Victorious over gambling duopoly

The Victorian government has moved to break-up the poker machine duopoly held by TabCorp and Tatts. As I understand it, what this means is that poker machine licenses will now reside with venue owners. Competition issues aside, this makes sense as poker machines are an instrument by which venues compete for customers. Moreover, the proposed caps on the number of machines per venue effectively mean that licenses cannot be accumulated by a few venues to raise entry barriers for others. That means that there will be stronger competition between venues and this means that consumers will be the winners.

Now, as Harry Clarke notes, this raises an ackward prospect: more people may end up gambling. But the change in who gets the dividends from poker machines matters here. Previously, this was effectively shared by the Victorian government and the duopolists. Now, the Victorian government will get most of this through licensing fees and taxation. Left to itself, one suspects that the government in 2012 (when the changes come in) may be quite happy with this state of affairs. So the problem is: we have to ensure that measures are put in place today that will limit the amount of gambling and, in particular, problem gambling that might occur.

The Brumby government today is talking about a monitoring system that will allow identification and intervention of problem gamblers. (I have written about such systems previously here). That will impose costs on poker machine operators and also likely reduce their revenue. And at the same time, it will reduce the take of the 2012 government.

It is ironic that our social concerns are about people who become addicted to gambling and at the same time, we need to worry about a government who might become addicted to gambling revenue. For that reason, it is critically important that these changes are accompanied by a serious set of policies to deal with problem gambling.

One thought on “Victorious over gambling duopoly”

  1. The only way Government was going move to reduce problem gambling was by securing its tax revenue. The decision to remove the duopolists from their entirely redundant role sets the stage for this. Using monitoring data to help gamblers to help themselves is the only realistic way to improve problem gambling outcomes, short of removing them altogether.


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