NSW Government’s Pokies Reduction Law Boomerangs

NSW Government's Pokies Reduction Law Boomerangs as Gaming Turnovers Continue to Soar

The latest report published by the Independent Liquor and Gaming Authority (ILGA) of New South Wales disclosed that pokie machine turnover for fiscal year 2014-2015 surged to AU$73.3 billion, coming from a previous fiscal year figure of AU$68.9 billion. The corresponding AU$4.3 billion increase, representing six percent (6%) growth in net amount generated by the remaining pokie machines in operation after NSW's introduction of the Gaming Machine Act in 2001, has given indication that the implementation of the said rule has been unsuccessful.

Designed to reduce the harms posed by problem gambling behavior among NSW residents, the pokie reduction scheme had taken out a number of slot machines out of NSW's circulation during the same period. The NSW scheme entailed forfeiting to the government one out of every three gaming machines sold by NSW-based pubs and clubs.
However, the resulting increase in pokie gaming turnover does not embody the desired results. The local government areas individually produced significant turnover increases despite reducing gaming machines via the pokies-trade and forfeiture scheme.

On a per area breakdown of the 2014-2015 pokie machines turnover, the Fairfield area shows the highest increase of AU$629 million. The area's total pokie gaming turnover surged to AU$7.6 billion for the year, while Fairfield's EGM inventory went down by 410 units during the same period.

Canterbury manifested the same trend, generating AU$223 million more than the turnover generated in the previous year, considering that the number of EGMs fell by 211. The same is true with Bankstown, which produced AU$254 million more than the previous year's total pokie machine turnover of AU$3.66 billion. Notwithstanding that Bankstown was able to reduce the number of machines by 236 in the same fiscal year.

Dr. Charles Livingstone, a gambling researcher at the Monash University said that NSW has to cut back as many as 70,000 or less pokie machines, if the government seriously wants the NSW reduction scheme to produce the desired impact. Dr. Livingstone explained that there are too many EGMS in New South Wales, but not all pokie machines are regularly and simultaneously in use.
Moreover, the Monash University gambling researcher attributes the turnover increase to the advent of multi-terminal gaming machines offering casino-style gambling entertainment such as blackjack and roulette. Unlike the conventional pokie machines that accept bets of AU$10 per spin, the newer models are configured to take up AU$100 in wagers per game. Dr. Livingstone added that the machine-reduction strategy is a great idea if undertaken seriously and for a prolonged period. Yet the gaming machine business has so much capacity that requires much larger cuts in order to achieve substantial turnover reduction.
A spokesperson for the ILGA remarked that the latest report does not include profits from gaming machines on a per area basis — a reference to turnover in the gambling industry is merely the amount collected as wagers less the amount of winnings paid to punters. The report revealed that NSW pokie players had lost more than AU$7.3 billion to gaming machines during the recent past fiscal year.

The ILGA spokesperson called attention to NSW's growing population and economy. He also cited the continuously evolving gaming machine market that tends to adapt to the trends and changes in individual business conditions.
Still, NSW Gaming Minister and Deputy Premier Troy Grant defended the pokier reduction scheme. Through a spokesperson, the Gaming Minister asserts that the strategy is successful, since every year, the government was able to take hundreds of gaming machines out of circulation.