Reviews new data about and progress in addressing problem gambling in Australia since the 1999 Productivity Commission Report. Finds that although considerable progress has been made since the original inquiry in regulatory and self-regulatory initiatives, it remains unclear whether problem gambling and its associated impacts have moderated. Expenditure has increased by 15 per cent between 1997-98 and 2001-02, although increases are slowing, and the share of gaming machine spending has increased. Finds that with increasing state dependency on gambling taxes, significant deficiencies remain in the regulatory environment for gambling. Recommends more research into consumer protection measures, better arrangements to ensure proper independence and transparency of research, effective monitoring and enforcement of industry compliance and further reforms of the regulatory regime to ensure substantive independence of the regulator.