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Environment and Communications Legislation Committee
07/03/2017

HENLEY, Mr Mark Clayton, Manager, Advocacy and Communication, Uniting Communities

[11:42]

CHAIR: Welcome. I invite you to make a brief opening statement and then the committee will ask you some questions.

Mr Henley : Perhaps if I can start where the committee was before and actually take you on a really good time. I am going to take you to the Adelaide Oval to watch the mighty Crows come out and play a game. We get to the game. The crowd is roaring. The Crows have just run onto the ground. The opposition is there. The atmosphere is building and, of course, as you have just heard, the entire fence lights up with 'Bet now, bet now, bet now' flashing at you, and that will continue during the game. Of course, on the way in to watch the mighty Crows, we have been listening to the radio to get the latest on the ins and outs of the team and learn a bit more about the game. In respect of the radio station which we have been listening to there have been crosses to the sports betting company, which of course is one of the sponsors of the two teams that are playing today. We have heard odds on a number of events. We have perhaps heard a couple of exotic proposals put up. We have heard a bit of banter between the sports presenters. We have heard that Sydney is playing Collingwood and that Sydney is paying $1.10 for the win. The commentator says: 'Well, that's a dead certainty at $1.10. That's better than bank interest. I'd take that any time.' And so it goes on. We get this constant advertising and not quite advertising banter going on as part of the coverage of the game.

If I had been involved with preparation for the game, I would have been going on a website or perhaps through social media where I would have been getting advertising coming at me to basically bet with a particular online sports betting company. The point is that online spots betting advertising is everywhere. It is across a whole range of advertising media—it is not just TV; it is not just the William Hill ads; it is not just the odd billboard. It is social media; it is part of the commentary; it is live crosses to sports betting companies; it is the whole box and dice. Of course, this is all happening in 'G' rated time, so this is all advertising that is exposed to children, to adolescents, to people who are open to suggestion. And, of course, the normalisation of online sports betting and the inculcation of online sports betting with sport means that young people in particular are understanding that sports betting is part of the sporting experience: I am not just going to support my team—I am going to back my team; I am going to bet on them. It is part of the experience. That is part of the dilemma, part of the problem, that you are working with the senators on.

I will come back to this in a moment or two, but I quickly want to highlight that I represent Uniting Communities—a large UnitingCare agency based in South Australia. We have been active supporters of the Churches Gambling Taskforce, we are members of the Alliance for Gambling Reform, so we have been a part of advocating and research on gambling for many, many years. We are also a large service provider and this is, frankly, why we are here: because so many of our services—disability services, aged care services, carers, as well as financial counsellors—are telling us stories all the time about the impacts of gambling and, increasingly, stories about online sports betting are emerging.

My colleague, Lauren, from Financial Counselling Australia, will be addressing you after lunch. We certainly support what Financial Counselling Australia is saying. Some our financial counsellors have fed into what Lauren is presenting; it is part of what is our experience, too. We know that gambling causes harm, we know that online gambling is increasingly problematic. We know that advertising is part and parcel of the story.

CHAIR: Mr Henley, I am sorry, but I am very conscious of time. We only have just over 20 minutes to give you questions, so could you please wrap up your opening statement.

Mr Henley : I will summarise by saying I will mention Professor Robert Williams from Canada, who is one of the world's foremost researchers on gambling. He has stated in a range of reports, including a metric analysis, that online gambling harm increases with accessibility, as with all other forms of gambling. He has looked at a whole lot of countries and, on average, online gambling harm levels are about double the rate of gambling harm for other forms of gambling, so this is a real problematic issue.

I would quickly like to highlight a couple of other bits of research. The Swedes are increasingly showing that online gamblers are not just young males—true, they are a major group but, increasingly, school-aged mums are buying into online sports betting. So the feminisation of online sports betting—

CHAIR: Sorry, mothers of school-aged children—is that what you are saying? Not school-aged mothers.

Mr Henley : That is what happens when you try and speak up! But of course, part of the story is that many young people aged under 18 are betting on sports activities. The point I was trying to make is that the Scandinavians are showing that, where there has been the longest history of online sports betting, the feminisation is occurring.

I was hoping to draw attention very quickly to a study done by Matt Brown and a whole lot of others, funded by Victoria, on using a burden of disease approach to gambling—this is gambling overall. One of their headline findings was that almost half of all gambling harm accrues to people who are rated as low-risk gamblers. Only about 20 per cent of total gambling harm actually accrues to people who are rated as problem gamblers, using the standard problem gambling measure, so we need to be well aware that all forms of gambling, including online gambling, impact heavily on people who are regarded as low-risk gamblers. It is not just a problem gambling, high-problem gambler issue.

I will conclude by noting that online sports betting is harmful. If online sports betting were a pharmaceutical I suggest to you that it would not be approved. It impacts on individuals, it impacts on the economy—it is a net drain on the economy, I would argue—and of course it impacts on sport integrity, another issue that we have not touched on.

In summary, our recommendations absolutely support the ban on advertising for online gambling across all forms of advertising. We absolutely support a national online gambling regulator. It has to be a national regulator. States can regulate state based stuff, but no state can regulate the online environment. We would also encourage the committee to look at international collaboration on online gambling monitoring, whether it is protocols or stronger links internationally around online gambling. In fact, I am part of a small group that is preparing a paper to the World Health Organization proposing an international online gambling regulatory model. There is a role that Australia can play in promoting online gambling regulation and cooperation internationally on international forums of which we are part. We could be putting this very agenda on the international agenda. There are other recommendations we make in our submission, but I will leave it there.

CHAIR: Thank you very much, Mr Henley. I just have two questions—no, actually I do not even have two questions for you. I noted in your opening statement that you acknowledged that at the moment the regulatory framework is at a state level but collaboration with states at a federal level is what is required.

Mr Henley : Online gambling has to be dealt with at a national level.

CHAIR: In your submission you supported transaction blocking, but the cost of transaction blocking, the ABA has pointed out, is quite prohibitive. How do you respond to that?

Mr Henley : I would say the cost of harm is even more prohibitive.

CHAIR: But who is responsible for paying for transaction blocking?

Mr Henley : I do not have a direct answer to that. I am happy to come back to you on that one after giving it a little bit more thought. But I do not actually accept the argument that it is prohibitively expensive. We already have transaction blocking in place, effectively, in other forms. We have limits to ATM withdrawals. We have a range of limits that already apply. I remain unconvinced by the argument that, in practice, transaction blocking is that expensive. It happens already.

CHAIR: The ABA have said that it is prohibitive.

Mr Henley : Of course they would. If it were regulated, they would change their tune.

Senator KAKOSCHKE-MOORE: This morning there has been some discussion around the amount of research that has been conducted into gambling, and some witnesses have said that they believe more research is needed before further action is taken in a regulatory sense. I want to know what your view on that is.

Mr Henley : To be perfectly honest, I think that there has been a lot of gambling research. There has been a bit less, probably, in the online space, but there are thousands and thousands of published gambling research reports in Canada, in Europe, in Australia and increasingly coming out of Asia. I think there actually is a lot of research. From a public policy point of view, we know the key information. We know that gambling is harmful, we know that it is risky and we know that regulation is needed to rein in the worst excesses. So I think we very clearly know what we need to know to make good public policy.

Senator KAKOSCHKE-MOORE: If this committee were to, in its report, make recommendations, what would your recommendations be in relation to steps the government could and should take now to reduce the harm caused by gambling?

Mr Henley : I think there are two levels. There is the slightly longer term, but for me the really important starting point is establishing a national online gambling regulator. We have to get that structural piece in place, because then the states can work around it and they can work with police and other enforcement bodies. We have to have that piece of the structure in place, and it is currently missing. So for me that would be the very first one.

I think there are some quicker wins. I would say banning online gambling advertising is relatively straightforward. There would be some political odium, but there is political odium with everything, and that is, frankly, a good public policy outcome. Then I think banning credit betting and inducements is the third, frankly, fairly easy-to-introduce recommendation that the committee could come up with.

Senator KAKOSCHKE-MOORE: Great. Thank you very much.

Senator WHISH-WILSON: They are good, strong recommendations. I was interested in your statement earlier, Mr Henley, when you mentioned that evidence suggested that mothers with kids of school age are part of the demographic that are using these services. Could you tell us a little bit more about those kinds of studies. The committee has received some evidence, broadly, from a number of submissions that point to studies, but could you give us any more details about those kinds of studies.

Mr Henley : I am happy to pass through references, but I am referring to Swedish research through the Swedish National Institute of Public Health. Researcher Jessika Svensson is one of the authors who has been involved with that. I can track down—

Senator WHISH-WILSON: If we could take that on notice.

Mr Henley : I think this is relatively new, even in Scandinavia, where online gambling has been around for longer and the demographic is shifting and more feminised.

Senator WHISH-WILSON: We have had a few reflections on some overseas jurisdictions today, but not much. Can you give the committee an idea of whether the kind of issues you have outlined today are similar in other countries, and has more research and work been done that we can access?

Mr Henley : Yes, there is more research. I think the Canadians are probably the best placed to look at first, partly because in Europe for every jurisdiction there are about three different policy outcomes. The online gambling space in Europe is a classic example of the absolute full spectrum of responses. I think the Scandinavians are a bit ahead of the pack, partly because online gambling is more prevalent there and it has been happening there longer. I am sure that is a function of long, cold winters, frankly. I would start with the Canadians—what William has already mentioned. There are others I am happy to point you to. The really important one that is worth mentioning—and you had a big discussion earlier about it—is Tony Schellinck and Tracy Schrans, who have developed algorithms to identify problem gambling behaviour, including in an online environment. They presented to the South Australian Independent Gambling Authority in November 2015. It might be worth having a quick look at what they presented there. I have had a number of discussions with Tony Schellinck. He is an out and out mathematical genius. The complexity of the algorithms and the accuracy is growing all the time so that these are very accurate algorithms in being able to identify increased gambling risk for an individual based on their own past gambling experience. It is a really useful part of where we can be going.

Senator WHISH-WILSON: I think Mr Conroy has made it fairly clear that those kinds of patterns that could be detected also suggest risks to the companies themselves when they might not get paid. That evidence has come up in our submission as well—that these wagering companies are more interested in their own risks than they are necessarily in the harm being done to online gamers. So I am actually fascinated that they have not thought of this, as well, considering that their own bottom line is at risk potentially. I am not sure if that is a realistic consideration. I know they make a lot of money out of the problem gamblers. That is definitely the case. But it must also introduce risks for them as well.

Mr Henley : From my point of view where I come from the public policy imperative is to reduce the risk for Australian citizens. The companies come second.

Senator WHISH-WILSON: That is right.

Mr Henley : And a distant second, in my opinion.

Senator WHISH-WILSON: Philosophically, I would not disagree with that either. I am fascinated that they should be developing similar algorithms. Mr Conroy also said that if they detect changes in patterns they can do that fairly quickly, presumably because they have an algorithm already. I should have asked him that. They then contact people and ask what is going on. I am looking forward to Mr Conroy providing the committee of more evidence of how that happens and how often it happens and whether they do detect problem gambling. One thing that has also become very clear to us in the evidence is that the self-exclusion and self-reporting is suspected to be only a very small percentage overall of the people out there who are problem gamblers using these online systems. Do you have any evidence of that yourself that you can provide to the committee?

Mr Henley : I take a broader 'addictions view' as an organisation that has been providing alcohol and drug services for over 100 years. I will quote an English expert in this area, Jim Alford. Basically, the evidence across addictions is that about 10 per cent of the people with a problem will self-identify as having a problem—whether we are talking alcohol, ice or gambling, it does not matter. That self-reporting rate of about 10 per cent is pretty standard. So a 10 per cent self-reporting rate for online gambling is in line with self-reporting in other areas of addiction. The more acceptable it is to seek help, the easier it is for people to start seeking help. That is why I think leadership from the Senate is important on this one, so that the 10 per cent who seek help are helped and can encourage others through informal networks to also seek help.

Senator WHISH-WILSON: This is the last question from me. I got the feeling from Mr Conroy's presentation earlier that his suggestion to the committee was that we face the lesser of two evils here. If we ban advertising for sports betting then people are going to go offshore, which is a much worse situation given they are deregulated. Are you aware of any way to prevent Australians, especially problem gamblers, using offshore platforms if the Australian ones are too tightly restricted or regulated?

Mr Henley : I would respond in three little answers, very quickly. First of all, I think that the critical thing is that a ban on advertising applies to everybody. It is not as though you are giving the international ones a free kick. Second, a review into illegal online gambling is doing a bit of work in this space—and I know you are well aware of that—so I think it is important that the national online gambling regulator has a licensing role, so that if you are not licensed to operate in Australia, however you are detected, you get hammered. That is a critical second part of it. The third part is the comment I made briefly that Australia could play a role in some international collaboration on online gambling regulation, because the evidence is that pretty much all online gambling providers are registered somewhere. If get the international collaboration happening—and that is not going to happen overnight; I am well and truly aware of that—we could start doing some moving through the World Health Organization, through G20, through CHOGM; there is a range of mechanisms we could use. There would be other countries that would come on board and be supportive, I am sure, and we can build a base to rein in online gambling nationally—a bit like WADA has done, I would suggest, with doping in sport.

Senator WHISH-WILSON: It seems like the Singapore government has done it. I would be interested to ask Tabcorp some questions next, because it sounds like they have got a blacklist together and have shut those sites down. I might go to Senator Chisholm and come back for one more question, if you do not mind.

Senator CHISHOLM: Thank you for your evidence, Mr Henley. I do not know if anyone asked Mr Conroy about the ability to put money in your accounts using a credit card. It is something that you can do both in Australia and if you were using an offshore one. Is that something of concern to your organisation?

Mr Henley : Absolutely. We are opposed to all forms of credit gambling. We recognise that if money is going from a credit card into an account, it is a secondary process, but we would much rather see credit cards not being used as a source of gambling revenue. I think the other thing is that there are some protections that can be put in place around that too—mandatory pre-commitment is dead easy to do in an online environment—so if we could have some stronger harmonisation measures then that would perhaps reduce some of the risk of credit card gambling. While yes, we would prefer that credit cards were not going to be used, we recognise that there will be hue and cry if the committee recommended that, so the trade-off I am giving you is that we have much stronger controls around limits to amounts of money that can be transferred, and that those be enforced—mandatory pre-commitment on all online gambling activities.

Senator CHISHOLM: Do you think that would come down to being a responsibility of banks, the betting companies or a mixture of both?

Mr Henley : That is a mixture of both. The business-to-business stuff would have to be sorted out between them, but if you have this national online regulator saying, 'Here's the rules, here's what you have to achieve,' then they can grumble, but they will work to achieve it.

Senator CHISHOLM: In your opening statement you talked about some of the emerging markets. I think it was younger women or mums?

Mr Henley : That was the Scandinavian experience.

Senator CHISHOLM: Is it pointing to people who have time on their hands, or is it people under financial pressure? Is there some sort of trend emerging as to what is driving this?

Mr Henley : I think the overarching evidence is that people are more susceptible to gambling risk, including online gambling risk, when they are vulnerable. People are vulnerable for a whole range of reasons: for young mums, it is, 'My kids have gone to school; what do I do with myself now?' For a lot of people we see, it is the casualisation of the labour market: 'I've got work and I am coping for a few weeks but then I lose a few hours and I can't pay the bills, and I'm really stuck. I have time on my hands and I'm upset, and it gets harder,' and the advertising hits at that point in time. So there is vulnerability around work, vulnerability around relationships and vulnerability around changing stages in life—kids leaving home, all that sort of stuff.

Mental health is another factor. I think vulnerability is the driver of much gambling and other harm. Part of the reason we are so concerned about advertising is that it chips away, and because it is ever-present, when people are vulnerable, bang—that is when they hear it and respond.

Senator CHISHOLM: If you are addicted to pokies, there is a bit of effort required for you to get up and go to a club, pub or whatever it is to play the pokies. But with interactive gambling, you basically do not have to leave your house or your bedroom to do it. Is there anything to indicate that it is therefore potentially more addictive because it is easier, or is it not really a fair comparison?

Mr Henley : I think the evidence is pretty strong that access is what drives gambling use and gambling harm. We saw a rapid rise in poker machines when suddenly, in Adelaide or Melbourne, there was a hotel with a poker machine on just about every street corner. Most people going to poker machines were going to venues within five minutes from home, so accessibility was the big issue there. With online gambling, certainly, accessibility is a big factor, and for different groups in the community that accessibility changes. The rapid increase in use of smartphone technologies and in IT penetration means that younger people have found online gambling more accessible than older people, who are less familiar with those technologies. But I suggest that as familiarity with the technology increases, coupled with advertising and aggressive promotion, then the accessibility will increase.

I think the evidence is a bit mixed as to whether today's poker machine player is tomorrow's online punter. I do not think that is clearly identified—although, from gambling counsellors that story is changing a bit. Ten years ago a TAB punter was a TAB punter and a pokies player was a pokies player, and never the twain shall meet. I think those boundaries between gambling forms have blurred, but many people are still pretty strongly committed to their preferred mode of gambling.

Senator CHISHOLM: Thank you.

CHAIR: Mr Henley, you are free to go. Thank you very much for appearing before the committee today. The hearing will now suspend until 1.10 this afternoon, when we will resume with Tabcorp.

Proceedings suspended from 12:08 to 13:08