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Thursday, 21 June 2001
Page: 24842


Senator HARRADINE (11:30 AM) —Australia is facing a crisis of problem gambling. The question is: what are we to do about it? What are our powers to do something about this tragedy that is affecting not only the problem gamblers but also their families, society and indeed the economy? The government in this legislation, the Interactive Gambling Bill 2001, is seeking to prevent the spread of gambling on the Internet. However, this bill does not do that because it does not ban the overseas operators.

This legislation will, in fact, play into the hands of Internet gambling operators operating from overseas. These organisations are poised to take the commercial opportunity that this bill offers to them, because it bans access to Australian sites but it does not ban access to overseas sites. Problem gamblers will have ease of access to those sites—no doubt about that. Anybody with any computer literacy at all, the minimum of computer literacy, can get onto overseas sites.

Furthermore, many of the overseas gambling sites are linked to pornography operators. Even one of the `respectable' organisations, Ladbrokes, one of the largest gambling outfits in the world, has just done a deal, an agreement, with the Playboy empire to link their sites. I believe that these issues raise the question as to whether this legislation is counterproductive or supportable.

We have a very grave problem, a crisis, facing us in Australia. We have the highest number of poker machines per head than anywhere else in the world. In 1997-98, Australians gambled $95 billion and they lost $10.8 billion of that. Around 7,000 businesses provide gambling services, including 2,888 pubs, 2,408 clubs and 13 casinos. There are some 290,000 problem gamblers in Australia and 130,000 of those are severe problem gamblers. That number of 290,000 represents 2.1 per cent of Australian adults. One problem gambler, as Senator Woodley has pointed out, affects on average seven to nine other people. The term `problem gambling' is defined variously. One such definition is the situation where a person's gambling activity gives to rise to harm to the individual player and/or to his or her family and may extend to the community, and another definition is a chronic failure to resist gambling impulses.

Senator Woodley has mentioned the $5 billion cost per year. A big factor in the level of problem gambling is accessibility, especially to gaming machines, which has increased dramatically in Australia. Whereas a few years ago you had to go to New South Wales to put a bet on a pokie, now you only have to stroll down to the end of the road to the nearest pub. In my own state, the number of poker machines in pubs and clubs has grown by 45 per cent in the last 12 months. Australia wide, 15 per cent of gamblers are problem gamblers, and they spend $3.5 billion or one-third of the gambling market. Problem gamblers lose on average $12,000 a year compared with an average loss of $650 for other gamblers. So we are faced with a huge crisis.

The Commonwealth government does not have the requisite power under the Constitution to regulate gambling as such. That is the responsibility of the states and territories. They need to address the problem of problem gamblers. While there are some attempts to limit access, such as a cap on the number of poker machines, there is still a lot to be done. But can we really trust the states and territories to be the gatekeepers, because the states and territories are addicted themselves to gambling? There has been significant growth in most states' revenue in the 1990s since the licensing of casinos and poker machines. Gambling tax revenue as a percentage of own tax revenue increased on average from 9.8 per cent in 1975 to 11.7 per cent in 1998. Western Australia's percentage actually dropped from 6.4 per cent to 5.7 per cent. Western Australia has only one poker machine venue. Victoria now leads all states with 15.2 per cent in 1998 and 17.5 per cent in 2001. Tasmania increased its revenue from six per cent to 10.3 per cent. The Tasmanian government revenue was $73.3 million last year—quite a lot less than other states. In Tasmania, gambling on poker machines has increased dramatically since 1997 when poker machines were first permitted outside the casinos. In Victoria, the state government derives 17.5 per cent of its revenue from taxes on gambling. Poker machines make up 65 per cent of the $1.6 billion derived from gambling in Victoria. In New South Wales, 10.2 per cent of the state's revenue comes from gambling taxes. In Western Australia, which has no poker machines outside the casino, it is six per cent.

Based on the Productivity Commission's study, up to 42 per cent of state governments' pokie revenues comes from problem gambling. The Productivity Commission also found evidence of a concentration of gaming machines in areas of low socioeconomic status in Victoria, New South Wales and South Australia. This suggests that more residents in these areas are problem gamblers and the social cost is higher. There is need for urgent action by the states and territories to meet this crisis. They should directly reduce access to gambling. Is it too much to ask them to be the gatekeepers when they are the thieves? They are the ones who are addicted. They are the ones who are getting the money. Nevertheless, as Senator Woodley said, this is a matter of growing concern amongst the people of Australia and it could become a huge election question in the minds of a lot of voters.

I draw the attention of the Senate to the submissions made by the Fujitsu company and REGIS Controls on smartcard technology. Those submissions were made to the Senate Information Technologies Committee, and they are well worth considering. I suggest that the governments of the states and territories look at this technology to see what can be done with offline gambling. The system allows regulation of gambling on all forms of electronic gaming machines, EGMs, as well as Internet broadband and cable TV. The process was described in the following way. Around 90 per cent of poker machines in Australia are smartcard enabled but not activated. It is a relatively simple task to activate a smartcard reader. The personalised smartcard has 10 features which allow full regulation, including the proposed AUS model. The smartcard is programmed only to operate with cash, not a credit account. Smartcard has a built-in clock so that a player's limit can be recorded for a week, a month, a year and so on. Even if the player uses physical cash—that is, notes and coins—the smartcard still records the net loss incurred by the player.

There is one limit per player for all venues and all electronic forms of gambling. A player's card can be banned through self-exclusion, court order or injunction. The security system is defence style encryption and prevents fraud and tampering. All the appropriate features of harm minimisation can be incorporated in the smartcard system, for example, compulsory breaks, limits on playing time and retention of a proportion of significant winnings. This can be customised for each state and territory if there are different harm minimisation features. The minimal failure rate of smartcards and the security system eliminates coin jams, machine malfunction, cash pilfering and the risk of serious crimes. The card can be used anonymously so that the venue does not know who the player is or the amount that they have spent. The card tracks losses per session, per week, per month, per year and displays this information when requested by the player. The card issue process would involve the player requesting a smartcard that is personalised. Most major poker machine venues issue a magnetic stripe card currently so that they can track the player.

The card would be issued to a player based on a 100-point check as for a bank issued card. The player can load cash either directly from a deposit or current account, or via the use of physical cash. Lost cards can be replaced with the amount of e-cash restored. The card can be locked so that no-one else can use it. If venues want to offer a loyalty system, and most currently do, that can be provided via the card with bonus points stored on the card. The loyalty system would be entirely at the individual's discretion. Overseas visitors can be issued with a temporary card. Players cannot change their limit upward for a 12-month period, but they can reduce their limit at any given time. All cards and the operation of the system would be paid for by the gambling industry. In fact, the industry would save some tens of millions of dollars per annum in machine maintenance, pilfering and security costs. Card issuing and service centres could be located anywhere in regional Australia.

I took the time to place that on record so that the matter can be considered further not only by the states and territories but also by the Commonwealth. There needs to be a tightening of the regulations and the crisis of problem gambling needs to be addressed. The question that the government is faced with is: given that crisis in gambling, do we then extend access to gambling through the Internet? The clear answer is that we should not. As the bill stands, it does not ban gambling on overseas Internet sites. It does attempt to do so on Australian sites, but it does not do so on overseas sites. I intend to move amendments that will prevent gambling on overseas sites.

Just as Australia's Internet content regulations, although well intentioned, have been unable to effectively restrict access to overseas porn sites, so too will the complaints system proposed in the bill do next to nothing to restrict access to overseas gambling sites, despite the amendments that will come in about the arrest of international operators if they set foot on Australian soil, or the ban on advertising. As I have indicated, overseas sites are poised to take advantage of the legislation. Sportsbet.com have purchased a large operation in Vanuatu in anticipation of the commercial opportunity that will open up to overseas operators if this legislation is passed in its existing form. That happened just recently. There is considerable email spamming inviting users to casino sites linked to porn sites. Anyone with a hotmail address knows what I am talking about.

Our young people are prey to these highly unethical and undesirable tactics. They are being invited to what appear to be sites hosting harmless games, but then they are invited and enticed to enter linked porn sites. Every possible effort should be made to protect them. If access to non-Australian based interactive gambling services remains in the bill we will find that the new wave of problem gamblers in this country will be young people—the computer savvy people. Those young ones will make up the new generation of problem gamblers.

I have forwarded to all colleagues a list of amendments this morning, and I ask that colleagues look at them. I request that they be considered very thoroughly by colleagues. Unless the bill is amended, we will play into the hands of international Internet gambling sites. That relies on a number of powers, including the banking power. NOIE considered this matter, but its report largely restated the objections of the banking industry—by the Australian Bankers Association. We should realise that if persons say, `This really is a bit over the top.' Just remember that the people who say that are the banking industry. (Time expired)