Asia | The biggest losers

Australians spend more on gambling than people anywhere else

The industry spends a fair bit on lobbying, too

Electronic cocaine
|SYDNEY

A BILLBOARD promoting huge cash jackpots hangs over the highway approaching Revesby Workers’ Club, in a rundown suburb in western Sydney. Cafés, restaurants, a hairdresser and a gym are all housed inside the refurbished block. Yet the rooms full of electronic slot machines are among its chief attractions. Rows of ageing punters sip beer and smoke cigarettes as they await a payout from the “pokies”, as the machines are known. Most will leave disappointed: gamblers lose A$330m ($255m) a year at clubs in Canterbury-Bankstown, the local municipality.

This is no anomaly. Australia fritters away more money per person gambling than any other country. According to H2 Gambling Capital, a consultancy, the average adult lost $990 in 2016; 49% more than Singaporeans, the next-biggest losers. According to an old saying, they would bet on two flies walking up a wall. The pokies are far and away the most popular form of flutter, accounting for over half of annual losses (spending on gambling minus the payouts from it) of $18bn (see chart).

That is partly because of the proliferation of pokies: after decades of liberalisation, the country is peppered with some 197,000 machines—one for every 114 people. Most states allow them in pubs as well as clubs like the Revesby; only Western Australia restricts them to casinos. Punters can bet big and often, incurring losses of up to A$1,200 an hour. Critics say the pokies are designed to get players hooked. Their many potential combinations, “near misses” and promises of big payouts cause the body to release dopamine, a feel-good neurotransmitter, explains Charles Livingstone, of Monash University in Melbourne—“similar to the pattern occasioned by a cocaine addiction”.

Most Aussies dabble sensibly enough, but almost half of the money sunk into the pokies is spent by problem gamblers, often from poor areas. It is not difficult to make the case for change. In 2010 a government advisory body estimated that the social costs of gambling are at least A$4.7bn a year. Among other measures, it recommended reducing the amount a player can spend per spin to A$1 (the current maximum is A$10), and introducing mechanisms to allow gamblers to set limits on their losses.

Politicians have little appetite to see such measures through, however. State and territorial governments are responsible for regulating most forms of gambling. They rake in A$5.7bn a year in taxes from the industry—income that has been especially welcome as royalties from mining have fallen. The federal government could, in theory, intervene. But the gambling lobby derailed the most recent such attempt, in 2012, when it caricatured a proposal to oblige gamblers to set limits on their losses as requiring Australians to obtain a “licence to punt”.

The gambling industry says that it generates thousands of jobs and makes huge “social contributions”, including sponsoring sports teams and providing subsidised food in clubs such as the Revesby. “They do a hell of a lot of good work in places where the government is slow to act,” says one former MP. Yet the industry does not leave regulation to chance: it donates lavishly to both big political parties and to independent politicians. “This corrupts governance,” argues Andrew Wilkie, an independent MP who instigated the attempt at federal regulation in 2012. “No different from a bribe.”

This article appeared in the Asia section of the print edition under the headline "The biggest losers"

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