Lizzie O'Shea: 'The consequences of problem gambling far outweigh the revenue obtained'

February 6, 2023
Slot machine graphic
Clubs and casinos can make profiles of individual gamblers and use them to advance the person’s addiction. Graphic: Green Left

Suzanne James asked digital rights activist and author Lizzie O’Shea about her views on gambling reform on the recent Green Left show

In your New York Times article, “Australia has a serious gambling problem,” in November 2016, you outlined how the game is rigged against the gambler and argued for harm minimisation, rather than getting rid of the pokies completely. Define “harm minimisation” for us.

The frame of harm minimisation is often used as an alternative to criminalisation in relation to things like drugs and alcohol. I think there’s a similar similarly useful approach in treating and understanding gambling addiction as a health problem, rather than something that is specifically about personal responsibility or willpower or bad behaviour, or bad apples that therefore need to be criminalised and dealt with as a police matter or a justice matter.

What motivates that kind of language that gambling addiction is a health issue it has all sorts of ongoing consequences socially, beyond just the person who might be addicted.

We need to find ways to minimise the harm that’s caused by gambling. Banning it suggests that then there would be some kind of criminalisation of continued gambling. That seems like a poor use of resources. Instead, we need to focus on phasing out, as much as possible, these addictive forms of gambling in much the same way that cigarettes aren’t banned, but we are doing everything we can to minimise the impact of that industry.

If you treat it as a health problem, over time you could see a situation where you know cigarettes are prescribed to someone who gradually reduces their addiction rather than not able to be sold at all and therefore people who might be addicted resorting to criminal behaviour.

There is a huge amount that can be done by government to minimise the harmful aspects of certain kinds of gambling particularly poker machine gambling.

Poker machine gambling accounts for around a half of all the gambling spend. Increasingly, sports betting is taking up a larger portion of all the gambling spend in Australia.

Other kinds of gambling are less addictive, because there’s more breaks in play, there’s less of an engagement with the machine. Horse racing or lotteries are less addictive, although they do have their own problems.

Gambling on poker machines is described as the “crack cocaine” of gambling, because of the nature of how these machines are designed with the dynamic created between the individual and the machine.

You can reprogram the machine; you can restrict how many are available you; can also impose obligations on venues who host those machines; but you can also just get rid of them.

This brings in a variety of social issues: the primary one is that that governments themselves tend to be addicted to the revenue. They take in a huge amount of dollars from poker machine venues — upwards of $1 billion in NSW, Victoria and Queensland each, per annum.

Then there’s the social infrastructure that exists alongside it. For a long time, NSW has had a lot of social infrastructure which claims it’s dependent of gambling revenue from sports clubs and social clubs.

Pubs and clubs in NSW claim that their social infrastructure is unsustainable without gambling. But Western Australia has no poker machines, outside of the casino and they manage just fine in terms of having sports clubs and the like.

Still too many politicians accept that argument from lobbying groups and clubs. ClubsNSW is a powerful lobbying organisation and it seeks to protect its interests. There’s a reason that nearly a fifth of the world’s poker machines are in NSW. It’s really the biggest place that you can go to gamble after Las Vegas.

It is a shocking statistic and we really do need to change that, but you can imagine the kind of political forces that are on the side of continuing the status quo.

Politicians are increasingly starting to click that there’s a false economy, because the costs associated with gambling are so high so any revenue they obtain is really robbing Peter to pay Paul.

The consequences of problem gambling far outweigh any revenue that they obtain. As people watch their children become inculcated into a culture of gambling, particularly as sports betting becomes more prominent in people’s daily experience of watching sport, increasingly, you can see that its time up on gambling being an acceptable part of life (even in NSW).

I've been following this for upwards of 10 years and the change is remarkable in terms of people’s interest. We’ve made significant gains from when this was on the national agenda under [former Labor Prime Minister] Julia Gillard. Andrew Wilkie was involved in the big anti-gambling campaign. We are on the precipice of significant change, even in NSW.

Video: Online privacy, digital surveillance and gambling reform with Lizzie O'Shea | Green Left Show #32 - Green Left.

Your New York Times article referred to what you called the “hoary” line that gamblers should take personal responsibility — a big push by the gambling industry. You also talk about the massive costs that gamblers inflict on their families and the wider community. Where do you draw the line in between state intervention and personal responsibility?

This is something leftists have to grapple with because, of course, we want the government to stay out of our business and allow us a form of autonomy, but we also want it to protect us against certain things — consumer rights being an obvious example.

In my book Future Histories, I talk about this in the context of car safety. Ralph Nader, in the United States, was a big advocate for reforms to car safety measures and regulating the car industry.

There are estimates that he saved millions of lives because in an unregulated setting people were just dying completely unnecessarily. We are able to draw a line: I think there is a role to play for government in enforcing safety of products for consumer protection.

There’s a lot of important work to be done in asking government to do better at curbing the excesses of capitalists, who seek to make products that are addictive or dangerous and seek to socialise the harms while privatising the gains.

It’s not contradictory to say that you want the government to respect your rights, in terms of how it deals with personal information, or take the approach of keeping you safe in a criminal setting.

But the criminalisation of individuals is a different matter: we’ve seen a grossly over-inflated surveillance state that needs to be pulled back.

We need to have greater rights’ protections for individuals. This is something that we’ve been struggling with for upwards of 150 years. What is the role of the state? Is it there to protect people? But where does that stop?

It’s legitimate demand that, in a capitalist economy, people who make dangerous products be held accountable and be made to stop doing it.

At the same time, the government shouldn’t be able to control our autonomy as citizens.

We need to have a robust protection of rights in which people have the right to participate in society without being constantly surveilled.

I understand that there’s a tension there. There are no particularly easy answers at a theoretical level. But, in practice, there’s still a lot we can do in here and now to advocate in non-contradictory ways both of those of those arguments.

In a world in which a former Commonwealth Bank of Australia chief was given no penalty after having been found by the royal commission to have presided over about 47,000 counts of cash money laundering, how do you have hope for the future?

The law is used by the rich and powerful for protection and then enforced against the poor. That’s absolutely true. But consumer rights law, environmental protection laws, work safety laws, these  are all things working people have agitated for and social movements have won.

That puts them in a slightly different category to criminal justice laws that have been expanding continuously, directed at disenfranchised, disadvantaged people as a way of managing social class and category for the last 200 years or so. Those things are not the same.

It’s worth thinking about the origins of some of these laws as a way of understanding their utility or assessing their political significance.

As a long-term advocate for gambling reform, what are your thoughts about the cashless gaming trial in western Newcastle? Isn’t that just helping the club collect more data, a predatory marketer’s dream?

Most NSW clubs oppose cashless gambling because they see it as a threat to their business model, a threat to revenue from gambling. The research suggests that breaks in play with poker machine gambling are what tends to reduce people’s total spend.

Part of the addiction with gambling is staying in what’s called “the zone”. Just staying there, constantly draining your funds until you essentially blow out the amount you’ve got available.

The card is an example of creating friction, slowing down play, requiring people to take a break and set maximum spends. It does impact the addictive business model: that’s a reason why ClubsNSW is opposing cashless gambling.

But also there’s some utility in understanding how you could reduce the impacts of problem gambling, particularly for the most addicted in society, which does account for a very large amount of spend.

The Productivity Commission did a report on this a few years ago. It found that anywhere between 40–60% of all revenue taken from poker machines is from problem gamblers. If you include people who are at risk of developing a problem, the amount is pushing towards 80%.

There’s a small amount that’s taken from lots of people, who play them without difficulties associated with addiction. But there’s a large amount of revenue that’s coming from people who are addicted, or who are at risk of becoming addicted.

We have to target this if we’re going to come to terms with this problem.

There are a couple of different reasons why this has been proposed. First, it would resolve the problem of money laundering.

We know that there's a huge amount of money laundering that goes on in casinos. This is something that’s come out in the various royal commissions.

The way that these casinos are operated allows this kind of money laundering. Here’s an example of a program that would arrest that and not permit money laundering through casinos and clubs, and that would be a good thing.

The secondary argument is that it does allow a profile to be created — but clubs already do this. They already have serious customer surveillance and know a lot about the people who use their venues.

Transparent financial information also creates an obligation on clubs to perhaps intervene and take their self-exclusion responsibilities and setting caps for spending a lot more seriously. It’s much more difficult to turn a blind eye once you have that financial information.

These clubs and casinos can make profiles of individual gamblers and use them to advance the person’s addiction. They can also claim that they didn’t necessarily know that their funds may have been misappropriated, or the person may be spending beyond what they had stated they wanted to under the self-exclusion regime.

There is a responsibility that comes with that financial transparency.

It is a step forward, partly because the way gambling is run, particularly in NSW. It is so harmful and devoid of significant regulation that limits those harms.

There is plenty more that could be done, particularly around machine design, that could significantly improve the experience of people who are addicted to gambling and people who experience the consequences.

There is an argument for a reform like this.

[This piece is from a longer interview Suzanne James did with Lizzie O’Shea for the Green Left show.]

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