Gamble Me This
My favourite Batman villain is the Riddler. I’m not sure what the appeal is. The Riddler wears green tights. Why does the Riddler wear green tights? Why would anyone wear tights? Whilst men in tights might be manly men according to some (1) I’m thoroughly unconvinced that it’s anyone’s best look. Turning to the serious, can someone riddle me this?
How can the production and operation of a machine programed in such a way so as to ensure that its users will lose money over time be legal? Yet sure enough the one armed bandits are part of the furniture all along the eastern sea-board of Australia. Despite the bi-partisan approach of the West Australian political parties they are slowly spreading in the west.
To put this issue in perspective consider the regulations surrounding the finance industry which are enforced by APRA. There are strict provisions governing the provision of finance which stipulate quite clearly that finance providers cannot lend to consumers when consumers are unable to service the repayments on the debt. This legislation ensures that lenders cannot take advantage of consumers to increase their profits.
Payday lender The Cash Store recently fell afoul of this legislation and was fined a just under nineteen million dollars (2). Yet the same country which fines the Cash Store allows businesses to operate machinery designed to syphon money away from users over time. Electronic gambling machines take advantage of consumers a very similar way that unscrupulous lenders can take advantage of consumers. It seems a most puzzling enigma.
Make no mistake these machines take advantage of people. Whilst you may get lucky once or twice, over the long term those machines will always make more money for their owners than they pay out to their players. They are designed to do just that. They are designed to assist people to lose control. They encourage bad decisions. It requires the most peculiar mix of hubris coupled with a lack of education to believe that anyone can somehow consistently beat the systems these machines employ.
It consistently leaves me flabbergasted that this industry, which so obviously takes advantage of the ignorance and weaknesses of others for the direct benefit of the owners of these machines, is allowed to operate.
It’s not as if gambling is a small problem either. The Australian Government provides some disturbing statistics on gambling (3). Sadly there are as many as five hundred thousand Australians at risk of becoming, or actually have become, problem gamblers. One in six people who use gambling machines have a serious addiction. Furthermore one problem gambler may negatively impact the lives of between five and ten others.
Australians spend twelve billion dollars on these machines each year. Just think of the good that money could do elsewhere in the community. On top of personal spending on gambling the social cost of these machines is estimated to be around four to five billion.
To provide some perspective the federal budgets underlying cash balance for the 2015/16 financial year is projected to be 17.1 billion in the red (4). The money wasted on these machines and the social cost associated with them is enough to balance the federal budget. Of our elected federal politicians only Andrew Wilkie and Nick Xenephon are actively campaigning against the electronic gambling industry.
To be totally clear here I’m not suggesting that all gambling should be banned. People should be able to enjoy a punt. I used to regularly play no limit hold-em poker. I was a winning player who turned a small profit. I won a major event where I won a trip to Melbourne and played against five other winners on TV.
What is the difference between poker and pokies you ask? When you sit down at the poker table the basic odds are the same for all players. When you sit down at a gaming machine the odds are not even. The machine is programmed to pay out less money than it takes in. The player is at an obvious disadvantage. It is a clear difference.
There is a great deal of money tied up in these machines. The clubs and pubs who own them argue that they would have to raise prices in order to be profitable without these machines. I guess as a society we have a pretty clear choice to make.
On one hand we can let the situation continue. Beer will be a little cheaper and our meals will also be a little cheaper. Half a million Australians, who are often the most disadvantaged, will be fleeced by gaming machines to fund this. Alternatively we can shut down the pokies, and pay a little extra for our pint and pizza.
(1) https://www.youtube.com/watch?v=Xwr-7nkTuX4
(3) http://www.problemgambling.gov.au/facts/
(4) http://budget.gov.au/2014-15/content/overview/html/overview_01.htm