machines and the companies who own them. Last month, Queensland MP Billy Gordon accused sports betting companies of targeting Aboriginals with specific smartphone ads through social media. Gordon, who spoke from his own family experiences as an Aboriginal, said families in remote communities often share a family smartphone, so the gaming companies are encouraging underage problem gambling.

GTA Director Dismisses Suit as Frivolous

Ross Ferrar of the Gaming Technologies Alliance dismissed the lawsuit as any kind of factor in the Australian gambling industry.

He suggested such litigation is a customary part of life for gaming manufacturers, stating, “Poker machine manufacturers and indeed poker machines are scrutinized heavily, that’s just part of day-to-day life. Any further scrutiny will be passed with flying colors, we are 100 percent confident of that.

Mr. Ferrar is right in one respect: it is hard to see this lawsuit affecting the gambling industry of Australia.

The various governments of Australia receive about $5.5 billion in revenues from the gambling industry each year. About $4 billion of that money is from the poker machines. While politicians might give lip service to helping problem gamblers, there are few signs they are willing to give back tax revenues which come from the losses of problem gamblers.

Problem Gambling Statistics

Gaming industry executives point out that only 1% to 2% of gamblers show signs of gambling addiction. What they usually do not mention is that at least 20% of gaming revenues come from that 1% to 2% who are problem gamblers. Some studies have the figure higher — perhaps as much as 50%.

Recent statistics show that increased gaming revenues come from addictive gambling. When the Tony Abbott government came to power, it scrapped most of Julia Gillard’s gambling reforms. One of those reforms was a strict limit on pokies losses to $100 a day. Instead, the number was increased to $2000.

Tony Abbott’s Impact

That created a mass increase in the profitability of pokies. Gaming executives played coy in trying to explain why the poker machines were collecting more cash. Some suggested it was a better economy, while others suggested it was better placement, better advertising, or the reason was simply impossible to know. A better explanation is the problem gamblers are now able to lose 20 times more money at a time.

One way of knowing the impact is to see who is playing the pokies. In 2000, roughly 80% of adult Australians gambled each year. In 2014, 68% of Aussies gambled each year. The percentage of gamblers has decreased significantly.

Declining Percentage of Aussies Gamble

The 2001 census shows that 18.76 million people lived in Australia 15 years ago, with about 75% of the population eligible to gamble. That means 14.07 million adults lived in Australia at the time and 11.256 million were gamblers. The latest census showed that 21.5 million live in Australia, with about 16.125 eligible to legally gamble. 68% of that number would be a 10.95 million — a decline of 3.12 million gamblers playing the pokies.

Despite the decline in the gross number of people playing the pokies, revenues are near an all-time high. Opponents of restrictions on pokies gambling might argue that inflation accounts for the change, or that high rollers account for the differences. Inflation has a role. High rollers might account for the changes, but then, high rollers can have a gambling problem, too. Within the last five years, there’s been a national story about a billionaire who lost everything at the casinos.

Long Odds That Lawsuit Will Win

One gets the idea such arguments are academic. No one much cares if a billionaire loses their fortune and, frankly, people do not care enough that gamblers with low-income can lose $2000 a night on the pokies. Poker machines are big business.

This lawsuit is unlikely to gain traction. The fact of the matter is, the Gambling Reform Alliance might prove in court that poker machines are immoral, but they cannot prove they are illegal. Australian voters support politicians who support the gambling industry, so the pokies are not going away anytime soon. It would take a sea change in public opinion — incontrovertible proof that poker machines affect the human brain — to change the laws. GRA lawyers are not the ones to find that proof.