Published: 01 March 2023

The state government's recently released Revised Estimates Report was expected to reveal the estimated effects of the new mandatory pre-commitment card to cap player losses that occur when moderate risk and problem gamblers play the pokies.

A fall in government revenue would indicate the likely fall in player losses - and be a welcome outcome.

Alas the Revised Estimates Report omitted the likely outcome of the proposed changes.

This underlines the difficulty venues are facing when trying to decide whether to apply for licences to own and operate their own machines from July 1 following the end of Federal Hotels' monopoly.

The nation's eyes are on Tasmania to gauge the effect of mandatory pre-commitment cards.

Even the government-owned Edgewater Hotel in Devonport, owned by TT Line, must be mulling over whether to proceed with poker machines. TT-Line's shareholder minister, Michael Ferguson, could easily, if he wished, join both the Hawthorn Football Club and the Devonport RSL in a future without pokies.

At the heart of the issue are the huge amounts problem gamblers contribute to the coffers of gambling operators. Leisure players and low risk gamblers help cover some of the industry's fixed costs but almost all the profits come from problem gamblers.

Over the years there have been five detailed Economic and Social Impact Studies into gambling in Tasmania. The data is overwhelming. Gambling patterns have been confirmed by numerous surveys. The latest 2021 study revealed that whilst non problem gamblers lose on average $20 per session, moderate risk gamblers lose $100 and problem gamblers lose $200. These are losses per session. The mandatory pre-commitment card aims to cap losses at $100 per day, $500 per month and $5000 per year. How it will reduce losses is not certain, but some industry estimates suggest the problem end of the gambling spectrum, which contributes 40 per cent of overall player losses, might have their losses cut by half, which would be an enormous boost to household budgets already under pressure from every other conceivable angle.

A reduction of this magnitude would mean overall revenue from pokies would reduce by 20 per cent, wiping away the expected but unwarranted windfall to pubs from the new gaming arrangements. The losses to state government revenue would be around $8 million from pubs and less than $2 million from the two casinos, the latter due to the much lower tax rates for casino machines.

Any losses by the government are unlikely to cause sleepless nights for the Treasurer. Essentially they will offset the modest revenue gains outlined in last May's budget of roughly $8 million a year estimated to flow from the new gambling arrangements before the mandatory pre-commitment card changes.

The government has not and never has been dependent on pokies revenue to the extent portrayed in the debate. Successive governments have allowed themselves to be held to ransom by the industry. At last, we may have found a reasonable solution.

Not so with the state's budgetary position. The Revised Estimates Report contains good and bad news. The good news is that expected GST receipts are much higher but that is due mainly to the increased pool of funds, now under threat by the RBA's aggressive interest rate rises, and the payment of a shortfall from previous years. It is not, as the Treasurer suggested, a reward for the government's hard work in growing the economy. The GST system doesn't reward states on that basis. The GST system assesses a state's disabilities vis-a-vis other states and splits the GST pool accordingly.

Further good news, an increase in payroll tax receipts, does indicate a growing economy. But this was more than offset by falls in expected receipts from conveyancing duties. This meant estimated own source revenues were revised downwards. That is the crux of our budgetary problem. What's worse is we show no inclination to do anything about it.

Overall, the state sector (including government businesses) will be running cash deficits of at least $1.5 billion per year for as long as the eye can see, yet the Treasurer chooses to characterise this as putting Tasmania "in a strong position to weather forecasted strong economic headwinds as well as allow us to continue to make strategic investments in cost of living relief, health, and housing for Tasmanians". Maybe but will those investments close the growing chasm between what's needed and what's being promised?

As with poker machines, reaching a common understanding of our problems is the first step. Without it there'll be no solutions.

The Advocate, Wednesday 1 March 2023


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