How pokies help the Australian economy

Australia is the country with the biggest loses per adult capita in the world. Studies say that approximately 80% of the adult population is involved in some sort of gambling or another. People are starting to put pressure on the government to deride pokies, as they say, they are addictive and make people lose lots and lots of money, including the young ones. It is because pokies are found in the most common places, here young people like to hand out, they say.

Surprisingly, pokies are also blamed for the poker addictions across the country. But are things really one sided? Pokie machines providers are fighting back, saying they help the Australian economy by infusing billions of dollars each year. We decided to look into this subject and see how things really are, looking at hard evidence facts and numbers.

Pokies history

The first pokie machine was invented by a mechanic in the United States and called it The Liberty Bell. It was 1895 and the man created this machine in order to pass his time. Interest grew from then to the entire United States to Europe, Asia and Africa. Things have come a long way from the first pokie machine to the classic 3 reels fruit machine and to the modern video pokie we know today.

Australia adopted pokies quite rapidly, but only in the early 2000s, they began to spread all over the country to take over bars and pub, hotel lobbies and especially brick and mortar casinos. Nowadays, you can find them in airports, grocery shops, malls and movie theatres all over the country and they are so prevalent, it is harder to find a location that does not have pokie machines.

An argument against pokies

Pokies are the main entertainment and present the interest of millions of Australians and we can understand why. The thrill of not knowing whether you will win or not, all the flashing light and colours, the music and the adrenaline rush whenever a win is landed. However, no matter how fun pokie machines can be, there are gamblers who become addicted. Australia has invested in social service programs and is the front line in dealing with such issues. But will it risk losing the huge revenue it gets from gambling and takes back all or most of the pokies spread around the continent?

One of the good sides of pokies

 Pokie machines providers and manufacturers argue that these machines add 9 billion dollars to the country’s economy each year. Even though each state has its own laws and taxes when it comes to pokie machines, the Australian economy is thriving countrywide, partly because of pokies. Experts show that tax revenue on the pokie machines goes over 5.5 billion each year and this capital injection is one of the main contributors for Australia’s social programs. Each state decides independently how this money is spent, but they are usually put to good use in the benefit of the locals in that particular area. What this means is that pokie machines tax money is used for hospitals, schools and social programs.

The manufacturers also say that the state governments are counting on the tax revenues to support their social budgets, while the revenue from pokie machines continues to rise. 1.09 billion will be the pokies machines tax revenue in 2019 in Victoria state, estimated to rise to 1.16 billion by 2021. The tax revenue has known the rise in the New South Wales county as well, from 1.5 billion to 1.8 billion dollars. Queensland is also expecting a rise, estimated at roughly 20 per cent, from 648 million to 819 million AUD. Numbers are quite clear, the state economies having a boost due to pokie machines tax incomes, and the entire country benefits.

Pokies in Tasmania

There are roughly 2.360 pokies machines in pubs and clubs across Tasmania and there were 110 million dollars losses between 2016 and 2017. Tasmania is said to be the Australian state which registers the biggest gambling losses.

There are 2 brick and mortar casinos in Tasmania and they are owned by the Farrell family, which also owns the licence for all the pokie machines found throughout the territory. The Farrell family holds the federal Group company which can decide where to locate the pokies machines in order to maximise their profits.

Vantage Hotel Group is a subsidiary to the Federal company, owning and operating 12 pubs, each having 30 pokies machines. A subsidiary of the Woolworths company called the Australian Leisure and Hospitality Group, operates in 5 other venues, each also having 30 pokies machines.

One of the gambling hotspots in Tasmania is Glenorchy, holding 6 venues. The pokies machines here make 1.6 times more money than the state’s average, meaning about 74.600 dollars for each pokie, whereas clubs and pubs across the state make only 46.500 dollars. It is also the highest figure in the entire country. Glenorchy registers a loss of 560 dollars per adult each year, compared to the Tasmanian state average of 272 dollars.

Unfortunately, Glenorchy and other areas are also considered low-income areas, reported to have a gambling situation due to their 1.1 per cent rate, while the Australian average sits at 0.6 per cent. It might seem that pokie machines in Australia are situated in the areas with economic and social struggle because gamblers find an escape mean in these games and in gambling, in general.

A recent survey regarding Tasmania’s gambling activity shows that 0.6 per cent of the state’s adult population is considered to have a gambling problem, whereas 1.4 per cent is considered to be moderate gamblers. The rest of the population involved in gambling is considered to be a low-risk category.

On the other hand, the Tasmanian government cashed in 31.2 million dollars from pokie machines taxes between 2016 and 2017, representing 3 per cent of the total state tax revenue. So, what would happen if the state would remove pokie from clubs and pubs? Would the money spent on gambling disappear?

The money we gamble comes from somewhere, mainly from our primary source of income. This money is generally redirected from other forms of entertainment and it provides the same level of economic benefit as would other activities, not associated with gambling.

Studies show that 1 million dollars expenditure in gambling provides 3.2 jobs, compared with liquor and other beverages sales which offer 8.3 jobs. 1 million dollars spent on food and meals sales generate 20 jobs. If pokie machines were to be removed from pubs and clubs, the establishments build around these games would probably have to close or reconsider their activity. Extending to a larger scale, so should companies which are involved in gambling, holding the pokies machines across the state.

There is a total of 343 pub licences in Tasmania and 89 of these have pokies machines. Out of the 197 licenced pubs in this state and only 3.6 per cent of these operate pokies machines. These operators will have to recognize their affairs by 2023 with the assistance of the government.

Pokies are highly entertaining and, in Tasmania’s case, they are also abundant. It is one of the main reasons a higher percentage of the state’s population is involved in gambling, compared to the statistics across the country. Because locals in Tasmania are used to gambling as being part of their lives, it is highly probable that they will engage in other forms of gambling if the pokies machines are removed from the state’s pubs and clubs. Most likely gamblers will turn to internationally licenced online gambling providers to satisfy their desires.

Pokies in Australia

Pokies machines loses in Australia increased between 1990 and 2000, while plateaued between 2000 and 2005. Since 2005, however, the losses per capita started reducing in various jurisdictions. Of course, this decline was registered differently in the Australian states.

One of the main contributors to this decrease in losses has been the tobacco control, meaning the smoking ban introduced across the country in 2000.

However, the Australian government has been seriously involved in responsible gambling throughout the country since 2018. It is implemented through a series of codes of practice which all Aussie casinos, clubs and pubs are required to adhere. Nowadays, most Australian states impose a maximum bet for pokies found in clubs or pubs, reaching 5 dollars. So far, this is the only restriction regarding pokie machines which are not found in casinos.