Wednesday, October 03, 2007

Tuesday Column: The city the poker machines ate

There’s something very odd about poker machines in the ACT.

And I don’t just mean the Chief Minister’s absurd-sounding statement that they are okay because some people enjoy using them. He told this paper last month that he saw them as “an outlet” and asked: “Who am I to deny people their pleasure?"

Part of what’s odd about poker machines in the ACT is the sheer number of them.

There are 5,200 poker machines within the ACT’s borders. That’s right – 5,200, which according to the Australian Gaming Council is more per person than any other state or territory.

The ACT is better served with gaming machines than is Australia’s supposed poker machine Mecca, NSW...

A few weeks back the ABC’s Four Corners broadcast some harrowing stories of the lives wrecked and lives ended by poker machines in NSW.

One woman was living on the rent from a half-a-million dollar house she owned. As her habit took hold she sold it and used all of the proceeds to feed the machines.

A Woolworths’ pay clerk stole $2.6 million to keep feeding them. Her club knew she was pushing in an obscene amount of money but never tried to stop her. She was jailed for seven years and her husband committed suicide.

In the wake of the program Labor’s leader Kevin Rudd said that he hated poker machines. Tim Costello, the head of World Vision Australia said he wanted the numbers cut, the machines slowed and automatic teller machines removed from the clubs and hotels that house them. His brother, the Treasurer Peter Costello applauded the owners of the South Sydney Leagues Club Russell Crowe and Peter Holmes a Court for announcing their plan to remove all of the club’s 160 poker machines.

Four Corners only ventured into the ACT in order to interview an ANU academic. But I suspect that if it had lingered it could have made an equally shocking program about what is happening here.

At the Canberra Tradesmen's Union Club in Dickson the ATM is placed just metres away from the machines. The Gaming Council says the ACT has the highest proportion of gambling-related bankruptcies in the country. While our population is a mere 1.6 per cent of Australia’s total, we account for 4.8 per cent of Australia’s gambling-related business bankruptcies and 5.8 per cent of gambling related personal bankruptcies.

Disturbingly, the Council says gambling-related bankruptcies are climbing in the ACT while they are falling in Victoria, Tasmania, Western Australia and the Northern Territory.

Our special status in hosting the highest number of poker machines per head in the country probably makes us special internationally. Australia is said to have the highest concentration in the world. Tim Costello says that when he recently outlined Australia’s poker machine saturation to the British House of Lords its members were so staggered they thought they had misheard him.

The ACT might just be the world’s poker machine capital.

(As it happens we are not a world leader when it comes to the amount poured into the machines per head of population. NSW beats us there, using its machines more intensively. Even if our bankruptcy statistics suggest we do so less wisely.)

So why won’t the Chief Minister cut the number of machines, remove ATMs from the venues that house them (not just from the rooms) and slow them down?

You would imagine that it’s because our Budget is dependent on poker machines. That’s Tim Costello’s guess. He says Australia’s states and territories rake in more than $4 billion a year in poker machine taxes.

But the thing that’s really odd about the ACT and poker machines is that, notwithstanding the number we have and the amount of money they rake in, in the ACT government gets little of it.

Each year the industry-funded Australian Gaming Council produces a comprehensive database on gambling spending and taxation. Its latest figures, for 2004-05, show that the ACT’s per capita tax take from poker machines is not the highest or second-highest in Australia as would be expected, but the fourth-highest - behind NSW, Victoria, Queensland and South Australia. Only Tasmania, the Northern Territory and Western Australia rake in less tax per person from poker machines than does the ACT - and Western Australia doesn’t have poker machines outside its casino.

The figures aren’t a fluke. The Grants Commission has been reporting for years that the ACT collects less gambling tax than would be expected.

The actual tax rates are hard to compare. NSW bases its rates on “annual revenue”; Victoria on “player loss”; Queensland on the “monthly metered win” and the ACT on “gross monthly gaming machine revenue”.

But the result is that we take in less than each of those states per person, and a good deal less per dollar gambled.

The Chief Minister is completely correct when he says that the ACT’s Budget is not dependent on poker machine revenue. $31 million out of $3 billion would be noticed, but its loss would hardly be fatal.

Which raises two intriguing questions. Why won’t the Stanhope government increase its taxation of poker machines to the Australian standard (it could run more busses and keep open more schools) and why is the Chief Minister so insistent that he won’t legislate to cut the number of poker machines to something less than our current Australian record high (after all, he isn’t dependent on them).

I don’t know the answers, but I have a suspicion. The Canberra Labor Club runs more than 400 poker machines at its venues in Civic, Belconnen, Charnwood and Weston Creek. The Tradesmen’s Club (owned by the Construction Forestry Mining and Energy Union) runs many more.

The Canberra Labor Club stands out as being an enormous donor to the ACT ALP. Its contributions, reported each year to the Australian Electoral Commission, dwarf those of every other donor. Lesser donors include the Tradesmen’s Club and the Canberra Southern Cross Club.

The Electoral Commission figures suggest that without the hundreds of thousands of dollars donated to it by the Canberra Labor Club, much of which would come from its 400+ poker machines, the ACT ALP would be in financial trouble.

I’m hoping this isn’t why the Chief Minister is reluctant to seriously restrict the operation of poker machines in the ACT. (He has limited the machines to taking $20 notes but he hasn’t stopped them taking notes; he has taken the ATMs out of the gaming rooms but not of the venues).

I am hoping there’s another reason. I would like him to explain what it is.