Does Australia have a gambling problem?

Glyn Davis
G'day, I'm Glyn Davis, and welcome to the Policy Shop, a place where we think about policy choices.

Male 1
It's main source of food is money, your money. Last year it sucked $200 million out of our economy. It's controlled by big business and targets those who can least afford it. This Pokie parasite is sucking Tasmania dry. Another 20 years - let's squash it now or else.

Glyn Davis
Australia outstrips every nation in the world when it comes to gambling. Based on per capita spending we are the world's most prolific gamblers. Last year, Australians lost nearly $24 billion to gambling, more than half of it poured into pokie machines at clubs and pubs across the country.

Indeed, Australia has more pokie machines per person than in any other country in the world, nearly 200,000 of them. New South Wales alone boasts 10 per cent of the world's pokie machines, second only to Nevada. When these investments are threatened by proposed policy changes, the industry is not afraid to spend substantial sums defending its machines and the revenues they generate.

And Australia's gambling is not just about pokies, digital sports betting through the internet and the phone has swelled by more than 10 per cent a year over recent times. So does our nation have a gambling problem and what are the policy implications of a close relationship between gambling interests and political contests? Research suggests that a typical problem gambler affects the lives of six other Australians.

Yet when gambling does find a place on the political agenda the result is usually a firm affirmation of the status quo. To help us explore these questions I'm joined in the studio by Dr Charles Livingstone, a Senior Lecturer in the School of Public Health and Preventative Medicine at Monash University.

Charles, welcome to the podcast.

Charles Livingstone
Thank you.

Glyn Davis
We're also joined in the studio by Stephen Conroy, the Executive Director of Responsible Wagering Australia, the peak body representing the Australian online wagering industry. Stephen is one of many former politicians now associated with the gambling industry. Stephen, welcome to the podcast.

Stephen Conroy
Good to be with you.

Glyn Davis
Charles, last year's HILDA survey by the Melbourne Institute provides a comprehensive picture of gambling in Australia but can you describe for our listeners in more detail the extent of this industry.

Charles Livingstone
The people in Australia gamble about $24 billion a year, that's how much they lose, the turnover is something like 10 times that. So it's a very big industry, it's bigger than packaged liquor. It also affects millions of people through the harm that's associated with it. Most of the effect comes from poker machine gambling, 75 per cent of the harm associated with gambling in Australia is attributable to poker machine gambling. About 62 per cent of expenditure on gambling in Australia goes through poker machines, including poker machines in casinos.

More than half of the money that goes through gambling in Australia goes through pokies in pubs and clubs, and as you also said in your introduction, most of those are in New South Wales. So what we're looking at is an industry which really locates its products in areas where people are doing it tough, in areas of stress, socioeconomic and otherwise, and which makes most of its money from problem gamblers.

People experiencing harm at either significant or moderate levels account for 62 per cent of the money that goes through poker machines and around 35 per cent of the money that generally goes through gambling elsewhere. So what we're looking at is an industry which is highly aggressive in its targeting, has a capacity to cause enormous harm, and is focused on people who are doing it tough.

It's a very predatory industry I think and it's one which is highly promoted and which has enormously powerful links with politicians and the policy process
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Glyn Davis
Stephen, you lead Responsible Wagering Australia, described by some as a social aspect public relations organisation, essentially a body created by industry to argue the case for public acceptance, at least of online gambling. Can you tell us about the role of Responsible Wagering Australia and how does it respond to the critique you've just heard about the industry which you represent?

Stephen Conroy
The RWA represents, as you mentioned, the online gaming companies. So companies like Ladbrokes, Sportsbet, CrownBet, Betfair, bet365. So we don't have any poker machine relations at all, they're a completely different sector which the policy debates in that area we don't cover, don't address.

So the online gaming sector, about 18 months ago decided to form a new body to advance the debate around a number of significant policy issues and particularly in an area like the amount of gambling advertising.

I think every Australian was heartily sick of the amount of online gaming ads, which is why RWA very much led the campaign to see the government reduce the amount of gambling ads that are going to be visible. I think in a couple of weeks' time there'll be a significant reduction when that new regime kicks in, a very significant reduction in the number of gambling ads, particularly when kids are watching. So that's the sort of area where we've been focused.

Then there's been a range of regulatory measures that RWA members have adopted and have been championing to try and address a number of the concerns around the problem gambling issue. So we have worked very closely with the federal government and state governments to support the National Consumer Protection Framework, which legislation we hope will be into the Parliament over the next few months and will be introduced with good luck and management towards the end of this year.

There will be some very significant changes which RWA has been supporting strongly, publicly, since we were formed just over 15 months ago.

Glyn Davis
We started with poker machines but of course there are many other ways to wager, casinos, lotteries, lotto, and increasingly digital gambling which you are part of. At present, digital gambling is a smaller portion of the market but its share is growing considerably, and it's begun to attract international and European operators who have obtained licences, particularly in the lower tax Northern Territory. At what point does the gambling market hit saturation?

Stephen Conroy
Well I think if you look at the number of gambling ads that you've been seeing over the last couple of years it's reached it. But the barriers to entry are relatively low and just last Spring Racing Carnival here in Melbourne, two new major companies launched, and one of them put $20 million into an advertising campaign over the Spring Racing Carnival to announce it coming into the country.

It was actually a local one rather than an overseas one. It shows you that there is a lot of interest and a lot of competition in the sector at the moment. So, as you mentioned, if you add up the losses out of that $24 billion that we were talking about, nearly $20 billion come from gaming machines, casinos, and lotteries. But it is a very fair point to say that the online gaming sector is starting to grow and our members are very conscious of the need to respond to the community and their concerns.

We have to operate a sustainable industry that has a social license, which is why we've been, to the surprise many, willing to advocate some quite restrictive changes in laws and regulations around the country.

Glyn Davis
Charles, your research suggests that certain sections of the community are targeted by pokie operators in particular. Can you say something about these communities and about the consequences?

Charles Livingstone
The people who tend to be living in areas where there is a saturation of poker machine gambling are people under social stress. Now that can include socioeconomic stress, of course, so that's one obvious form of it, so people who live in what we would generally regard as low income areas. Former working-class suburbs, et cetera, tend to have a lot of poker machines in them. But we also find is that in the outer suburban areas where people may not be poor apparently but who are living under the stress of long distances to travel, having to have a two-person income to pay their mortgage, they have to rush home to feed the kids, that sort of stress.

Often what you find is that the only social venue within cooee of their outer suburban home will be a pub with pokies in there. So those sorts of venues make very significant amounts of money. Now it is beyond doubt that the operators locate their venues in areas where they expect to make the most money, and those are the locations that broadly speaking I've just described. That includes all of the operators, including Woolworths who operate more poker machines than anyone else in the country, the Australian AFL clubs, et cetera.

I might also add that the online bookies have their own target market too and if you look at their advertising you can pretty easily discern what it is, it tends to be young men although there has been an influx of young women in recent years according to new research. I think the other thing to say about online gambling is that although it had been growing quite strongly in the period up to say 18 months ago, and it's still growing strongly, the rate of growth has declined somewhat over the recent past.

So there's something interesting happening here, and whereas about 16 per cent of people in Victoria and about 20 per cent of people in New South Wales, in any given year, will use poker machines at least once. What we see with online gambling is that the market for that is actually quite small. It tends to be less than 10 per cent. In Victoria, for example, it's around five or six per cent of the adult population. So these are not huge markets, they are growing fast, I actually think the market became saturated some time ago and we've started to see significant rationalisation of that with companies pulling out, selling shares of their businesses on and so forth.

What we're actually seeing at the moment, I think, and I think part of what Stephen's business is about is overseeing the transition from a large number of operators, some of whom are small and hoping to be bought up, to a much smaller number, probably multinational corporations, and that's certainly the trend we're seeing now. Now, I'm glad that they've supported the consumer protection initiatives, which were advocated initially by people from the financial counselling sector and so on and advocated in the end by Mr O'Farrell's review.

But I mean I think it's important to remember that the construct that they're using, the responsible gambling construct, is one which has traditionally been used by the industry in the same way that the alcohol industry uses a concept of responsible drinking. That is it downloads ultimate responsibility onto individuals and it's not productive of a safer, harm free environment for gambling.

I'd like to talk about that a bit later if we can but the nomenclature, the words we use to describe this business, lead to the type of policies we pursue, and the types of policies we pursue are much more likely to create a sustainable ongoing gambling environment than this sort of focus on responsible gambling.

Glyn Davis
Stephen, the notion of responsible gambling does indeed suggest that the individual is at the heart of policy concerns. Is this the expectation of the industry and tell us something about this national consumer legislation that you mentioned?

Stephen Conroy
Well, I think Charles makes a number of very good points. he real key is not to try and get caught up in an argument about what do the words responsible gambling mean? Now I accept the points that Charles is making that it can mean lots of different things to different people. But the key is what are the policies being advanced and being supported?

So Responsible Wagering decided that it needed to move into a different space. All the points that Charles outlines around the physical world of gambling are very fair commentary.

So when it came to a debate when we were formed, our members had wanted to see the introduction of a national self-exclusion register that would allow people to exclude from all online gambling sites and Apps through one simple process. So if the person thinks right, now I've got to stop, you can now go through one simple process, or you will when this is all introduced, one simple process that will see off - all your accounts are closed across everyone.

So the average Australian has about 2.4 gambling Apps on their phone, so you're basically closed out of all of them. You can nominate whether it's for six months, whether it's for 12 months, whether it's for three years, and then the decision is ultimately up to you whether you want to return to the market. Our members are very keen to not have people who have been identified as problem gamblers and would very much like to not accept them back at some point in the future if they've been on the national self-exclusion register.

So we see this as a big important step forward and in fact a number of our members have banded together and actually already begun work in creating the actual register, doing the coding, working with government to deliver that. So we think that's…

Glyn Davis
It will rely though on all providers agreeing to that.

Stephen Conroy
No, it will rely on government who have said this is going to happen.

Glyn Davis
Okay, so regulation.
[Over speaking]

Stephen Conroy
Yes, this is regulation. We wanted it to be uniform and everyone had to be affected by it. We didn't want this opt in opt out suggestion that some have had because we don't think - it would be like if you say, hey, I don't want to go to this pub anymore, I'm excluded from this pub but you go to the pub next door. I mean that's an absurd situation and we think now we've got consensus across the board, you're on the register, you have all your accounts closed.

We want to see the simplification of what's called turnover requirements from bonus bets, so a win from a bonus bet must be able to be withdrawn. So we don't want this game where people get trapped inside the system and they can't their money out. That's been a legitimate criticism in the past and so that's part of this framework. We want customers to opt in before receiving marketing materials. So there's been a lot of criticism of the sector that they just absolutely deluge people when it wasn't solicited.

We want to see an end to that. People must tick the box saying, yes, I want to receive promotional material. We want to see compulsory activity statements that clearly shows wins and losses. So we want like your monthly MasterCard statement, here's how much you've spent, here's your total, here's your wins, here's your losses. So we want people to be able to see that. It's not been not there, it's just been very hard to find.

So we want that on front page, we want to see that basically you've got a box in there when you open your App or you open your - just got to be able to one click, two clicks, to drop down your menu to see what you've got, or if it's possible if you're on a laptop that it's there in the corner so you can see it as early and simply as possible. Because there's been a lot of criticism that people have had this information it's just been very hard to collate and very hard to find. You've got to go through and do the running total yourself.

We accept all of those criticisms and I think we will see a very good outcome there as part of this legislation. We want to - obviously compulsory staff training in the responsible conduct of gambling and a reduction in the timeframe for the verification of consumer's identity from 45 days to 14 days. So I think Charles made the point that a lot of this stuff has been championed by those who have been concerned about gambling and its impacts, and very much our members are walking the walk not just talking the talk.

Glyn Davis
Charles, a recent study pointed to the strong links between mental illness and people who have gambling addiction problems.

Charles Livingstone
Well, you know the direction of causality is not clear but people who have mental health issues also tend to have higher rates of gambling harm inflicted upon them. So, as I say, if you've got a mental illness some people use gambling as a way to self-medicate just as other people use illicit drugs and so on. So I mean the problem with gambling is that it is addictive, it provides the same sort of reward in one's neural system as taking illicit drugs does, we know that and poker machines are particularly good at that.

But the event frequency of gambling machines is what makes them so addictive. But what we're now seeing with online Apps and similar devices that people can use to place wagers on a rapid basis is that the event frequency, the speed with which you can repeat the bet is becoming quite rapid. That almost certainly is likely to lead to a higher rate of addiction in the future as these machines become more successful and achieve what they set out to do, which is to get people attuned to them.

So that's a big issue. The other problem we've got of course is that if the gambling industry is seeking these sorts of people as customers then their responsibility is way out the window. It's a very, very difficult issue to countenance, that you would deliberately go after people who have these sorts of mental health problems, or that you would continue to deploy your product knowing that this occurs. This is one of the major problems we've got in trying to inject some sense of decency into the gambling industry. They've always been reliant on this group and they seem to show no particular interest in winding back that reliance.

Glyn Davis
So when governments have decided to tackle tobacco addiction, for example, they moved from health promotion messages - please don't smoke - to economic cost, to restricted places of smoking, to powerful images on tobacco packages to make the personal cost of the behaviour very evident. Yet many of our responses to gambling still seem to be about awareness issues and about trying to encourage individuals to show restraint.

Charles Livingstone
That's exactly right and that's why the issue of this sort of notion of responsible gambling and the spectacle of the problem gambler is such a big deal, it's not just words, this is what sets out the problem that is to be solved.

Now the problem that is to be solved is not a problem of responsible gambling, a problem of individual responsibility, the problem is a problem of unsafe products being marketed and promoted in unsafe ways, which are ubiquitously available, and which harm a very significant proportion of those who use them as they were intended to be used.

So if we actually want to solve the problem of gambling harm we have to reconfigure the nature of that problem and adopt the sort of systems approach, which has been very successful as you point out in tobacco control, and which requires material changes to regulatory frameworks, which provide strong disincentives for people to participate in that type of behaviour.

The same thing happened with motor vehicle injuries. When we got serious about motor vehicle injuries and stopped just blaming people for driving too fast, we started to discover many, many mechanisms which provided significant leverage on how we could constrain the rate of injuring.

Of course, one of the things we teach our students in public health is that we have been incredibly successful in driving down both the rate of smoking and the rate of accidents and mortality on the road by adopting material measures across a range of different domains. That has been the great success story of public health in the 20th century.

Glyn Davis
So the initiatives that Stephen outlined for us, that his organisation are promoting and hope to see regulated, are they in the tradition of beginning to change incentives to evolve or are they focused on problem individuals as it were?

Charles Livingstone
Yes, I think the real issue still is that they're focused on problem individuals. So, for example, whilst a national self-exclusion register is a great idea, I don't doubt that for a second, the problem is by the time you get to the point of self-excluding you've probably lost most of your assets and are in serious danger of losing your partner, your house, and everything else you hold dear. Now that's the reality, people don't self-exclude until they're close to the bottom of the barrel.

But what we also know is that particularly with an online platform because the whole thing is digital, it's actually really easy to spot the spiral into dangerous behaviour very early on, and to undertake appropriate measures to make sure people realise that and stop what they're doing.

Now in some countries they have trialled monitoring systems which impose an algorithm across the top, if you like, of the data that is generated by people's gambling behaviour, and demonstrated unequivocally, unequivocally, that it is easy to spot these emerging patterns and to intervene if you have the will to do so to stop them.

So this is something that even in Britain is being talked about at the moment, although the British bookmakers have resisted it very strenuously. So I think what we need to do is shift from the notion that it's up to the individual, even with some warnings signs and all the rest of it, that they should be able to take responsibility and shift that responsibility onto the providers, just as we did with cars and just as we have done with tobacco. That we make it very difficult for them to continue to provide products to people who are experiencing harm or are starting to show the signs of someone experiencing harm.

I must say, even in the responsible gambling codes of conduct, which are universally adopted, but universally non-enforced in Australia, gambling providers are supposed to intervene if people show signs of gambling in a harmful way. They never do and that's largely because it's left up to the judgement of individuals, whether in gambling venues or at online bookie sites to decide if someone is doing that.

But we know that an algorithm does it a lot better than any human can and can generate automatic prompts, which don't even have to go through human attention, to make sure people understand what's going on and that they've got problems.

Glyn Davis
Stephen, how does the industry respond to concerns that the measures put in place are not going to be sufficient?

Stephen Conroy
Each of our members, and this is important to stress, there are plenty of online sites that aren't members of ours. All of our members have an internal system whereby, if you like, at certain points it might be the frequency, it might be the volume, but there are checks and balances that are automatic. So you might set off what you call a red flag trigger, you might have bet 30 times in five minutes, you might have bet - suddenly your average bet per month might be $500 or something and you're betting $5000.

So there are triggers like that that our members would make a phone call to have a discussion. Usually we have people who have been trained by counsellors as part of our responsible wagering guidelines. So there is a range of measures like that that our members have been involved in. That's not to say everything in the past and one of the reasons we exist for the last 15 months is because clearly the companies haven't been prepared to do as much as they could have in the past.

That's why our members, the five or six members that we have, have stepped up and said, no, we want to see significant change. So we are monitoring those trials, we're in discussions with the financial counsellors about ways that we can try and draw them into the process quicker than has been the case in the past. So we welcome those trials and we look forward to seeing the results of them as they're being completed and we're able to analyse them and talk with our members about them.

Glyn Davis
Can you say something about the restrictions on advertising that you flagged.

Stephen Conroy
Yes, so we've supported the recent outdoor advertising, for instance. So there's now a ban on outdoor advertising, particularly on public transport, at train stations, on trams, on buses, at bus stops. Now there are bans on roadside signage as well. So that's all going in Victoria and many states are looking at the Victorian example and we've supported those changes.

In terms of the television, which is the one that really drives people crazy

Glyn Davis
I remember that in 2013 the soon to be Federal Treasurer Joe Hockey tapped out a message on Twitter saying, it's just wrong to have a bookie so involved in the coverage of footie.

Stephen Conroy
I held a press conference with the Prime Minister at the time, Julia Gillard, and I banned Tom Waterhouse from spruiking live odds. I think Channel 9 went - well not even across the line. I don't think they could see the line behind them. So you had Tom Waterhouse - you know you'd go, oh, now we cross live to the sidelines and you think okay we're going to get an injury report, or a bit of what happened at the half time break, and it's Tom walking down the side of the field high fiving kids leaning over the barriers then spruiking live odds.

So literally held a press conference and banned that. But back then there weren't as many companies so we didn't ban gambling advertising, but there weren't that many companies and it wasn't as prevalent. But I think that Tom Waterhouse campaign opened the floodgates, so we've had a lot of new entrants to the market. So now I think I described it on Brownlow Night, if you watched this year you would have seen every ad break, six out of eight ads in the ad break were gambling companies.

So I think the government took some very well balanced measures and I think we'll see the fruit of that in the next few weeks when the footie seasons, the NRL and the AFL start. I think you'll a significant reduction in the amount of TV advertising. Still some of our members, Sportsbet, for instance, campaigned for a whistle to whistle. So on Friday night after 8:30 Sportsbet and a number of our members were in favour of no ads during the play at all. The government had to balance a whole range of factors.

They said, well after 8:30 is adult time according to the TV codes and so gambling ads after 8:30 are okay. But some of our members actually advocated for whistle to whistle on a Friday, on a Saturday night.

Glyn Davis
Charles, has the advertising of gambling, particularly during live sports events, actually changed the way people see sport?

Charles Livingstone
Well there's no doubt that we now have substantial evidence that kids in particular see sport in a very different light to the way their parents would have. So kids can spruik the odds, they understand the different sorts of betting companies, they even understand different types of bets.

The classic story at the moment is that the kids know the odds but they don't know the numbers of the players that they're watching. So there's no doubt about that, it's had a really big effect and it's normalised the business.

So, look, I agree that the ban should be from whistle to whistle but I actually think it should be much more prohibitive even than that. I mean when we started getting traction with cigarette consumption and tobacco control was when they came out of sports entirely. There's far too much involvement with gambling companies sponsoring sporting teams of all sorts, particularly football teams and cricket teams and so on. The number of partners, quote unquote, that these codes have is quite staggering.

The money involved isn't that dramatic but it does normalise this activity. I think the NRL is probably worst at this than the AFL but both of them have a lot to answer for, and some of the clubs are getting out of gambling to some degree but we still see them very much cap in hand. I think the real problem we've got is that kids now have seen this as a normal part of the sporting activity and are starting to grow up thinking that way.

The same now is true of young men and young women. So people in their 20s are the big target market for Stephen's members and the other bookies, and they're the ones they go after quite intentionally, and they're the people that go to the footie a lot and they're the people who bet on it. So for them it's become a normal part of their daily lives on the weekend and I think that's a dangerous tendency. It's something which is likely to lead to very significant levels of harm over the years to come.

Glyn Davis
So another area where gambling addiction is often discussed is of course state government. Charles, the states and territories reaped $5.8 billion in taxing from gambling through to June 2015.

We've just witnessed the Tasmanian election that briefly put gambling front and centre, only to provoke both a sustained campaign from the gambling industry but a very firm decision by the electorate that they didn't buy the argument. Are states addicted to the revenue from gambling and what does this do to the political process?

Charles Livingstone
I think what happened in Tasmania is not so much a case of the state being addicted to the revenue as a political party being addicted to the donations revenue, which the Federal Group was able to pour into that election. They were spending 10 times as much as the Labor party I think and that clearly had an effect. I mean I was down there at various points during the campaign and the ratio of ads for the Liberals to those for the Labor Party was at least 10 to one, it was quite dramatic. Very, very significant.

But, yes, the states have had a problem with it and I mean the origin of this actually dates back to the nineties and our vertical fiscal imbalance, which was a product of the new federalism, which was initiated by Malcom Fraser's Government and pursued with the Hawke Keating Governments to some degree. So the states were broke and the gambling companies came along and said, have we got a deal for you, and that's where it took off basically.

We're still stuck in that problem. And the states simply don't have enough revenue and they don't have the taxing sources to get it. So I think Keating said, never get between a premier and a bucket of money, and unfortunately these are quite big buckets of money. So how do we wean them off that?

Well there's a number of ways we could do that. I think the first thing to do would be for the federal government to actually re-establish a national regulator, to actually enforce the provisions that are being introduced, the Interactive Gambling Act provision, which will be beefed up in months to come, and to impose a national tax system. So that the states don't compete with each other, as has been the case to rush to the bottom, which is why everybody is registered in the Northern Territory where the tax rate is something like 0.01 per cent literally. So that everybody gets a fair share and people are not having to scramble to pick up money that otherwise is going to another jurisdiction.

But the other thing that has to happen is - the Commonwealth I think is the only government in Australia which has relatively clean hands, and my strong view would be that the best way to see a reduction in harms associated with gambling would be for the federal government to start legislating for a levy on poker machines, with which it can help to buy some of the dependence off state governments over a period of time.

So essentially establish a future fund of some sort and then use the interest from that to help reduce the dependency the state governments have on this sort of gambling expenditure. The two big states of course for this are Victoria and New South Wales, but Queensland and South Australia are not that far behind. So you've got dependency in the billions of dollars, that's hard, it's the cost of running a major hospital. Of course, it's hard to wean a government off that, but I think it can be done and it needs to happen over a period of time. No one expects a big bang outcome but I think we can get there if we want to.

The other thing I should say, and something which is often neglected in this, is that we know that for everybody who is as you call them a 'problem gambler', I'd prefer to call them people experiencing high rates of gambling harm. Each one of them affects six other people. If you add that up for the whole of Australia you end up with something two and a half million people being adversely affected. This is adversely affected by gambling in what we call the moderate to high risk harm categories at any one time.

Now this is not an insignificant number of people and the cost of that according to a study recently undertaken by the Victorian Government, the national cost of that is in the range of $24 billion a year. So what we're talking about is the state government is getting $5.8 billion a year so four times that is going out into the community in terms of harm costs. That's the economic cost. So it's not a very good deal.

In Victoria, the cost of gambling is about $6.7 billion a year and the state government gets about $2 billion a year from gambling taxes. So for every dollar that they get in tax somebody is forking out $3 in terms of harm, and the state government is picking up a lot of that. So we need to start seeing this in terms of its real cost benefit ratios, not in terms of how much taxes the states can grab from it. I mean they have huge outgoings as a consequence of this in a range of areas.

Glyn Davis
So I'm going to stay with the politics for a minute and turn to you Stephen, the Tasmanian campaign must have been a bit eerily familiar, in 2011 and 2012 Australia saw a significant attempt at gambling reform decisively defeated by a highly effective lobbying campaign led by Clubs Australia. Let's listen to the head of Clubs Australia, Anthony Ball speaking on Sky News in 2012 about their campaign to stop gambling reform.

Newsreader
How much is being spent on the campaign to date and what have you got left in the kitty?

Anthony Ball
We've been at this now for 18 months. We've spent probably $3 million, lots of posters and coasters and banners and we've always said we will spend what we have to and we will go for as long as we need to to get common sense. Now our position hasn't changed and really the events of the last couple of days hasn't changed that either. We will continue to go until common sense prevails.

Glyn Davis
Stephen, you were a federal minister in 2011, 2012, when these reforms that were advocated by independent MP Andrew Wilkie were defeated. Why was the government unable to secure a reform then?

Stephen Conroy
Look, as you said, I think I was either the leader or the deputy leader in the Senate, Cabinet Minister so I'm very familiar with this debate and the strength of the sector to try and combat you. In terms of where the Gillard Government struggled on this issue was as much to do with being a minority government, as well as the mining tax debate at the same time. So it came at an incredibly difficult time where the government was advancing reforms on a whole range of fronts and was under siege from the conservative forces across the country, whether it be the Business Council of Australia, the Minerals Council, clubs and pubs, hotels.

So the Gillard Government was engaged in a whole range of reforms from a minority government position. Ultimately, we were overwhelmed by all of those forces and I think some of the points that Charles made about the Tasmanian election just recently was that there should be donation reform. I'm speaking privately, not on behalf of RWA here, but I would absolutely support and advocated in my last few months when I had responsibility before I retired from Parliament, that there should be public funding for elections.

I think that is an important thing. I think if people want to restore the ordinary Australian's trust in the electoral process I think we need to introduce that. That's a big call, there's a lot of people opposed to that and more public money is being spent on politicians and politicking, it's a hard argument. But if people want an electoral process that can't be so heavily influenced by the mining industry or the gaming industry or any of the other powerful sectors of the economy, I think you need to move down that path.

I strongly believe that. As I said, that's not an RWA position, that's just someone who has had the experience of being beaten up on the one hand and putting forward a policy to say, well let's try and change the system because I don't the system the way it's working is delivering the outcomes that is seeing ordinary Australians have confidence that the political system is about supporting them and not about supporting any of the vested interests.

Charles Livingstone
Events after 2010 and the campaign spearheaded by Clubs Australia, which is actually Clubs New South Wales, because that's the powerhouse of this activity in Australia. It was a carefully crafted campaign. I mean the public side of it looked a bit clumsy and silly but behind the scenes they're running a very effective marginal seats campaign. They were targeting those Labor members in seats where they thought they were vulnerable, and there were many of them as I'm sure Stephen will recall.

They were rewarding their friends with regular modest but reasonable donations so that I presume that they had insight into what was going on in the caucus and what the issues were. Now you know we've done research tracking their donations for the last 20 years and of course there was a huge spike then. But what we have seen since that period is a continuing sort of talent spotting by the gambling industry, particularly Clubs New South Wales, but all the gambling operators have pets, if you like, in the federal parliament.

So I agree entirely with the idea of donation reform. It is fundamental to fixing up this particular business. I might remind your listeners too that Anthony Ball and Josh Landers whose offsider went off to the US where they were schooled in these tactics by the National Rifle Association. So these guys play hard ball, they're not mucking around. So donation reform is critical to that but so is exposure of the entire range of corporate political activity.

I mean this is another area where in tobacco and alcohol control understanding how the industry operates is fundamental to defeating it, if you what you want is to reduce the harm associated with the product. So there's a whole host of areas where reform is needed. Donations reform is a great place to start but access to politicians, keeping access open to their diaries so we know who is seeing who, what the relationship between these visits and legislation subsequently can be. I mean that is incredibly important stuff.

It's interesting now that the first major political party in Australia to decide that it would go against gambling interests was the ALP in Tasmania and I hope that signals a new view from the ALP about its relationship with gambling. Because federally the ALP relies heavily on gambling donations, particularly from the Canberra Labor clubs which I think operate well in excess of 400 machines and making about $20 million a year out of them.

So there's an enormous amount of capacity for political reform and the reform of political institutions to ensure that these types of influences are watered down and don't become the preeminent case that they are at the moment.

Glyn Davis
I'd like to ask each of you a closing view. Stephen, Responsible Wagering Australia has put out a vision of what it thinks an industry should look like and how it should be regulated. What in a sense is the endpoint view, what does a Responsible Wagering Australia look like?

Then Charles, I'd be interested to hear your view on where should we end in this, what is the policy objective here? Stephen…

Stephen Conroy
We want a sustainable gambling sector. We don't believe that - and there are plenty of people who passionately believe that there should be no gambling, they're opposed to gambling. But unfortunately, I mean probably the second longest serving industry in history, you can guess what the first is, so no one has been really successful. I vaguely remember someone stormed into a temple and threw the moneylenders and the gamblers out once a long time ago.

So we've got to have a properly regulated sector. The other thing, particularly in the digitised world it isn't possible to say, right we can just ban it here in Australia and that's the end of the problem. In a digitised world with the internet I think Sally Gainsbury on behalf of one of the government regulators has just produced a report and she's from the University of New South Wales, for a government agency called ACMA that 25 per cent of Australians already gamble offshore on illegal sites.

So it's a bit like saying, hey, Netflix is banned in Australia but 200,000 Australians actually had an account with Netflix before it formally launched in Australia. So you can con yourself that just a ban is the only solution. It just isn't a solution. So if you start from the position of wanting it banned then you don't actually achieve what you set out to achieve.

So we want a properly regulated sector that has socially responsible behaviour by the companies, and that they are working to develop all of the sort of tools we talked about earlier. Accepting the points that Charles made about some international experience and the trials, we want to see a situation where there is a comfortable balance and safety for people gambling.

The number of Australians that are in the online sector is increasing and so our sector wants to avoid the issues that perhaps the poker machines, the casinos, even some of the lotteries, so lotteries are considered to be the least harm I think Charles in terms of the spectrum of that argument.

We want to ensure that the online sector is managed by the companies in a way that is sustainable. Because if it had kept going down the path it was previously it would have quickly been viewed as outside of its social licence and it would have been put very quickly under some very harsh regulatory framework. So I think the dialogue that we've established in the last 15 months with the gambling sector has been very healthy and welcome. There was a lot of cynicism and suspicion at the beginning but we've opened a dialogue. We work with them on some of the significant issues that we talk about.

So we want to see a sustainable sector. One that doesn't say, alright, let's take every single dollar that that person has the capacity to spend and in the worst cases people haven't had the capacity and companies have taken more than that in the past. My members don't want problem gamblers on their books.

Glyn Davis
Charles, as a public health specialist, as a former member of the ministerial expert advisory group, what to you is the optimal policy settings here?

Charles Livingstone
Well, I don't believe in banning gambling. I do believe in providing gambling services that are as harm free as they possibly can. The model for me would be something like tobacco control or perhaps more accurately the motor vehicle injury reduction. So this is not something that ever stops, it is something where we keep understanding what's causing the problems and iteratively revisiting it, and understanding all of the institutions that have to be involved in order to make sure that people are not harmed.

Ideally, I'd like to see a gambling industry which can operate in Australia and which provides people with enjoyment but which doesn't do so at the cost of significant harm. Now the number one target for that undoubtedly is the poker machine business, that is undoubtedly the locus of harm in Australia for gambling by a fair margin. But many of the things that I would like to see introduced in the poker machine businesses can also be introduced, and probably more easily, into the online sector.

I'm encouraged to see the federal government taking an interest, even a Liberal Government, taking an interest in the online gambling sector and proposing some, what I think are reasonable first steps in a regulatory process. But this shouldn't be anywhere near the end of it. It needs to be just the beginning of a long process to make sure that harm is reduced to the greatest possible extent with the goal being as it is with motor vehicle injury to have no fatalities a year. I think the goal needs to be no harm.

Now that may mean some gambling products do have to be banned. That doesn't mean we ban gambling overall but it means we restrict access to some gambling products because they are very, very harmful. Perhaps poker machines are in that category, perhaps we can't make a quote unquote safe poker machine. I think the ALP in Tasmania was arguing for what I think would be a reasonable policy which is to get them out of pubs and clubs where they're so ubiquitous and so easy for people to access that they end up in diabolical trouble every night on their way home, and removing them to a casino where at least you have to make a qualitative choice to go and see them.

But there are lots of things we can do with poker machines to reduce their reinforcement reign to make them much less harmful. Similarly, a uniform pre-commitment system, that is one where people have to decide in advance, they have to, it's not an option, they have to decide in advance how much they want to gamble, is an inevitable step if we want to reduce harm. It's been introduced in various jurisdictions with great success.

So there is a huge amount we can do. The steps that the federal government are taking at the moment are a good first set of steps but we have to keep doing it iteratively and adopt an understanding based on systems which interact to create the problem.

Glyn Davis
Thank you. It's been an engaging discussion. So my thanks to our guests, Stephen Conroy, the Executive Director of Responsible Wagering Australia, thank you Stephen for joining us.

Stephen Conroy
Thanks very much.

Charles Livingstone
Dr Charles Livingstone, Senior Lecturer in the School of Public Health and Preventative Medicine at Monash University, Charles, thank you for joining us on the Policy Shop.

Charles Livingstone
You're very welcome.

Voiceover
Policy Shop is produced by Eoin Hahessy with audio engineering by Gavin Nebauer and is recorded at the Horwood Studio at the University of Melbourne, with thanks to Badbits Australia for the use of the clip at the start of the episode. The Policy Shop is produced under Creative Commons copyright at the University of Melbourne 2018.