17 November 2010

Reforms to gaming

| johnboy
Join the conversation

“When Dr Johnson defined patriotism as the last refuge of a scoundrel, he was unconscious of the then undeveloped possibilities of the word ‘reform'” — US Senator Roscoe Conkling.

As you might have guessed by my use of the above quote experience has made me suspect of the word “reform”.

Today Andrew Barr has announced reforms to the gaming industry.

The heart of it is supporting the Greens’ “mandatory contribution by the operators of gaming machines to a central problem gambling assistance fund”.

Also proposed are:

    — A reduction of 143 in the gaming machine ‘cap’, to be implemented by eliminating the gaming machines currently in the gaming machine pool and currently unallocated to clubs;
    — Allowing multi-venue club groups to transfer gaming machines internally subject to the social impact and needs assessment currently outlined in the Gaming Machine Act 2004;
    — An increase in the required percentage of community contributions from 7 per cent to 8 per cent of net gaming machine revenue. Gambling assistance levy payments would be included as community contribution;
    — Consideration of requiring other operators, such as Casino Canberra and ACTTAB Ltd, to contribute to the gambling assistance fund in the future.

The second point might well be the key to this.

Join the conversation

All Comments
  • All Comments
  • Website Comments

Oh, and by the power of turning the ACT Community Contribs reports into Excel datasheets, increasing the community contribution by 1% seems to disproprtionately affect the smaller end of town more than the larger, thanks to the taxation scheme.

A 1% contribution increase directly draws from the bankable revenues from small operators (who pay no tax, so miss out on the benefit of the Mandatory Contribution = 7% of NGMR, NGMR = GGMR – Tax – (0.24 * GGMR) calculation), but becomes only a 0.6% increase on any operators in the highest tax bracket (due to NGMR calculation including that tax factor).
So this decision is still a regressive model.

There is also scope for mandatory problem gambling contributions to actually result in less dollars spent on community causes (ie: charity, community welfare, non-profit activity, community infrastructure, sport) on the whole.
Why do I say this? Because its legal, and there’s a 30% discount on cash spent by supporting the community in this way, since there’s already a factor of $4 calculated for every $3 contributed to problem gambling causes.

Problem gambling community contributions
(1) For every $3 of problem gambling community contributions that a
licensee contributes to an entity under section 164 (1), the licensee’s
required community contributions must be worked out as if the
licensee had contributed $4.
Source: ACT Gaming Act 2004, Section 171A.

There are two incentive schemes in the Act which have been included to encourage gaming
machine licensees to increase their community contributions to women’s sport and to assist
problem gambling issues. The incentive schemes allow a licensee to claim $4 for every $3
spent on eligible contributions in these two areas.

Source: ACT Gaming and Racing Community Contributions Made By Gaming Machine Licensees Report, 26 October 2009

PS: The RiotACT: Poker machines, the money, and Labor by Skidbladnir, August 26 2009.
At 3,200 words its not short, but its useful information if you want talking points on the topic and some of you may find it interesting. (And there is no shame in a shameless plug)

colourful sydney racing identity8:24 am 19 Nov 10

p1 said :

johnboy said :

– make the pokies all turn off for five minutes each hour (at the same time) so people can have a break;

– plain packaging is appropriate for fags, why not introduce it for pokies? I suggest that all machines look identical, and run identical software. Also, do away with any colour, and those annoying noises

I think these are two really good ideas, although I would suggest that the pokies turn off for longer 5 minutes is only enough time for a bathroom break/smoke it should be 15 minutes which might make the player decide to leave.

Simple question: Who gains the most advantage from the new policy proposal?

Allowing internally-tradeable pokies without penalty just favours those large operators who have some machines with less-intensive usage patterns, and grants scope to move into newer premises in better territory, turning them into more intensive licenses.
So the smaller Clubs without multiple premises are stuck in underperforming behaviour patterns, but the larger ones get to further leverage off their size and outcompete the littler ones.

EG: 1) The Tradies Group could shift 200 of their 400 licenses (average annual earnings:$29,776 per machine) to a new premises, and still make just as much money from Dickson operations if they just headhunted the Gaming Operations management team from Canberra Labor Club (average annual earnings: $60,294 per machine) to run them, for an immediate extra $6mil/year, while still having enough left over to open the sixth largest club in the ACT using only their reserve.
EG 2) The Weston Creek Labor Club could just shift its 63 underperforming licenses (average annual earnings: $28,582 per machine) out to existing City or Ginninderra premises (average annual earnings: $60,294 and $49,326 per machine respectively) and make an extra $2mil/year without even trying.
EG 3) Southern Cross Club could strip the 148 machines out of the Yacht Club, Yamba Sports Club, CSCC Turner, and CSCC Kaleen ($6201/machine, $11,047/machine, $12,785/machine, $14,571/machine), and put them in a new premises earning $6mil/year instead of the current 1.6mil/year).

Also, where Clubs are the 143 machine reductions coming out of?
Thats up to $3mil in average annual revenue on current behaviour that he’s asking an industry just to give up, but up to $9mil if they’re coming from the MegaClubs.

p1 said :

…Political parties should not be considered community contributions…

They aren’t now, what makes you think its about to change?

johnboy said :

The second point might well be the key to this.

I will be interested to see the small print on how this will be implemented. Will a chain be able to strip *all* the pokies out of a club, then bulldoze it and build apartments?

I have a few additional suggested “reforms”:

– Cap the number of plasma screens and one club can own;
– make the pokies all turn off for five minutes each hour (at the same time) so people can have a break;
– why limit the increase to 8 per cent? I think 20 per cent would be a better number. And political parties should not be considered community contributions;
– plain packaging is appropriate for fags, why not introduce it for pokies? I suggest that all machines look identical, and run identical software. Also, do away with any colour, and those annoying noises, and;
– as a employment boosting measure, I suggest tying pokie numbers to services on offer at the club. In order to have the hundreds of pokies the big clubs have, they should have a resident hairdresser, shoe repairer, locksmith, diesel mechanic, flight instructor, and floor sander.

Legalise Club Poker already.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.