Risky business: Why the Commonwealth needs to take over gambling regulation

Abstract

This is a policy paper based on an overview of the national and international evidence of the harmful impacts of gambling and a critique of current approaches to gambling governance and regulation in Australia. Gambling is licensed and regulated at state level. State and Territory governments are heavily dependent on gambling taxes, and perhaps unsurprisingly, have shown little interest in implementing appropriate reforms to protect their citizens from gambling-related harms. After two decades of exponential growth of the gambling industry in Australia, there is wide recognition of gambling-related harms and negative consequences for individuals, families and communities. The Australian Productivity Commission {(PC)} reported on the industry in 1999 and again ten years later, in 2009. They released their draft final report, in October 2009; and their final report on July 23, 2010. While the Productivity Commission's 2010 report presents valuable data on gambling and makes some strident recommendations, it is not clear on the principles and governance system that should underpin a national public health and consumer protection approach to gambling – and its implementation. The Productivity Commission is strong on problem identification but weak on an integrated national regulatory approach to remedying the problems caused by gambling and the actions needed to address State Governments' dependence on gambling taxes. Some of the {PC} recommendations such as legalising online poker games and exempting online gambling providers from bans on credit card use, lack an adequate evidence base and pose a grave risk to players. This paper critiques the prevailing addictions/informed choice model, which dominates current government and industry approaches to gambling policy. Constructing 'the problem' in terms of harm minimisation (as in the Productivity Commission's terms of reference), side-steps the key issue of the mounting impact of gambling; and in particular, electronic gaming machines and casinos. It is argued the Commonwealth needs to lead on an integrated National Action Plan on Gambling, that is squarely based on a risk and prevention strategy with new policies, institutions and financial incentives to the States and Territories. Essentially, the Commonwealth government needs to lead on gambling reregulation. The proposed National Action Plan for Gambling Governance and Regulation outlined in this report is a whole-of-system public health approach that incorporates as crucial elements: national consumer protection product safety/regulation; national 'license to operate' venue responsibilities; industry obligations (host responsibility and duty of care); national regulatory oversight (data monitoring); independent research (integrity); evidence based policy; and national independent audit/monitoring of policy and venue-level interventions. A reform agenda to wean the states off their reliance on gambling taxes needs to offer incentives. To fund these new initiatives we propose (i) a revenue-neutral reform agenda funded from a new 2 percent 'super-profits tax' on the gambling industry and (ii) establishment of a new National Lottery Commission. In its final report, The Productivity Commission (2010, p. 2) recognises that properly regulated, lotteries are the least harmful form of gambling. In the short term, this fund would then be used to give incentives to the {States/Territories} (via the Commonwealth Grants Commission) to wind back their dependence on gambling taxes. In the longer term, a National Lottery Fund could finance heritage, parks, and other sustainability and community building initiatives. This paper has been written to inform public debate on a new direction for a national approach to gambling policy and calls on the Commonwealth to take over gambling regulation.

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