Gambling Reforms

I spoke in parliament yesterday about the government's reforms to address problem gambling.
National Gambling Reform, 27 November 2012

May I start with a story from an email sent to me by one of my constituents, Gary Hatcliffe. He wrote to me as follows:

'My name is Gary Hatcliffe. The pokies have taken away the past 25 years of living for me. Some would say I had a choice; unfortunately, the addiction overpowered my logical thought processes. As a result, I have just completed 7 months of live-in rehabilitation and I now reside in a half-way house in Canberra. Eight months ago I was destitute in Melbourne (having hit rock bottom once again) and I was going to kill myself.

'I have, only just this weekend, opened up the third meeting of Gamblers Anonymous in Canberra.'

He finishes up his email:

'PLEASE KEEP UP YOUR GOOD WORK FOR POKIE REFORM. MY LIFE WILL FOREVER BE AT RISK UNTIL MY ACCESS IS TAKEN AWAY FROM ME. I envisage, down the track with the mandatory pre-commitment and a nationally regulated card system, to be able to ban myself from using any machine in Australia. This will allow me to still be social and go into a club with friends, have a meal and a couple of drinks, and know that I cannot use the pokies because I will not have access to a 'pokie' card.

'Warm regards,

'Gary Hatcliffe.'

Mr Hatcliffe's story is sadly all too common across Australia. An article in the Sydney Morning Herald last year noted the phenomenon in St Johns Park Bowling Club where at 2.30 on a Sunday morning the club starts handing out $100 notes. In order to win those $100 notes gamblers need to swipe their membership cards at a reward centre and wait. The article went on to talk about other incidents and other factors that ensure that gamblers are unable to take themselves out of the zone, unable to stop, reflect on how much they have spent and decide whether they want to stop playing. It pointed out that the machines in St Johns have an attendant button—a sort of room service so pokie players do not have to leave their machines to get a drink. The practice is banned in Victoria but popular in New South Wales.

The article tells the story of a tense Fijian woman, aged about 70, who tells the journalist:

"I've lost $400 tonight,'' she says, snorting involuntarily each time she smacks the machine and chases her losses. ''I lost $3000,'' she adds, snorting again, before locking eyes back on the spinning reels, too distracted to explain.

A counsellor by the name of Wendy who works with problem gamblers in that part of Australia says:

'Once they are on that machine, the world could blow up around them, and they really wouldn't notice.'

She goes on to say:

'Often people will say to me: 'I looked up and, oh my God, I've been there for five hours. I didn't eat anything, I didn't drink anything, I didn't go to the toilet.''

And then I will ask them how much money did they put into the machine and they'll go: 'I don't know, I was just feeding it money.'

A player named Yvonne from Wentworthville says:

'Your mind stops, you don't think.'

The article finishes up with the story of Toai Thi Nguyen, an illiterate 55-year-old Vietnamese mother of four who racked up debts of $28,000 to loan sharks through her gambling and found herself eventually succumbing to the threats of the loan sharks. She flew to Vietnam, where a gun was held to her head. She returned with 10 kilograms of pseudoephedrine, used for making ice, and was intercepted by Customs. She is now serving five years in jail for this.

A Parliamentary Library FlagPost article by Amanda Biggs noted that the prevalence of problem gambling is highest in low socioeconomic areas of Australia. It noted, for example, that in Greater Dandenong the average weekly income is $426 and pokie losses are $1,110 per adult. By contrast, Boroondara has an average income of $836 a week and average losses of $153 an adult. So this is very much a social justice issue. This is an issue where those of us who care about the most disadvantaged in Australia are compelled to act.

I found it surprising that the member for Menzies was saying that it is not appropriate for the federal government to step in here, that this is an area where we ought to respect states rights—whatever that means. As a representative of the ACT, I could not help thinking: is this the same member for Menzies who introduced a private member's bill to override the rights of the territories on the issue of euthanasia? I think it might be. I think it might be the very same member for Menzies. So, when it suits him, he is happy to come into this place and use federal authority to override other jurisdictions, but, on an issue that he does not think is appropriate, he will not do that.

I think in this case it is appropriate to have a national approach. It is a national approach that is grounded in behavioural economics. The great thing about precommitment is that no-one is forced to do anything. You are simply asked to set your limit. That limit that you set can be as high or as low as you want it to be. All we are doing with mandatory precommitment is allowing people to keep the promises that they make to themselves. We are allowing people to set a limit and to have the club assist them in sticking to that limit. We know—as the stories I read out this evening illustrated so powerfully—that people get in the zone. They walk into a club or pub intending to spend no more than $200, and they walk out scratching their head wondering where the $500 went. They chase their losses. They lose track of time. They lose perspective on how much they are willing to gamble. All mandatory precommitment does is that it ensures that people set that number and that the clubs help them stick to it.

Here in the ACT, a trial of mandatory precommitment will be taking place. The Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, has set up a Trial Oversight Committee that includes representatives from ClubsACT, the Tradies, the ACT Council of Social Service, the ACT Club Managers Association, United Voice, the Australian Institute of Family Studies and the ACT and Australian governments. That committee has been welcomed by participants in this debate. The CEO of ClubsACT, Jeff House, has said:

'Whilst there is a large body of work that needs to be completed before the trial can commence, the establishment of this Oversight Committee is a key step in the timeline which will allow us to make some initial progress on completing that body of work. I look forward to continuing to work with Minister Macklin and her department.'

I commend Mr House for the constructive way in which he and his members have worked with this government. I know the same is true of ACT clubs that are outside ClubsACT. I welcome the constructive way in which the ACT Minister for Gaming and Racing, Joy Burch, has worked. She has said, for example:

'A trial of mandatory pre-committment in the ACT will build on the substantial reforms already underway in the ACT.'

That commitment to evidence based policymaking is a hallmark of this government. I am very pleased that the Australian Institute of Family Studies and their head, Alan Hayes, have been actively involved in thinking through the way in which the ACT trial will operate and thinking through the best way of evaluating this.

I want to go to something that you often hear from those opposite—that, because Queanbeyan clubs are not affected by mandatory precommitment, such a trial would automatically fail. The thing about this criticism is that it fundamentally misunderstands what mandatory precommitment does. With mandatory precommitment, the government does not set a cap on what you can bet; it asks you to set your own cap. Those opposite suggest that people will flee to Queanbeyan in order to avoid the cap. You do not need to do that. If you think at the outset that you want a higher limit, you set that higher limit yourself. That is the thing about mandatory precommitment. We are helping you to keep the promise that you make to yourself. If you say that you want to stop when you spend $200, we help you to stop when you hit $200. So people are not going to flee to Queanbeyan as a result of this.

What is going to happen is that we are going to help them break out of that zone in which people end up spending more than they intended to, they go beyond their discretionary income and they start spending money that was intended for food, groceries and the kids. You hear some of the most horrendous stories around the impact of problem gambling. One that sticks in my mind is of a little boy who says: 'Dad, could we get a pokie machine at home so Mum can stay at home with us and gamble here?' Those sorts of stories about families that are torn apart by the impact of problem gambling are stories that ought to impel us in this House to act.

The bill that is before the House will ensure that all gaming machines are part of a state-wide precommitment system, and that they display electronic warnings, by 2016—recognising that small venues will need longer implementation time lines. New machines, manufactured or imported, from the end of 2013 will be capable of supporting precommitment. We are placing a limit on ATM withdrawal of $250. And we are making sure that these changes are implemented in conjunction with stakeholders. There will be a Productivity Commission review in 2014 that will assess the progress of the measures.

I am often surprised when those opposite say that we need more evidence on this, because we have a substantial body of evidence, the most important of which is the Productivity Commission's report on problem gambling. What we need to do now is to take the steps to implement that report.

I am pleased too that we are going to see an Australian Gambling Research Centre that will be run as part of the Australian Institute of Family Studies. Under the leadership of Alan Hayes, the Australian Institute of Family Studies has become a premier policymaking body across social and economic policy. It will be an important part of making sure that we assess the ACT trial and that we continue to evaluate what we are doing in this area.

The government's reforms are grounded in the notion of what Cass Sunstein and Richard Thaler have called libertarian paternalism—that is, we ought not to impose on people any more regulation than is necessary. The thing about libertarian paternalism is that those opposite ought to like this because it is libertarian, because you set the limit yourself. If you want that limit to be $10,000 a month, that is the limit you can set. If you want it to be $200 a month, that is what you set. The paternalism comes from something that you impose on yourself. The paternalism is your ability to say: 'I've got a self-control problem. Don't let me go past what the family's discretionary budget allows. Don't let me spend more than I want to, when I get into the zone at three o'clock in the morning with drinks coming to me and without the perspective of where gambling ought to be in my life.'

The story of Gary Hatcliffe that I told at the outset is one that all of us in this place should bear in mind. Mr Hatcliffe is aware of his challenges. He is aware of his own self-control problem. He is aware that it is only through mandatory precommitment that he will be able to go into a club and enjoy a drink with his mates without again getting caught in the zone.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.