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Select Committee on Information Technologies
Online gambling in Australia
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Select Committee on Information Technologies
Online gambling in Australia
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Select Committee on Information Technologies
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Content WindowSelect Committee on Information Technologies - 11/11/99 - Online gambling in Australia
CHAIR —Welcome. The committee prefers that all evidence be given in public. However, if at any time there is a question asked, the answer for which you may like to give in private, please ask us and we will consider that. However, it could subsequently be that that evidence could be made public by order of the Senate. I would also like to remind witnesses that the giving of false or misleading evidence may constitute a contempt of the parliament. The committee has before it submissions Nos 59, 50 and 11, which have already been published. Are there any changes that you would like to make at this stage to any of those submissions?
Ms Webster —There is no change to our submission, although we do have some additional material that we would like to introduce by way of discussion.
CHAIR —Thank you. We will get to that in just a moment. I would now like to invite each of you to make an opening statement. When that is completed, we will ask each of you questions. I am conscious that there are five witnesses at the table so I would ask you to make your introductory remarks as brief as possible to allow more time for my colleagues to ask questions.
Ms Webster —The InterChurch Gambling Taskforce is very grateful for this opportunity to appear before the committee today. We believe that the issue of online gambling and interactive gambling is an extremely important issue. Despite the fact that the recent Productivity Commission report identified that only 86,000 people had actually participated in online gambling to this point in time, we believe that it is an issue of immense proportions that is likely to have profound social effects. This was confirmed for me personally yesterday by speaking to some of the financial counsellors at Good Shepherd Youth and Family Services, who are already seeing the impacts of this technology on low income families in a situation with relatively little protection.
We believe that, while our initial report to you indicated that there were very severe problems with the issue of adequately regulating online gambling, there is a strong case to be made for following the US lead of the Kyl bill and that there should be close examination of the issue of total prohibition. We believe that there are severe problems with the regulatory approach undertaken so far in Australia. The features of that regulation have basically been protection of government revenue, protection of the industry, and protection of the consumer only where underlying that were the purposes of the integrity of the industry. We believe that the fourth purpose of regulation, which we believe should underpin any
regulation—that is, safeguarding the community—has actually had fairly minor attention paid to it in the process of regulation.
We believe that in other forms of gambling, particularly in Victoria, voluntary codes of practice have completely failed; and obviously we take the industry on in that respect. Finally, we believe that, failing the issue of prohibition, there are some things which can be undertaken to strengthen a regulatory approach but we believe that this is very much a secondary approach. Edward Chapman will now introduce our submission and talk in more detail about some of the measures that we are proposing.
Mr Chapman —I will not bore you with the details of the report, as I am sure you have all got it in front of you. I have a few main points that I would like to draw together from the work that we have done. It appears that most of the debate around Internet gambling, due to the input of the industry and other bodies, has been mainly around the regulatory framework. We want to pull this back a bit to analyse again the case for the ban on Internet gambling, which is often pooh-poohed by much of the industry and other bodies.
We believe that this has to the examined again more fully, especially in light of the United States Kyl bill and the prohibition on Internet gambling that is going through there. We are aware of the extreme political and economic pressure that almost demands that Internet gambling be regulated. The amount of money that could be potentially won, as well as the amount of money that could be potentially lost to overseas sites, puts a great deal of pressure on the need to regulate this industry.
However, in analysing the social costs and economic costs, when it is looked at more carefully, we believe there is a strong case for a ban on Internet gambling and we believe that, if it cannot be 100 per cent achieved, it is still worth pursuing and worth examining further for its potential. Failing that ban happening, we have also examined more closely the regulatory framework. We have looked in more detail at the weak points of the legislation. We have examined the Victorian legislation in particular and the weak spots there. Primarily, in Victoria there is the inability of a third party to place a restriction on an individual's betting—which was an ability in the Queensland legislation that we fully supported and would like to see implemented in all states.
As I said, all of the information and regulations have been laid out there. We have put particular emphasis on access to minors—which we believe has been underestimated by the industry and is much harder to control—as well as on the ability for children to bet, as was discussed previously, by points and not financially—which we believe also has complications. The fact that an individual cannot receive moneys does not mean that a social problem is not being caused. That is probably a quick run-through of the information.
Rev. Costello —You will know from our report that it is a plea to consider a ban but, if that is rejected, I guess there is as a fall-back to consider much stricter legislation. I would not want the committee to believe that somehow we are a little half-hearted about a ban. We actually believe that a national framework—not a state framework—that has drawn up national guidelines is absolutely essential: a national framework that holds in solidarity with the US, which is moving—and we should all acknowledge this—to look at international conventions and maybe even a treaty in terms of how this is regulated. To break ranks with
the US and to boast, as some of our states are doing, that we are the world leaders and that we are out there is corrosive of the US lead, is foolish, and ultimately will be defeating of proper international discussion and conventions which will ultimately be the only protection for all of us.
As for a competitive framework, at the moment at state levels, I must confess some cynicism about this: when the states drew up their code and framework, I—as a person who follows gambling fairly closely—did not even notice it. The states do not agree on a lot of things, as we know, but they seemed to slip off and all come back with this you-beaut agreement—which, I must say, only intensified my cynicism that this was driven by state revenues, which we know from the Productivity Commission has been one of the major reasons for the explosion of gambling in Australia and why we are so far ahead of everyone else. State revenues have actually fuelled the demand.
That is why I profoundly distrust a state framework where a Crown and a Tattersalls can come along and say, `You can trust us; we are responsible players.' Sadly, we know, thanks to the Productivity Commission's work, that 35 per cent of Crown and Tattersall's revenue—and, by extension, 35 per cent of state government revenue—comes from gambling addicts, from 2.3 per cent of the population who have no free choice at all. So to actually say, `We will be self-regulating; do not place any regulations on us, because we are responsible players,' is laughable. There is so much money at stake here, in terms of advancing and creating a much more ravenous technological appetite for Internet gambling, that it needs to be a national and international framework that regulates this.
We also said in this report—and I will just underscore it—that the Productivity Commission has found that problem gamblers are mainly created through accessibility. Unlike a drinker who might drive all over the city to find a hotel, it is the accessibility, visibility and proximity that creates problem gamblers. It gets no more accessible than Internet gambling. It is there in your home. You might be drinking; you might be depressed. It is the only form of gambling that is credit based. No other form is. It is the most seductive and dangerous, and every new technological advance creates a new category of problem gamblers.
In this state, pokies—which we thought would be fine because New South Wales had had them for 30 or 40 years—once introduced, saw women, who had been about two per cent of problem gamblers, jump to being over 50 per cent when pokies went through clubs, pubs, and literally everywhere. We think there will be a similar, parallel creation of new problem gamblers who do not go to casinos and clubs but who, with online gambling, with the illusory promise that it is all regulated and safe and that they do not risk losing their money in the Cook Islands or the rogue offshore states, will actually be a new category of problem gamblers.
Very briefly, you have before you some stuff I have pulled down off the Internet, which talks about Visa being responsible for a woman's $70,000 Net gambling in the US, and Visa now recognising that it must move to ban that. If you go to page 3—and I will not read this for you; you can read it at your leisure—a Visa subsidiary, a major company called Providian, which has 11 million customers, is taking steps to make debts illegal on the Net. It sets out there why it believes those powers are both enforceable and why we would
believe, under the banking provisions of our Constitution—or, for that matter, the telecommunications provisions—similar federal intervention is both achievable and sensible. Yes, people might still go offshore to gamble, but the risks for them are then known. Once you say yes and the industry is saying, `It has all now been made watertight; the regulations are in place and you have nothing to fear,' that actually intensifies use far more quickly than do the prospects of the offshore, fly-by-night, overnight sorts of companies that exist at the moment.
So we would say it is foolish for us, as the greatest gambling nation in the world—with now, demonstrably, the greatest number of pro rata gambling problems—to boast about leading the world, when that is actually breaking ranks with the responsible leadership that the US and other countries are giving to head toward both protection of their own and protection through international convention. So we would urgently submit that the federal government consider its powers in this matter—if only, I might say, because the Productivity Commission has shown that the states, in their fiscal crises, have continued to fail to resist this painless, windfall tax which is just so easy to collect because it costs nothing electorally.
Mr Ruzzier —Thanks for the opportunity to appear before this committee. At the outset, I need to say that I represent BreakEven Eastern and Eastern only. The BreakEven network is a state-wide network. However, the comments that you will hear today come from the eastern region and the eastern region only. We employ 12 people in our service—eight counsellors, three financial counsellors and a community educator—and we cover the eastern metropolitan region of Melbourne, which covers about a million people. The previous witness, Mr Rae, said something in the nature of—
CHAIR —Could I just ask you to explain what BreakEven does?
Mr Ruzzier —BreakEven is a service that is funded by the Victorian Department of Human Services. The money that the department gives us comes directly from the Community Support Fund. That fund, in turn, is derived from gaming machines in hotels in Victoria and hotels only. Clubs do not contribute to that fund.
CHAIR —And you provide support for gambling addicts?
Mr Ruzzier —We provide assistance, support and counselling for any person adversely affected by gambling. That is the person gambling, or their partner. We also provide a range of other activities that include community education and liaison with gaming venues. Of course, we have strong links with G-line, which is the 24-hour provider in the state. Unlike, I suppose, the InterChurch Gambling TaskForce, we cannot argue for prohibition, because part of our brief from the department is to promote a responsible gambling culture in Victoria.
The previous witness, Mr Rae, said something to the effect that nobody knows what the nature, causes and consequences of problem gambling are. We as an agency would take issue with that. We would certainly believe that, after five years of providing a service to about 3[half ] thousand people, we have some understanding of the nature of problem gamblers, the causes of them becoming problem gamblers, and certainly the consequences on families, individuals, employers and the community as a whole.
One of the things that you will note in our submission is that certainly part of the nature of problem gamblers is that their behaviour is often secretive, clandestine. That is often because they feel ashamed, embarrassed and terribly guilty about their actions. Whilst the previous speaker again said that if online gambling is in the home it is going to be spotted and everything will be hunky-dory, we take issue with that. Our main concern with Internet gambling is that we see that online gambling in the home or at work really facilitates the clandestine nature of problem gambling: it is even more secretive, because people will gambling online at home when their wife or husband has gone to bed. They will gamble at work on their computer. You could be gambling on the 20th floor up the road here, and your boss might not know.
That is really the major thrust of our concern. As well, we think that we have had only one person at the moment presenting with an online gambling problem. We have a double whammy, because he is a person from a non-Australian background and he is also on a disability pension. The issues for him are that he thinks it is safe, that it is convenient, that he does not have to move physically, and that it is a very easy and convenient way for him to gamble. I take up what Reverend Tim Costello said: there is no doubt that accessibility to gambling certainly is a big issue. Eight out of 10 of the clients we see are experiencing problems with electronic gaming machines. If we had had a service prior to 1992 when the machines were introduced, all our gamblers would have been horse punters or gambling on illegal casinos. Now, as the Reverend said, half of our clients are women and those women, by and large, are gambling on electronic gaming machines.
Whilst our brief is to promote responsible gambling, we are concerned about the impact of gambling in the home. The previous speaker made some comment to the effect that if the gambling is brought into the home it will be much more visible and therefore the problem gambler will not commit the act. I do not want to draw a long bow here, but as a parole officer who dealt with sex offenders, I can tell you that sex offenders found ways to commit crimes in the home. I have no doubt that, if they can do that, problem gamblers will be able to access online gambling either in the home or at work without much problem.
Mr Xenophon —Thank you for this opportunity to give evidence. By way of background, I am an independent member of the Legislative Council for the South Australian parliament. There was a discussion with your previous witnesses about what `independent' means. I suppose I manage to upset both the Premier and opposition leader occasionally, sometimes both on the same day, so I guess I am independent in that regard. I was elected on a single issue, the `no pokies' campaign two years ago. Poker machines were very much the manifestation of the gambling exposure in South Australia and the rapid increase in the number of people seeking help from welfare agencies, and the easy access to them in hotels and clubs has largely been the driver of gambling losses. Gambling losses in my state have doubled in the last five years.
I do not see the issue of online gambling as one of wowserism; I see it primarily as an issue of social justice and consumer protection. The select committee of the Legislative Council of the South Australian parliament is currently undertaking a similar inquiry into the risks, benefits and feasibilities of online gambling and into the difficulties and challenges faced in prohibiting or regulating that industry. There are a number of conundrums in dealing with this industry. The industry approach appears to be that you can regulate this
industry. The corollary to that, I would think, is that if you can effectively regulate it then you ought to be able to effectively prohibit it. I would think that, from a legislative point of view, there ought to be a choice so that a decision can be made based on the technical feasibility of dealing with this industry.
I would like to take up the issue of the prohibition approach. That is something that the industry talks about, and they allude to prohibition in the 1930s in the United States. I think the issue with gambling is very different. We do not see a popular movement as there was in the US to end prohibition. We do not see a situation here where people are marching the streets for the right to gamble online 24 hours a day, seven days a week. Given the Productivity Commission's survey results—that some 75 per cent of Australians believe that gambling does more harm than good and that 92 per cent believe that there should be no more poker machines in the community—I find the Productivity Commission's view, that you can deal with interactive gambling by way of a regime of managed liberalisation, to be, at the least, curious.
My appeal to the committee would be to look at this as a consumer protection issue and to look at effective ways of dealing with the very difficult technical issue of regulating or prohibiting this industry, and perhaps to take the approach that has been suggested in the US of using the banking powers to outlaw credit card transactions—which will clearly be a significant driver in the growth of this industry—in online gambling. For example, if a punter loses money on an Internet gambling site, wherever that is, they ought to be able to void that transaction. Most transactions—or the industry itself—could effectively be nipped in the bud if that legislative approach was taken. I am more than happy to deal with that during questions.
I also see that there is an inherent tension in the approach of the industry that says that you can simply regulate this industry and regulate it effectively. The approach of previous witnesses that you can simply have a self-regulatory approach is something that does not make sense, particularly given the comments made by the Productivity Commission that a self-regulatory approach does not really deliver a good policy outcome in terms of reducing levels of problem gambling.
CHAIR —Thank you very much. Perhaps I can open by asking a question directed to Reverend Costello, and somebody else might like to come in. Your submissions and your statements this morning have painted a very bleak picture of Internet gambling and of a very worrying likely influence on families. But, to my way of thinking, there is currently nothing more damaging to me, as a member of a family, than to see young children parked outside TABs in baby strollers while their parents are inside laying bets. Even worse, in my opinion, is to see them kept outside a barrier in a hotel while their parents are on the other side of the barrier gambling on poker machines. As Mr Xenophon's study of poker machines and losses by postcode has shown that these are invariably people on low incomes, how are such people with no access to computers and very limited access to the Internet generally going to be worse off than they are now, with such ready access to other forms of gambling?
Rev. Costello —I think your argument has answered itself. People are being promised such illusory things as that they can be a winner, and they are flooding TABs and poker machines. Once access to computers does become universal—and it will eventually become
universal even for the poor; prices are coming down—that accessibility only intensifies the very things that you are talking about.
When you say `families' I think you are spot on. At the Productivity Commission's hearings in Brisbane that I sat through, the previous witness, Jeffrey Rae from ACIL, argued that gambling is a rational activity, that people who are problem gamblers have rationally chosen how much distress and suffering they want to endure for their gambling. He added that family members are free moral agents—because this is their whole rational moral agency theory—to contract out of a problem gambler's life and pain at any time they choose.
This is where this notion of theoretical choice becomes absolutely ridiculous. I saw a woman three weeks ago whose husband suicided after she found he had lost $160,000. He put his Qantas suit on and gassed himself in his car in the Qantas car park. His wife had no idea until she found out how much he had lost, and a day later he suicided. She had no opportunity to rationally withdraw from this awful addiction once he was found out with the shame. Families do not have that opportunity and, once computers are in homes and accessible right across the board—as they eventually will be—that will only intensify the pain for families.
CHAIR —One of the critical questions is this one of access, and you have answered some of the question in the points you have just made. But isn't it also the case that Internet gambling involves people—certainly in Alice Springs, where we heard evidence yesterday—making some choices before they start gambling so that they determine the maximum amount of money they want to lose in a month, they determine their maximum bet and they make certain other choices as well?
Those are not choices that are imposed on people who gamble in any other form of gambling, as far as I am aware. It is in fact worse still: it is not unusual to see, very close to casinos, pawn shops operating very profitably and EFTPOS machines—whole walls of them. Surely Internet gambling, online gambling, offers the opportunity to more effectively regulate access to gambling than the myriad other forms of gambling that we now have, which are causing the problems that all of you have outlined this morning.
Rev. Costello —Before Ron replies, I will say that Lasseters is by far the best. I visited Lasseters, too. I was personally quite impressed with the attempts they had made there, and their limits—you can only gamble within the state. They had a much more responsible attitude. But Lasseters is not typical of this industry. Crown is nothing like Lasseters, and its approach, which we have seen in this state, will not be like that of Lasseters. What will happen, unfortunately, to Lasseters—with their limit of, I think, $500 a month—is that, with the competition from Crown and other places and offshore sites, those standards will go. This is what competition does; it is the downward pull.
Those self- exclusions that are quite impressive there at the moment unfortunately still do not give rights to third parties who may have had no say in that self-exclusion: for example, a wife or a spouse finds that the $500 that was the rent money for that month is gone. So we are still maintaining our argument, notwithstanding that there is some good practice in limited places.
Ms Webster —I would like to make a point about the introduction of the technology and low income families. Much is made of the complexity and sophistication of the technology acting as a barrier for low income families. But with the introduction of new televisions, interactive televisions, and the simplifying of that access, the total access to the technology will become available to low income families, and the take-up rate will explode, just as it did with video technology; in fact, it was that portion of the population that drove the take-up of video technology. This was the area that the financial counsellors of Good Shepherd were particularly concerned about. It will be the debt incurred, not only with the actual play but in acquiring the technology, that will be affecting those families.
Senator TIERNEY —Telstra have a plan to do that next year.
CHAIR —I have one further question on the point you make about Lasseters. Surely, if we were looking to regulate in an area of consumer protection, Lasseters is quite valuable in that area. One of the things that concerned me this morning—I do not believe we were able to clarify it to my satisfaction—related to this log-in set of slides. Nowhere does it pick up the point that somebody might be a problem gambler already from poker machines or some other form of gambling. It seems to me that it is fundamental to offer some counselling at the point at which somebody is going to set up a new form of gambling on their home computer, in addition to all other forms of gambling that they may already be looking at. I wonder whether you have got any comment to make on that. I did not feel I was able to clarify that, to the extent that it was going to be put on to the set of access procedures.
Rev. Costello —I believe—and others might have a view on this—that it is virtually impossible to identify problem gamblers on the Internet. We know this from pornography sites, which spring up all over the place. It is the fastest growing access. In fact this will happen with online gambling too, it seems to me, unless there are banking situations, like the Providian one referred to in this document, where they are barring the use of credit cards: you have got to go overseas and set up an account.
At least with the pokies and casinos, in the trajectory of this industry we are about 20 years away from where the tobacco industry was at the end of the 1970's perhaps, when tobacco research still funded most of the research going on into cancer. It was unthinkable that you might ban, on planes or restaurants or workplaces, people smoking. People would have laughed in your face 20 years ago and said, `You can't do that.' And we have done it; there has been a cultural change.
I believe that, over the next 20 years, we will have a cultural change because we actually are winning this debate with the hearts and minds of Australians who are saying, `Gambling should be there; no-one is limiting anyone's options to gamble. However, we do need to responsibly identify problem gamblers.' If they have to go into a pub or a club or a casino, we can start to make it normal to identify, to pro-actively intervene—like a licensee should do with a person who is drunk. We will even be able—perhaps in 20 years time—to insist that they get counselling, because we can identify them. What worries me so much about this is that there is no way of identifying them. That is why I am very, very worried about this form of gambling.
CHAIR —Other than by the company that is providing the service identifying them.
Rev. Costello —Yes.
Senator LUNDY —Just going back a little bit, I think it was you, Reverend Costello, who made mention of how you actually go about restricting content and made reference to the CDA and what was happening in the US. To what degree do you think that the potential of the same fate of CDA1, if you like, is going to occur with the current legislation being considered, given that even the commentary that you provided talks about the pending challenge and the fact that, because it is clearly a restriction on content, it could very well be subject to a First Amendment problem, as was the CDA?
Rev. Costello —I cannot actually answer that, except to say that the amount of gambling per head and problem gambling in America is far, far less than ours. But the resolve in America at the moment is far, far greater, curiously, than is ours, to try to address these problems. From my context there, whatever the legal fate on that, this issue is now so clearly taking root in the American public's mind that even court cases interpreting First Amendments are shaped by cultural attitudes. The judiciary, contrary to what they might tell us, are responding to what they see as dominant.
The states are now seeing—Nick Xenophon has just been there—numbers of states outlaw pokies called slot machines, for example. There is a mood there to say that people should have the opportunity to gamble—nobody is suggesting they should not—but the need for greater and more gambling is not being driven by community demand; it is being driven by the industry. Although there are decriminalising groups for marijuana and all sorts of things, with people out there actively lobbying, that is not happening with gambling. The pressure is coming from the industry and state governments, and in America they have recognised that and are rolling it back. I think, legally, they will continue to press this, whatever the fate of that case.
Senator LUNDY —Further to that, the whole state-federal relationship in the US is intrinsically part of their considerations, as you imply is the fact here. To what degree do you think the issue is being motivated by the state governments in the US to look to Congress to actually legislate, given that so many of the states choose different paths and have far more flexibility in their own state based revenue models to draw revenue from other sources? For example, consumption taxes are state based in the US and they have a degree of flexibility that is not available here. How much of their whole scenario can be likened to what is going on in Australia, because of the differences in the way that the states can actually attract revenue? Some states in the US have made gambling illegal; you cannot gamble in some states over there. And people make a social choice about where they live, perhaps, as a result of that—maybe not.
Rev. Costello —Others might want to speak on this. I would just say that our federal system clearly is different from theirs, and there is no doubt that the vertical fiscal imbalance between state and federal has fuelled state reliance on gambling and the massive expansion of gambling. I think that is indisputable. The GST here will top up state revenues a little bit. It remains a real challenge to know how to address state revenues so that they do not remain dependent on gambling. But if Victorians, for example, knew that the state government or an industry were getting 35 per cent of its revenue from heroin addicts living off the back of them, there would be outrage—moral outrage. They would say, `Whatever the cost, this is
morally wrong.' That is what is actually happening with gamblers, with people who are addicts. The state of Victoria is now getting 16 per cent of its total revenue from gambling, and that figure is growing. Thirty-five per cent of that comes from addicts. It is morally and socially wrong. And whatever the legal federal-state jurisdictional difficulties, whatever the economic revenue cashflow problems, we actually need to set the moral values clearly, because any state or federal budget is ultimately a statement of values and priorities—that is what it is—then we work it out.
Senator LUNDY —To follow on from that, I asked the previous witness a question about revenue models and revenue drivers behind industry initiatives, behind markets and consumer products that are offered. It seems that, from what you have just said, the responsibility for identifying what those revenue drivers are goes back to who has control of those revenue models. The motivating factors that are making gambling such a prevalent and accessible thing, particularly in this state, relate to those revenue models and how the different stakeholders, if you like—the government and the casino operator—actually position themselves.
You have to deal with those revenue models if you want to address the social problems that are derived from them in the first instance. How is your position on banning going to actually resolve this problem—those underlying motivational factors—at its cause? While ever you leave those revenue drivers that promote the market in place, you are really just putting a bandaid over the sore bits.
Rev. Costello —Yes. I will not take time here to give my views on what should happen to fiscal state vertical imbalance.
Senator LUNDY —But my point is that it is a motivator.
Rev. Costello —I understand that, but I think there are answers to that. That would be a long discussion for us. I do want to say, however, that this is ultimately a matter of political leadership. In this state now we hope to be seeing political leadership that says it is no longer sufficient for us simply to say that, because we are stuck a little bit with not getting enough out of the feds, we are going to throw more pokies in the poorest areas. The present government has promised regional caps on pokies, to say that no longer will the poor subsidise the captains of the gaming industry and the big social Agenda 21 projects—aquatic centres, state museums and Australian tennis opens.
It will require political leadership to explain why state taxes in other areas might have to go up, and that will be a very courageous political leadership; but, if you have laid out the grounds sufficiently to say it is no longer right to create dependency here, then that is your next task. We say that, unfortunately, we have perhaps had governments that have failed clearly to do that, and I do not just say that of the Victorian government. It has been true of all state governments except the West Australian.
Senator LUNDY —My next question is on the relativities that exist between what is proposed here and the online services bill that has been passed by the federal government. There has been a fairly consistent amount of evidence that that piece of legislation will not achieve what the government has promised it will achieve—that is, protect people from the
type of material that it seeks to make illegal—by virtue of issues that you have acknowledged, in that there are international sites and material hosted on servers elsewhere that cannot be blocked. To what degree is that evidence relevant to the prospect that you are advocating—that is, that Internet gambling be banned? Are you proposing a framework for its banning which is similar to the online services act: that is, takedown notices, and so forth?
Rev. Costello —I am sorry I am doing all the talking here, but I would say that we acknowledge at best that it will filter and restrain significantly enough to make the legislation worth while. Most of us know the old truism that if the law is not enforceable it has no purpose, but most laws are not 100 per cent enforceable. Most laws continue to have a restraining, educative and limiting value. It will restrain it long enough for us to do the necessary work internationally, on which the US is prepared to give the lead, and on which we should be giving the lead, to find international conventions to bring to heel those rogue sites that are being exploitative. In relation to pornography, and I know there has been a lot of disagreement on that, the disagreement is over whether people really believe visually sexually explicit or violent material has any causal connection in shaping the culture, and all of that.
Senator LUNDY —It is not violent material; it is just sexually explicit material.
Rev. Costello —Sexual, sorry. I understand—
Senator HARRADINE —Just for clarification, it is violent material that is being banned under the online broadcasting legislation. I thought I would clarify that.
Rev. Costello —I know the arguments about the causal connections and all of that, that split people. I am not coming here to wade into those arguments except to say that there is an indisputable causal connection between accessibility, privacy, secrecy and problem gambling. The damage it does is extraordinary. There can be no equivocation about the causal connection here, whatever you might argue on the other matters.
Senator LUNDY —Further on that point, you acknowledge that it will not be 100 per cent successful but you recognise that that restraining factor and the fact that it is illegal will act as a disincentive to the community. Do you think the disincentive that illegality brings will actually target the people you are trying to target, the problem gamblers?
Rev. Costello —Yes, I do. I think it will be a very effective disincentive. I think the possibility that, if you have a win, you are not going to get paid is the most effective disincentive, because that site might disappear overnight or you—as a service provider—might be prosecuted or your credit card provider, if banking powers are used, is not going to validate your winnings or losses. I think it would be very powerful.
Senator LUNDY —Despite the attributes you have described for problem gamblers—being secretive, going exploring for and really finding, I suppose, the gratification they are looking for?
Rev. Costello —There will still be some who get through, but not others. There is any amount of opportunity to actually go and gamble. The interest, I guess, here is for us to say that—rather than it being utterly private and therefore not accessible at all to the counsellors that Ron and others have been talking about—we should make it more likely that people actually go out in public and gamble, where at least some education and intervention proactive elements can actually be located.
Mr Ruzzier —I might just add to that point. One of the processes that we do facilitate is self-exclusion from the casino and gaming venues. When you exclude from the casino, that is actually under Victorian law: if you enter the casino as a prohibited person, you are liable for a fine of 10 penalty units. The gaming machine venues operate under a code of conduct. We have had two cases recently where we had a man of Malaysian descent who was a self-excluded person from the casino. He should not have been in the casino but had spent five days in a row there. His son rang the Crown Casino and said, `My father's in there. Will you get him out? This is what he looks like.' They said they could not find him. That was a man who should not have been there. He was committing a crime by being there but was still there. We have to balance that with other cases.
We had a guy recently on a disability pension. Every Monday the money would hit his account at 1.00 a.m. and every Monday at 1.15 a.m. he would be at a gaming machine venue. We got him banned and he has not gambled for the last three weeks. It is early days yet, but that is the first time in four years he has not gambled. I agree with Tim that there will be people whom it will deter and there will be people whom it will not. At least if there are some prohibitive measures, you will filter out some of them, if not all of them.
Senator LUNDY —A question on electronic commerce: you made the distinction before—and please correct me if I am wrong—that Internet gambling is the only source of gambling you can do that is credit based, as opposed to debit based. Can you clarify that for me, and whether or not other credit based forms of gambling are available to people, apart from the obvious?
Mr Ruzzier —There are others. EFTPOS machines are in probably every gaming venue in Victoria. There are 555. If you put in your EFTPOS card, you either take it from your debit account or from your credit account, so there is that. My understanding is that a gambler we have at the moment has also accessed credit from Crown Casino because they have a credit facility.
Rev. Costello —Strictly speaking, we are using credit in a couple of different senses here. The laws at the moment are that gambling on credit is not on: you actually have to have cash. If you are taking it from your own account and EFTPOS, that is another matter. You cannot go and ask for credit.
Senator LUNDY —So in a gambling venue that is right. But if you have access to your own credit account, through Visa, Mastercard or Bankcard, you can still gamble with credit?
Mr Ruzzier —For sure.
CHAIR —What is the situation with telephone betting accounts for the TAB?
Mr Xenophon —At least in South Australia the TAB now has a fine bet credit card facility so that you do not even have to speak to anyone. In the privacy of your workplace you can punch a few numbers in and transfer money from your credit card into your TAB account.
Senator LUNDY —Can you do that from home as well?
Mr Xenophon —Yes, you can.
CHAIR —So you can do it from anywhere that there is a telephone?
Mr Xenophon —Yes; anywhere there is a push button telephone.
Senator LUNDY —I think someone made the statement before that Internet gambling was the only form of gambling you could do in the home where you could have direct access to your credit account.
Mr Xenophon —That is not the case, but then again it is a question of the TAB product as distinct from the services offered by the providers of online gambling.
CHAIR —I am conscious of the time, Senator Lundy.
Senator LUNDY —Okay. I just have a couple of specific questions about the current laws relating to electronic commerce. It may be credit related, given that most electronic commerce sites are credit card enabled, as opposed to debit account enabled. Are you aware of the current structure behind liabilities for defaulted bills from credit card accounts in that online environment, and of where those liabilities fall under Australian law?
Mr Xenophon —The position at the moment is that if a transaction is illegal you can void that transaction with the credit card provider. If it is an illegal transaction then, in terms of the general principles of contract law, the argument is that you ought to be able to void it. As for the current policy of credit card providers, my understanding is that they will cancel a transaction if it is disputed. There is a clearing house, and you have 30 days to cancel that transaction. If there is legislation in place that says that you cannot use your credit card to gamble and it is so used, then you ought to be able to cancel that transaction with the credit card provider. Obviously, Visa, American Express or whoever will then takes steps to ensure that they do not get stung; they will not pay the online casino. The current position is that, if you bet on an online casino with Antigua, the Bahamas or wherever, that generally is honoured because it is not illegal to gamble on those. So at this stage it is fairly vague as to what the legal position is.
Senator LUNDY —Would you agree with the assertion—and I am referring to the news story that you circulated about Visa affiliates clearing online gambling debt—that the success of any regime to make online gambling illegal will be the direct and implicit involvement of credit card companies in the way that you have just described?
Mr Xenophon —I think that is crucial. If you cannot deal with the credit card providers through legislation, you could well lose the battle. Effectively, the online gambling industry
will be policed in everyone's living-room. You could imagine what online casinos in the Bahamas would say if they knew that an Australian punter who lost could cancel the transaction, but that if they won presumably they would not be dobbing them in to their bank. That is the beauty of that, in the sense that it is an easy—
CHAIR —Or their bank dobbing them in to the police.
Senator LUNDY —Would the credit card companies notify the police if they knew illegal transactions were occurring?
Mr Xenophon —It depends how the legislative regime works. My view is that you ought not make gamblers the criminals. I think that turning the average punter into a criminal under that model is not desirable. The aim is to reduce the level of problem gambling, and the way to do that is to cancel the credit card transaction or to make it voidable. I think there is a clear distinction between the broadcasting online legislation, in that the damage is done effectively with online gambling by virtue of the financial losses. I suppose there is a different argument there.
Senator LUNDY —I am just trying to get a bit of a picture of the model that you are proposing, in terms of what is illegal. Is gambling by the individual illegal, or is hosting a gambling site and encouraging people to gamble what you are proposing to make illegal? If so, what are the penalty regimes applying to either?
CHAIR —How will it be technically feasible?
Senator LUNDY —That comes next.
Rev. Costello —I would differ a little from Nick. I would certainly say it is ideal to have the banks doing what Nick is suggesting. Whether they will do that or not, I do not know. I think there is a lot of work yet to be done on it. I would say that, though it is less than ideal, it is still worth declaring that those providers who provide online gambling within this jurisdiction, at least until we sort out some international conventions, are acting illegally. I would place the liability there.
Senator LUNDY —I have one final question. On those international conventions, we know—and again I use electronic commerce as an example—that in all of those international fora invariably not everyone is a participant. Whether it is the privacy regime sought to be implemented by the EU or the OECD's taxation framework conditions for electronic commerce, invariably not all players are partners to those agreements, treaties or even discussions. In that case, how are you going to be able to use those fora to control something online, given the nature of the Internet?
Rev. Costello —This is a common problem we have in every area of human life, from arms control to drugs to just about anything we want to name. We have Security Council members who do not agree on troops going into Kosovo or East Timor. This is actually part of human reality. But just because we cannot necessarily get unanimity and say therefore we have covered it all, we do not say therefore that we will actually just back off and have a little bit of a regulatory go ourselves here. That would really—and this is our main objection
with this—act as an incentive for further expansion of what we believe will be a privately and socially devastating industry.
Because it is difficult—and we have admitted that we are never going to cut it out 100 per cent—we cannot then allow the states, who have been the direct beneficiaries, to always say, `Yes, of course we're only protecting consumers here.' And we cannot allow the industry, which in this state is both monopolistic and duopolistic—Crown is monopolistic, and Tattersalls, duopolistic—to say, `Of course you can trust us,' and ourselves to actually say, `Oh, that's the best we can do. We'll hand it over to them because we won't ever get a truly universal international coverage.' That would be, in my view, both a pessimistic and a nihilistic approach.
Senator LUNDY —Chair, I have one more question that I think is very important.
CHAIR —We are running very late.
Senator LUNDY —It relates to advertising. I asked a question of the previous witness on what their policy was on advertising on their site, and your comment about smoking made me think of it: there is a shift in community values. With the issue of advertising, it is again a question of what mechanisms were available to solicit that kind of activity. That was an effective way for governments to actually begin regulating that area. Do you—either collectively or individually—have a specific view about restrictions placed on the advertising of online gambling sites, both in the online medium or in the traditional medium, as a way of limiting the pervasiveness of the continuation of online gambling services?
Mr Ruzzier —We have a 17-year-old living with us for a week because his parents are overseas. He wants to access his home email, so he types on my computer `www.altavista.com.au'—a major site accessed by probably tens of thousands of people—and, bang, the first thing that comes up is a link to a gaming site. That worries and concerns me.
Rev. Costello —Jeff Kennett's web site goes straight to the grand prix and then to Lasseters—700,000 hits.
Mr Ruzzier —I would say that, from a harm minimisation approach, which is the one we come from—we do not come from a prohibitive one—that concerns me.
Senator LUNDY —Perhaps I could leave that with you to take on notice. I think it was a regulatory mechanism used to restrict or constrain the appeal of a particular thing that was perceived as being harmful to a community, in the case of smoking, and I would like your views if you have any.
Rev. Costello —All of us here bar Ron are against the advertising at all of pokies and casinos.
Senator LUNDY —Okay, that is `generally' and that would transfer into this.
Rev. Costello —Because that is a public act, that could actually be directed—a bit like smoking, which is mainly a public act which affects others—but with online it is much harder to suggest that regulating advertising would somehow cut it down.
CHAIR —Senator Lundy, no more questions please.
Senator LUNDY —Okay. I have just put one on notice as to whether or not the legislation in the US relates specifically to advertising of gambling in relation to either online or offline gambling sites.
Rev. Costello —I do not know; I am sorry.
Senator LUNDY —Please take it on notice.
Senator TIERNEY —Ms Webster, I would like to ask you a question relating to a point in your submission that online gambling leads to a jump in problem gambling. Could you perhaps describe what has happened in this state—as you have moved to having gaming machines in pubs—and what you feel will happen if it comes into the home? Reverend Costello did touch on this. I just want your view on what you think will happen.
Ms Webster —The statistical information from Victoria's own Victorian Casino and Gaming Authority demonstrates that, with the introduction of each gambling methodology, there is a consequent increase in the number of problem gamblers in the community. That reinforces the connection that Tim was making earlier between the dependence of the industry and government on problem gamblers for revenue and the need to increase those who are actually participating in that form of so-called entertainment.
Senator TIERNEY —Reverend Costello, you mentioned the percentage of people who are problem gamblers in the country and how much that contributes to state revenue. We were talking to Lasseters yesterday; they really had not carried out any survey on who these problem gamblers were and where they were. I assume studies have been done in Victoria. What does that reveal about the socioeconomic demographic of people who are problem gamblers?
Rev. Costello —Ron might want to address this. The reality in Victoria is that the concentration of gambling opportunities and promotion of them naturally is in the poorest areas. There seems to be a direct correspondence with accessibility, visibility, promotion and problem gambling. So the make-up comes from those who are in the poorest socioeconomic areas.
Senator TIERNEY —The counterclaim to that is that, because of the technology, people with better incomes tend to be involved. Poorer groups would perhaps be shielded from that because they would not be able to afford computers. Perhaps you might put on the record what you think is going to happen in the next few years in terms of access and technology for those lower socioeconomic groups.
Rev. Costello —As Marilyn said, the framework here is almost certainly envisaged by some of the states as being the same framework effectively as for digital online gambling.
Once digital TV comes in, it is interactive and you can gamble on whether Shane Warne's next ball is a flipper or an off break. This is linking sport and gambling in the home, and again that is immediately accessible. Even those who are poorest will, interestingly, probably find the money to buy a digital TV. My life and work amongst people in poorer communities says that access to TV, video and, interestingly, even computers comes before a house deposit, overseas travel or education.
Mr Ruzzier —I might add to that by saying that the number of households in Australia connected to the Net as at August last year was about 1[frac14] million, or 18 per cent of all households. And that represented a 28 per cent rise in three months. I was looking through a 10-year-old newspaper the other day and there was a $2,000 mobile phone advertised. They are chucking them out now. I would tend to agree that computer access is going to increase.
Senator TIERNEY —As I hinted at earlier, even before digital TV arrived, Telstra was working with a European company to put the Net onto television, so you will not even have to buy a new set.
Senator LUNDY —The technology is available to do it now, Senator Tierney.
Senator TIERNEY —Yes, Senator Lundy, of course it is, but it is not going to come into Australia next year because the technical arrangements will not be across the country.
Senator LUNDY —No, it is here. You can put the Net on your TV right now in Australia.
Senator TIERNEY —Mr Ruzzier, in terms of what you were saying about people with disabilities, we did receive evidence yesterday that this sort of gambling on the Net would be of benefit to a number of groups, particularly people who have disabilities, because of their lack of ability to get out to clubs. What is your view on the downside of that accessibility, given that it has been put on the record as being a big plus?
Mr Ruzzier —I will be very careful what I say here, bearing in mind that I represent BreakEven. We encourage people who present to us to have a range of entertainment options, gambling being one form of that. The major concern is that it opens up a new market for gamblers and, therefore, a new market of problem gamblers. I do not have any problem with people with a disability accessing the Internet or having fun or having a small account, but our experience has been that some of the causes of problem gambling are isolation, depression, boredom, frustration and lack of human contact, and my feeling is that Internet gambling in the home enhances all of those feelings and therefore makes those communities who are the disabled and the frail aged perhaps more vulnerable.
Senator TIERNEY —Our previous witness was saying that the tab for all of this social cost should be picked up by welfare groups and the taxpayer, because they claim they pay their taxes and they pay gambling taxes, and that is enough. What is your view on what sort of responsibility the people operating online sites should have in terms of paying a special income stream to help resolve those problems? I am not sure what Victoria does with gaming machines. Certainly in New South Wales there is such a stream. A representative of the casinos seemed to argue they should put nothing into that. Could we do it out of the
general budget, or do you think there should be a specially dedicated income stream from online gambling to help ameliorate social problems?
Ms Webster —Certainly in Victoria at the current time we have hypothecated taxation. There is also the Community Support Fund. The legislation that underpins that has, over the last six years, constantly been amended to expand the objectives to which that funding might be put. It has been a fairly salutary lesson for the churches and welfare agencies that originally supported the creation of that fund, in terms of its ultimate destination and use. I do not think that there is an easy answer.
Senator TIERNEY —It is interesting that you say that, because a similar thing happened in New South Wales. Any fund that is created has to be tied down very tightly in terms of the way it is used.
Ms Webster —The advantage that New South Wales has had is that they have had a community representative committee with some oversight. In Victoria it has been the responsibility of the arts minister, who was also the Premier, and some of the direction of that funding really has not been subject to community debate and discussion.
Rev. Costello —Whether it is a hypothecated tax or general revenue, all of us at this table emphatically reject the view that the gaming industry pays its tax and therefore has no other ongoing responsibilities. A view that has been put very bluntly, namely by ACIL, the group you heard from before, is that there are not problem gamblers but only problem people. It is a scapegoating view. It is a view that sits nicely with this whole notion of rational moral agency and free choice which says, `We will just have a free choice around anything that is out there and, if you suffer the consequences, the industry that gave you that free choice is not responsible.' We totally reject that; in fact, most Australians reject that.
Senator TIERNEY —Yes.
Mr Xenophon —There is an assumption with hypothecated taxes—the Productivity Commission has had a fairly broad discussion on this—that they in some way legitimise the industry. The misleading impression is often given to the community that simply by hypothecating a tax for problem gambling everything will be okay. The philosophy I subscribe to, as do Tim and others, is that it is much better to have a fence at the top of the cliff than the best equipped ambulance at the base of it. We can put that in perspective. Even if we accept the gambling industry's view that, say, two per cent of the adult population have a significant gambling problem—according to the commission, it is about eight per cent for poker machines in hotels—it is extraordinary that we take the approach that says, for instance, that if there was a restaurant where two per cent of patrons regularly came down with food poisoning, that was okay. That restaurant would have to clean up its act so that people did not have adverse consequences so regularly. The fact that there are, according to the commission, 330,000 Australians with a significant gambling problem indicates that the current regulatory regimes are not working.
Senator TIERNEY —You might like to also comment on what you said about the possibility of not allowing credit cards for online gambling. Do you have anything written on
this that you would like to submit to the committee? It is something we would like to explore, if you have some more detail on that approach.
Mr Xenophon —I am happy to provide that, but currently our select committee is still waiting to hear the Australian Bankers Association view on this issue. My understanding from the credit card providers is that you can abort a transaction if the legislation allows it. Clearly, it is not an ideal solution, but it would nip a significant degree of problem gambling in the bud. My feeling, that I think is shared by others, is that once you have access to digital TV, the Internet and interactive gambling you will see a new tidal wave of problem gamblers in this country. That is the clear fear, from a product point of view.
Senator TIERNEY —That is an interesting comment in light of the evidence we received from TAB in New South Wales. They claim that there is a consumer entertainment dollar in it and that expansion into online gambling would be at the expense of other things. They gave the example of people going to the movies: instead of people going to the movies they would be doing this. Would anyone like to comment on TAB's view?
Mr Ruzzier —I would love to comment on that. We certainly say to our people that they should gamble for one reason only, and that is for fun or entertainment. If you go to Hoyts down the road, you can take your $20 and you can probably get yourself and your partner in and have a bag of popcorn, and you are there for two or 2[half ] hours. If you are watching Titanic , you are there for 3[half ] hours. The problem is that if you take your $20 into a gaming venue it can literally last you five minutes. People think, `Hang on, it is half past eight on a Saturday night. I will put another $20 in.' Because of the way the system works—the longer you are there the more you lose—people lose $40 and then the nature of the relationship changes from being one of entertainment to one of, `Hang on, I have to try to win this money back.' It becomes a lot more serious.
Whilst the industry does promote it as a great entertainment option, in some senses it is not—because it does not always represent value for money. There are people who gamble at Crown—I am sure you could walk down there now and find them—on 1c and 2c machines. They are pressing one line, one credit at a time, so it is costing them 1c and they are getting 100 spins for their dollar. But there are also people gambling on 5c machines, who are gambling on nine lines and maybe two credits, so each spin is costing them 90c, and $20 goes just like that.
Rev. Costello —This is our whole argument with the online technology. The industry keeps saying to us, `Australians have always been great gamblers—two-up and the Anzac tradition, the great flutter on the race that stops the nation. It is part of our cultural identity and genuine interest in having a flutter.' They have not said that the gaming machines, the pokies that were the old one-arm bandits, where you might lose $60 or $70 an hour at worst, are now up to 16 lines that you can play continuously and you can lose $1,200 an hour. The technological intensification has really been a blind spot, in terms of its social effects and its devastating social impacts.
Mr Xenophon —I have a very cynical view of the gambling industry and I do not think you can take it on face value. In 1992 when poker machine legislation was passed in South Australia, the marketing development manager of Aristocrat gaming machines came to South
Australia and said, `This is entertainment, not gambling. It will take you a month of Sundays to lose $100 on one of these things.' On our calculations you can do your $100 in about 10 minutes if you are playing an Aristocrat machine today. The industry simply saying that it can be contained and that there are bet limits and the like does not allow for the technology, which allows for limitless amounts of money to be lost in very short spaces of time.
Mr Ruzzier —The concern I have as well with online gambling is that when a problem gambler goes to a casino or a gaming machine they usually go to an EFTPOS and pull out cash. There is at least this link, `I am putting this cash into a machine.' With Internet gambling, that direct link with a hard cold $50 note is gone. You are literally typing in a credit card number. So the value of money is diminished even further. That is a concern, because that is something we see with our problem gamblers. They lose a sense of money, particularly when they are gambling.
Senator TIERNEY —Just a final point that comes out of Lasseters' evidence yesterday: they have set it up in the Northern Territory so there is a $500 limit per month on gambling. I know Reverend Costello was saying that pressure will be on for that to collapse over time, but just assume that that did hold and that it was introduced across Australia. What is the effect of a limit like that, that people can only gamble up to $500 on the Internet—let alone anything else, of course?
Mr Ruzzier —I would say it would have no effect. There are 280 other gambling sites they can access. In some ways, it is like banning yourself from one venue or saying, `Please limit me at this TAB to $500,' knowing there is another TAB around the corner.
Mr Chapman —I can add to that. We tend to think of this as an `either/or' but in fact it is an `and' situation. One can lose $500 a month on an Internet gambling site and we might think, `Fine, that is only $500. That is a lot less than they would be losing down at the local pokies,' but for many gamblers there are different markets and there will be a lot of overlap between those two markets. Therefore that $500 will be on top of what has already been lost in another environment.
Another issue related to the idea of gambling as entertainment, as we discussed previously, is that it is not merely a financial issue. As you said, where a family might have gone to the movies and spent the night there, they now spend it at home gambling on the Internet. We have the issue now of exposure to the youth and children of that family. Therefore, instead of entertainment becoming synonymous with going out, having a good time and spending money to retrieve something, entertainment now becomes synonymous with sitting in front of a computer and gambling away $500 a month, at least. It changes the paradigm. It changes the concept of entertainment somewhat. That $500 therefore can do more damage than merely just $500 less in the bank account. It can be establishing habitual patterns within youth and young adults that can be followed in later life.
Senator HARRADINE —Mr Rae in his opening remarks on behalf of Crown and Tattersalls referred to problem gambling, and the term `problem gambling' has been used right throughout this inquiry and various other inquiries. Mr Rae said a problem gambler relies on self-diagnosis. I would like the witnesses to make a comment on that. I notice that you used the words `gambling addicts'. Is there a difference between `problem gamblers' and
`gambling addicts'? First I will ask Ms Webster for her comments and then perhaps Mr Chapman.
Ms Webster —The debate about problem gambling has been fairly hard fought in Victoria. There has been quite a deal of research by the Victorian Casino and Gaming Authority around the diagnosis of problem gambling. They have drawn on the SOGS instrument, which was developed in the United States, in the research that they have undertaken since 1992 to map the change in the percentage of problem gamblers in the Victorian community, which has gone from about 0.6 per cent to 2.5 per cent. The welfare organisations and some of the problem gambling counselling services do have difficulty with the use of that instrument and that definition, primarily because they believe that the actual incidence of gambling which causes problems in the community is much greater than 2.5 per cent of the adult population in Victoria, which incidentally works out to about 64,000 people, so it is not a minor social problem.
The difficulty has been to try to get government to recognise that not only are problem gamblers in difficulty but their family members and associates are also having problems as a result of problem gambling. The desire of those who are supporting families has been to try to expand the definition of problem gambling. Therein lie some of the conceptual difficulties you might have encountered with terminology.
Mr Chapman —I would agree with pretty much everything that Marilyn has just said. There is the difficulty in the definition, from both sides of the argument. The industry will argue that the figure is severely overblown. There is that difficulty due to the use of the SOGS scale. In many ways, problem gambling tends to take on a pathological appearance, and the industry tends to push this because it finds a much smaller number. We have looked into, to a certain extent, the degree of problem gambling versus excessive gambling—people who, in a sense, are not fully addicted, are not problem gamblers with all the pathological traits that a heavy addict, like a heroin addict, might have, but who are gambling more than they would be comfortable to do, and it is having an effect on themselves, on their partner, on their family. This especially relates to the situation where we are seeing gambling replacing entertainment, being seen as a different entertainment form, where we see people using more money, and their entertainment budget being blown out accordingly.
Senator HARRADINE —I hope I am not reading too much into what Mr Rae says, but it came across to me that, okay, problem gamblers will self-diagnose and they have got a button and everything will be all right.
Mr Ruzzier —That is certainly not our experience all of the time, Senator. The rough definition that we work on is that problem gambling is gambling in a manner, form or mode that causes harm to the individual themselves, to significant others or to the community at large. Whether people self-diagnose or not I think is a bit of a moot point. We had a phone call yesterday from a woman who has been married for 36 years to a problem gambler. He does not think he has got a problem. But the family is destroyed; they will lose their home in the next week or two. The marriage has gone down the tube. They have three children and grandchildren, so that effect is multiplied. This man does not consider himself to be a problem gambler—they never do—but he clearly is.
I think Edward is right: the industry does get caught up in terms like `pathological' and `addictive' and talks about people with a genuine illness. We do not use the words `illness' or `addiction' or `pathological'. We tend to encourage people to view it as a behavioural problem, something that they can perhaps get themselves out of, with most people. To some people, we would say, `Look, you have got no option but to cut it out.' But I do not think we need to get caught up in what the definition of a problem gambler is, because it really distracts from the real issue that there is harm out there being caused. Our view is that, if it is hurting you or anybody around you then, yes, you have a problem, and you need to address the issue.
Rev. Costello —The industry always tries to say that there are some pathological people out there who, if it were not gambling, would have a problem with drugs or drinking or sex or whatever it might be; they would be addictive type personalities. That is not our finding, in our experience. Again and again we find people who have never had any other addictions. There has been a huge jump in the number of women who have become problem gamblers; it has gone from a low percentage to a high percentage. With the advent of accessible pokies—you walk from your car, and someone brings you a coffee and cake and remembers it is your birthday—these people develop addictions, because they are just being community people.
What is very difficult about this whole notion of self- diagnosis—and I am extremely sceptical about it—is that, with respect to drug or alcohol addiction, firstly, you can now socially talk about them; secondly, third parties can clearly recognise the physiological symptoms—slurred speech or tiredness, whatever it might be. With problem gambling there are no physiological signs, and you are only ever one win away from not having a problem. You are that close to not being a problem gambler. That means that this notion of self- diagnosis of problem gamblers is really, in my view, quite nonsensical for the great number of problem gamblers.
Mr Xenophon —The Productivity Commission's assessment of problem gambling in Australia really is the most independent and comprehensive survey we have had. They have taken a very cautious approach, I would have thought. They have not used a self-diagnosis approach; in terms of assessing the level of problem gambling, that is simply nonsense. Ultimately, I think the Productivity Commission has set a very responsible benchmark for looking at the level of problem gambling in this country, given the depth of their inquiries and the factors they have taken into account. Then again, there is the broader issue. I think the average problem gambler loses, according to the commission, $12,000 per annum. But if you are a low income earner losing $20 a week, and that makes a difference between how well your children are fed, I think that there is an argument that that is a problem. So it is all relative, but I think the Productivity Commission has given us a very responsible benchmark for levels of problem gambling.
Senator LUNDY —Mr Ruzzier, what makes people gamble, in your experience? I know it is a big question, but I think it is relevant when we are commenting on some of the social pressures that these people find themselves under.
CHAIR —Very briefly, Mr Ruzzier.
Mr Ruzzier —Very briefly: isolation, boredom, depression. We see a lot of shift workers, a lot of care givers. We find that a lot of people are in unhappy relationships and they tend to not want to go home, and so they gamble on the way home. Some people are lured by the concept that they can win. I think those are all the reasons that bring people to the activity in the first place, and then what keeps them hooked in there is chasing the losses. Just to finish with a quote, Mickey Rooney said in 1940, `I lost $2 on a horse and I have spent the last 50 years and $2 million chasing it.' That is inevitably what happens: people chase and chase. As the Reverend said, they are one win away from not being a problem gambler, and the feeling that `I could be lucky' keeps them hooked in.
CHAIR —That is an appropriate point at which to thank you very much for your evidence, which I found very valuable this morning. I could have listened for much longer. Having spent 16 hours, as Mr Xenophon has, in Las Vegas just last week speaking to the problem gambling institute there, there is no doubt that the whole world view has very similar principles. It was a bizarre experience. Thank you very much indeed for coming along and giving evidence to us today.