Gambling

Gambling has popped back into the news. Just a little before, I wrote this in BRW:

Thinking further afield, consider the problem of gambling. The Productivity Commission estimates that the social costs of gambling are in the billions and that controlling them would be well worth any cost of revenue and taxes. But how do you do it? It is very hard to monitor individual gambling habits and choices. But what if information technology can assist here?

Around the world various solutions are being trialled. Smart cards can be used to put pre-set spending limits on gamblers. However, research in Nova Scotia Canada has show that this is only good in so far as gamblers can’t just get another card.

Alternatively, a simple USB key with a finger print sensor can register gamblers and send the information back to a centralised system. They can then monitor behaviour and put in various steps to stop people from getting carried away. For example, individuals could set daily or weekly spending limits. Exceed this and the system knows and puts a block on the individual concerned. Such innovations would be well worth trialling in the lead up to the Victorian government’s poker machine tender.

Harry Clarke argues, and I agree, that we need to look to State governments to get off the revenue juice from this. What is more, inject a bit of competition between providers at the same time and maybe the withdrawl symptoms on those governments wont be so great.

5 thoughts on “Gambling”

  1. Joshua,

    Well written. The potential for smart technology in gambling policy is huge.

    On the point about competition, I would hesitate before assuming that increased competition will produce improved results in addictive markets. It did not work for alcohol policy in Victoria, where competition was used as a rationale to increase the number of packaged alcohol venues and their opening hours (in the name of free choice). Good for competition, bad for alcohol abuse.

    Increased competition for gaming machines in Victoria has resulted in the highest spend per machine in the country (not per-capita, but per machine). These are not normal markets and should not be treated as such.

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  2. These are good techniques for dealing with ‘within session’ self-control problems. Moreover, given the demand for self-exclusion and the fact that gamblers expend respources trying to rid themselves of gambling addictions they would gain some support – obviously not from those holding pokie licences.

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  3. It would be possible to link problem gambling outcomes with licence sales. For example, one of the criteria for winning an operating licence (for Victoria only) would be improved problem gambling outcomes.

    This might be a tad problematic, however, as it may come down to measurement. “Our researchers found a halving of problem gambling this year”. We want the focus on outcomes, not measurement. This is one of the reasons why smart technology is great.

    Otherwise, I agree that competition for operator licences would reduce monopoly rents (increasing the tax take) but I can’t see why it would change problem gambling outcomes. I think this should be the focus.

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