Poker machine reform shouldn’t be a game of populist policy

State Labor should be applauded for taking its time, says Greg Barns

EVIDENCE-

BASED policy formulation should not be rushed.

Too often politicians and political parties release policies that are clearly designed with popularity, rather than efficaciousness, in mind.

So it’s wrong to condemn Opposition Leader Rebecca White and the ALP for taking its time to deliver a considered position on the complex subject of gaming machines.

Ms White has been criticised by the Liberal Party and even the Greens for having not yet announced her party’s poker machine reform policy. The latter has a fairly simple approach, akin to prohibition. The former is stuck on the mindless mantra of saving jobs and investment, without of course considering the wider social ramifications of looking after its mates in the hotel lobby.

The ALP has consulted more than 70 organisations and individuals in its policy formulation stage.

This is a very good start because hopefully it lessens the impact of rent seeking that Federal Hotels and the Tasmanian Hotels Association has in this area of policy.

What to do about Tasmania’s gaming machines and their prevalence is not an easy subject with which to deal. The looming end to the Federal Hotels monopoly, the cross subsidy that these machines provide for some pubs (the revenue from gaming machines helps to prop up marginal or loss- making meals and drinks) and the need to balance personal liberty and the right of adults to make decisions for themselves without the paternalistic state directing them, are all in play here.

A well thought-out policy requires an examination of economic, social, and philosophical factors.

James Boyce, an historian who has recently written an excellent book on the history of the gaming machine industry in Tasmania, recently opined on these pages that “the politics on this issue are clear but change still relies on one of the major parties putting the interests and views of the public ahead of their party’s long-term patrons”.

He is right, and to do so requires a forensic examination of the current policy settings and how to ensure that the powerful interests which have captured Treasurer Peter Gutwein and other politicians over the years are brought to heel. There is some hope that the ALP might do so when it releases its policy.

When it comes to tobacco, sugar and greenhouse gases the most efficient form of regulation is through taxation. A tax can be set to change consumer and producer conduct and to ensure the revenue such taxes generate pays for the adverse consequences they cause. But when it comes to gaming machines, this model breaks down.

The imposition of a tax on gaming machines, to be paid by the licensee, would be passed onto the consumer. That is what happens with sugar and tobacco taxes.

But would it lessen the number of people using such machines or address the addiction that such machines generate for a small number of users? No. The consumer would still gamble and the

winnings might be less, but the machines are still there.

Nor is prohibition the answer — it never is. Just look at the absurd illicit drugs policy framework where prohibition has led to an increase in use and lucrative profits.

To ban gaming machines from Tasmania would simply send gambling underground — think illegal casinos such as those which existed in Sydney in the 1970s — and cheap flights would lure punters to Melbourne where Crown Casino awaits.

There is also the issue of investment and employment. It is the case some hotels have seen gaming machines as an easy source of revenue. Once installed the cost of running these machines is minimal. A visit to the gaming machine areas of hotels — a depressing and almost surreal experience — will tell you that.

It requires few staff to run this area. It is said that these machines help keep hotels, particularly in rural areas, alive. Whether this is true of not is not something that has been tested — we rely on selfinterested hotel owners and lobbyists to tell us this story. But let us assume for the moment it is the case that gaming machines enable hotels to provide drinks and meals for the local community, and that without gaming machines these hotels would go out of business.

One hates to sound clinical but one is tempted to say, so what. It is a poor business that relies too heavily on one source of revenue and which uses that source to crosssubsidise other parts of the business. The result is a lazy business where innovation and the generation of new ways to attract consumers comes a poor second to ensuring that the gaming area is full every night.

Yes, there might be casualties if some hotels no longer had poker machines, but public policy should not be about keeping marginal businesses in operation.

The long and short of it is that gaming machine policy reform is complex. The ALP should be commended for not rushing out a populist policy. It is a pity more politicians in Tasmania did not undertake the same policy review processes more often. Greg Barns is a human rights lawyer. He has advised state and federal Liberal governments.