Tuesday, November 20, 2007

Technological options for limiting problem gambling get a whirl

In an earlier post I discussed the use of technological fixes to limit problem gambling. In The Age a proosal by Victorian Gaming Minister Tony Robinson is advanced to do just that. I’ve been pretty savage with the Victorian ALP’s approach to the gambling issue (here, here) so it is fair that I report positive efforts they are making to address the massive social problems the pokies have led to in this state.

Roughly Robinson’s proposal is that all poker machine players be issued with electronic cards to track their gambling levels and to monitor potential problem gambling issues. I quote:

Electronic access cards to track the movements of poker machine players could be introduced as part of a radical approach to tackle the state's gambling addiction problem.

Thousands of poker players could be required to carry the cards to gain entry to hundreds of clubs patrolled by problem-gambling experts looking for at-risk .....

Mr Robinson said the Government was in discussions with RSL Victoria about a membership swipe card system to be installed at hundreds of RSL venues next year.
Mark Johnson, the RSL's chief operations officer, said the new card system would alert clubs to the presence of players who fitted into the problem gambling category.

The swipe machines would have an interactive screen that could lead people to more information and help to tackle their addiction, he said.

Tattersals and the clubs say they will cooperate with the proposed measures if they are effective. I will believe that if John Howard increases his majority next Saturday by 10 seats.

I believe the best solution to the pokie crisis is to gradually phase them out. This proposed measure looks administratively complex and determined problem gamblers (a large proportion of the total) will find ways around it. One way of improving its application might be to allow users to sue the clubs and hotels for excessive losses – there might be a practical way of doing this.

The State Governments have unleashed a monster which they now need to bring to heel. The monster gives them lots of revenue and lots of high-profile jobs for ex-MPs – it is sometimes difficult to take their sincerity seriously.

Meanwhile in NSW pokie users who gain winnings will be forced to ‘take a break’ by leaving their machine rather than collecting their winnings from an attendant. The idea is that pokie addicts suffer from ‘within session’ behavioural addictions that can be broken if they leave their machines for any reason because they regain their critical faculties. In my view it is a close to worthless policy because its effects can be so easily thwarted and it only applies to winners.


Spiros said...

Got any bright ideas on how to replace the government revenue?

Until somebody does, the pokies arent going anyhere.

hc said...

A congestion tax on traffic on the major roads running into Melbourne along with corden pricing charges for entering Melbourne.

Generally green taxes will work to provide a better environment without targeting low-income polie players.

Spiros said...

Great idea on its merits, Harry, but very naive politically.

You see, the pokie players don't mind paying the tax or perhaps are unaware that they are paying a tax.

Whereas, those drivers will be extremely aware they are paying a tax.

Steve Edney said...

Seems similar to your ideas on smoking. Effectively make all users have to register and be tracked.

What can I say. Gambling addiction is a problem, but Mmst people playing don't have a problem they are happy spending some money for the thrill of a win. Perhaps we can tackle the problem without massive invasion of everyone's privacy?

Steve Edney said...

I'm wondering why you haven't yet called for all drinkers to be registered?

As I understand it this has a much higher social cost than gambling, and effects a higher proportion of the drinking population, and much higher proportion of the overall population.

hc said...

The post on smoking basically advocated the position of the US FDA that nicotine be treated as a pharmaceutical and be regulated as such. t of a packet of cigarettes for a male smoker of $222.

Smoking is massively personally harmful - see the recent post estimating the full social cos

It is dimension more socially harmful than alcohol and gambling. Harm from alcohol - e.g. traffic accidents - is often associated with the way it is consumed - hence I support heavy penalties for drink driving.

I am not necessarily supportive of control measures for gambling as they seem to be difficult to implement. I prefer to just drive the clubs that use machines to full cost price their services without machines and basically educate/legislate to get rid of machines entirely.

Yobbo said...

Fascism is also bad for your health.

rabee said...

Here's an idea. Make sure that all pokies are
fair games (expected return zero) and that each run
is independent of previous runs. Then setup interest free loans for gamblers to be used on pokies only on the same day.

Solved: so long as gamblers gamble frequently and for a long time.

You can even charge admission fees/tax to enter a Casino.

The problem Harry is that pokies are not fair games, and people on a losing streak can declare bankruptcy.

Yobbo said...

The other thing you could is simply deregulate pokies, so more competition would force venues to return a higher proportion of the money bet.

But that would be too simple.

hc said...

The difficulty with both Rabee's and Yobbo's suggestion is that gambling demands are quite price elastic - price being the expected loss.

Evidence of this is the takeoff of the casinos which offer better odds than lotteries and pokies.

A cut in price will be swamped by rising demands and I believe losses are worse than before.

I think that's right - its just the connection between marginal revenue and elasticity. If elasticity is less than -1 a cut in price increases revenue - here net losses.

Yobbo said...

"The difficulty with both Rabee's and Yobbo's suggestion is that gambling demands are quite price elastic - price being the expected loss.

Evidence of this is the takeoff of the casinos which offer better odds than lotteries and pokies."

Rubbish Harry.

That's pure speculation on your part and completely ignores the major reason behind the takeoff of casinos in the last few years - Poker's popularity as a sport.

If you think the elasticity is less than -1 please provide some actual proof.

hc said...

Sam, There is a fair bit of speculation - I don't have evidence. But the casios grabbed a lot of market share very fast.

And they do offer better-valued bets.

OK my guess is that gamblers are price sensitive - whether it is poker or blackjack.

kymbos said...

The Minister's on the right track, but heavily monitoring people and trying to intervene will not work. The solution is to use the 'smartcards' to require gamblers to set their own limits (daily, weekly and monthly). This is done outside of the gambling venue where gamblers are able to make a realistic choice. The evidence is that gamblers are aware of their budgets, but cannot control their behaviour while in front of a pokie.

Thus, if you want to gamble your family's monthly disposable income in a day, you still have the choice to do so but must make that choice before you start.

kymbos said...

By the way, it's hard to believe that problem gamblers can be all that price sensitive. If they were sensitive to price, they might choose a gambling passtime with a less certain chance of losing