GAMING MACHINES (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 29 October 2010.)

The Hon. R.I. LUCAS (17:10): I rise to speak to the second reading of this bill and indicate at the outset that I intend to seek leave to conclude my remarks. I will outline the reasons for that later on in my contribution.

It is a sad fact of life that, having been in this chamber for the duration of the debate since 1992ish, I have spoken many times on gaming machines, and every aspect of this particular debate has been canvassed in one form or another, I suspect, previously. Certainly, when the honourable Mr Xenophon was here, many of the issues were canvassed by him in innumerable private members' motions or bills that he moved in this chamber.

I want to say at the outset that I outline my general position regarding gaming machines as I did on one previous occasion, I think six or seven years ago, when we debated the 3,000 cut in the number of gaming machines trumpeted by the still Premier—for the moment anyway—Mr Rann. I said then, and I say it again today, that in 1992 I supported the introduction of gaming machines in South Australia, and I indicate again that I support the option of gaming machines in this state. If the vote was to be had again today in relation to whether or not they should be introduced, my vote would be exactly the same now as it was in 1992.

My view has been that I acknowledge very strongly, as I think everyone does, that a small number of people in South Australia—1 or 2 per cent is the estimate—are problem gamblers, and not just problem gamblers in relation to poker machines: they are problem gamblers in relation to either this form of gambling or indeed some other form. However, 98 or 99 per cent of people who use gaming machines do so happily without any damage to themselves, their families, their friends or their acquaintances. They enjoy the recreation of investing their money in gaming machines.

I know that the forelock tuggers, the politically correct, take the view that no-one should stand up and defend the industry, gaming machines or the option of those who want to gamble to be able to gamble, or indeed be seen in any way to have the same view as the view of those the Premier would refer to as the 'pokie barons' in South Australia. I do note that he himself supported the introduction of gaming machines in South Australia. So, I do not remove myself or cringe at the notion that I supported gaming machines in South Australia and continue to do so.

Those 98 or 99 per cent who do invest their money in gaming machines without being problem gamblers are making conscious decisions to spend their money in the way that they so choose. In exactly the same way that I might choose to spend $50 or $100, or whatever it is, to go to a restaurant, or someone spends $50 or $100 dollars to take themselves and their family to the Crows to see a football game, or to go and see the Sixers play basketball, or whatever it might be, it is a conscious decision by them. There are those in the community who spend $170 to go to the Big Day Out as a form of recreation, particularly many of our young in the community.

They are the conscious decisions of young people, or others, to spend their dollars in the way that they so choose which gives them pleasure and enjoyment. In my view, there is nothing wrong with that. If somebody chooses to spend their money, whether it be on a gaming machine or on sports betting, which I will speak to in a moment, or on any other form of gambling, that is a decision for them. The concern is for the 1 or 2 per cent who are problem gamblers, who create problems not only for themselves but their families, friends and acquaintances as a result of not being able to manage their gambling problem.

The media, of course, feed on this, together with the views of some members of parliament. Every few months, we see massive losses on gaming machines being incurred by individuals or those in the community. It is indeed correct to say that they are losses but, in the same way, as I said, if someone who is not having a problem with gambling decides to spend $50 of their money on a gambling pursuit such as a gaming machine, equally that person, if they do not have an addiction, can spend that same $50 on going to the football or cricket, or going to a concert or whatever it might happen to be.

In the end, they still do not have the $50. In the end, they have had a recreational pursuit for a number of hours. In the end, they have enjoyed it, but it is their decision as to how they spend their money, in my humble view. But, of course, we do not portray the millions that are spent on concerts, or going to the football, cricket or whatever else it might happen to be, as losses. It therefore does not translate into headlines in newspapers and, of course, with politicians and others, particularly from the self-titled concerned sector—that is now the jargon that is being used by many within the industry.

I must note a leading spokesperson from the hotel industry on one occasion referred jokingly to this notion that the welfare sector had labelled themselves as the concerned sector, and said that what we have in South Australia is the concerned sector and the very bloody concerned sector, referring to the hotel industry and the impact of some of the proposed changes from those in the so-called concerned sector on the hotel, tourism and hospitality industries.

So, I do not subscribe to the view that the only people concerned about this issue are those self-titled in the welfare sector who take upon themselves the title of the concerned sector in some way, so that we have the goodies in one corner, which are the concerned sector, and the baddies in the other corner, labelled by the Premier and others as pokie barons, wearing the black hat, as opposed to those in the welfare sector who are wearing the white hat.

There are people of good intentions on both sides of this particular debate and argument, and I think it would be sensible to listen to sensible people on both sides of the argument. Certainly, on this issue, it is important not just to accept one side of the argument on all occasions.

Later on in my contribution I will refer to the fact that, whilst I am an open supporter of gaming machines in South Australia, I do not always agree with the positions of the hotel industry. One example I will refer to later is the fearful lobby we had back in 2004 to support putting a $50,000 cap on the value of gaming machines. That was strongly supported by the AHA and other industry advocates at the time. As I will refer to later, that was enough to convince some people to support what I believed and argued at the time was very bad policy and I strongly opposed it.

I only give that as an example for those who might say that, because I take the view that gaming machines are a valid option and one which should be supported by those prepared not to be amongst the politically correct in this community and to stand up and speak out, on occasions we will be labelled as being in the pockets of the hotel industry.

As I will outline later on, whilst on most occasions I probably have agreed with the hotel industry on some key issues such as, in particular, the $50,000 cap on the value of gaming machines—which is now one of the reasons why we have this legislation before us—I strongly opposed the views of the hotel industry at that particular time. As I said, I will talk about that later on in my contribution.

I wanted to make those introductory remarks in relation to this because I think this has, for too long, been a one-sided debate. It is just so easy for everyone to line up to belt hell out of those in the industry who have provided options through gaming machines. There is very little ever talked about in relation to the massive increase in investment that has occurred within the hotel and hospitality industry in South Australia in the last almost 20 years as a result of a decision that was taken back in 1992.

Whilst I accept and continue to accept that there needs to be ongoing debate about how we tackle the 1 to 2 per cent of people who are problem gamblers in South Australia, too often in the past—and, again, I think we see it in this particular legislation—we see tokenism from the government and from the parliament in relation to being seen to be doing something about problem gamblers. In many cases the decisions that have been taken will have no impact on problem gamblers at all.

The next issue I want to address at the outset is that of the ability of members to vote according to their conscience on gambling issues. It would appear that Liberal members and minor party and Independent members in both houses of parliament will have a conscience vote on these issues. However, as I understand it, the government has, on this occasion, decided that there will be no conscience vote for its members.

One of the problems with the Premier and the government is that they think that people have very short memories and cannot remember as far back as just six years ago and February 2004. A press release issued by the Hon. Mr Rann and the Hon. Mr Weatherill of 16 February 2004 stated:

Rann calls for reduction of poker machines by 3,000. Premier Mike Rann has today taken the challenge up to every MP to support legislation to be introduced into parliament that will result in 3,000 poker machines being taken out of pubs and clubs across the state.

I will return to the release later on, but in that case he states:

It is on that basis that I am supporting this legislation; it will be a conscience vote of the parliament.

The Premier was pursued by the media on this issue of a conscience vote. An article by Leanne Craig in The Advertiser on 17 February, under the heading '3,000 pokies to be axed', states:

Mr Rann said the existing freeze on poker machine numbers, due to expire on May 31, would be extended to cover the transition period before changes were made. 'I'm extending the freeze and then I'm going to rip out 3,000 machines out of the system and I'm confident of getting support on that from members of parliament,' Mr Rann said.

He said poker machines had been a conscience issue 'for time immemorial' and making it a vote along party lines would have necessitated changes to Labor Party rules. 'I'll be speaking individually to every MP—Labor, Liberal and Independent—urging them to support my position,' Mr Rann said.

This is the Premier, in 2004, saying that poker machines for the Labor Party 'for time immemorial' had been a conscience issue and that making it a vote along party lines 'would have necessitated changes to Labor Party rules'.

My question to the minister handling the bill in this place is that, given the Premier's statement that this is a conscience issue for time immemorial—the issue of poker machines—and that, for it to be a party vote, there would have to be changes to Labor Party rules, what has actually occurred between 2004 and 2010? My sources within the Labor Party indicate that they are unaware of any changes to Labor Party rules.

It is fair to say that there are not too many sources within the Labor Party these days who are openly or privately supportive of the current Premier and who are happily preparing for a transition to—

The PRESIDENT: The Hon. Mr Lucas should stick to the bill.

The Hon. R.I. LUCAS: I am, Mr President, and I am asking this question whether or not this is a conscience vote for Labor members. Indeed, Mr President, as one of the senior statespersons of the Labor Party and someone who, for example, would have an interest in this issue, you may be well aware of the situation, but we on this side of the chamber would be interested to know what, if anything, has actually changed in the last six years. Or, Mr President, did the Premier not tell the truth in 2004 in relation to the issue of conscience votes for Labor Party members on gaming machines or pokies legislation?

There are certainly widely differing views within the Labor Party on the issue of gaming machines and the appropriate way of tackling problem gambling; yet, if it is a party vote, those wildly differing views will not be able to be expressed in the parliament, whereas in the Liberal Party you will see wildly differing views on gaming machines from those expressed by people like myself, supporting gaming machines, to those expressed by others who have an opposite view.

Members interjecting:

The Hon. R.I. LUCAS: I will not take up the challenge being thrown to me by my colleagues. We have wildly differing views and we are prepared to acknowledge those views and respect the differing positions that members might put, and we can argue the case as best we see it. I think that is an important issue as we countenance whether or not we are going to get sensible legislation on gaming machine matters.

The next point I address again comes back to this issue of problem gamblers and gaming machines; that is, in relation to problem gamblers, the entire focus seems to be on the issues of gaming machines, the pokie barons and attacking gaming machines, yet there seems to be some blissful ignorance from many in the community as to what is going on in the real world in relation to gambling issues at the moment. I turn to the issue of sports betting at the moment. One of the reasons for seeking leave to conclude is that I am still trying to get some further information on the massive growth in sports betting not only in South Australia but in Australia as well, and not just sports betting but gambling options such as online poker, for example.

I want to outline some of the options and the ease of those options for people in the community as opposed to the massive controls and the focus that we have on gaming machines in certain specified establishments. Members in this chamber who have an iPhone can download an application from any number of gambling providers such as Sportsbet, and using their iPhone and that app they can join or register with an online gambling provider, and as they sit here in this chamber they can happily online bet on any number of sports betting options whether it be football, cricket or tennis. For instance, the options that we have seen in relation to one-day cricket scandals overseas of whether or not a Pakistani bowler is going to bowl a no ball on the sixth ball of a particular over.

Extraordinary options in terms of betting are currently available and all of them available from your iPhone as you sit in this chamber, your office or in the privacy of your home. All those massive betting and gambling options are currently available and are growing at a massive rate.

Of course, the focus of the concerned sector, politicians, the media and others is on the pokie barons, the people who are acting under the legislation passed by this parliament (or previous versions of this parliament) in distinct locations and being governed by rules and regulations that apply to those particular establishments. At the same time, we have this massive explosion in gambling opportunities going on around us. As I said, I think many people are just blissfully unaware.

You can certainly sit at home and do it through your computer. You can have it transferred through your wide-screen at home in terms of racing and various other options, or, as I said, you can do it through your iPhone app in the privacy of where you happen to be at any time. At the same time through your iPhone, you can sign up to any number of online poker games throughout Australia or around the world. On your iPhone, you can just sign up to any online poker game and play the game around the world with anyone you want.

With these options, certainly with the online poker games that are available and others—and certainly a number of the gambling sites as well, I understand—you can bet not only the money that you put into your account but you can transfer money from a credit card into your gambling account with the betting agency, the online poker school or whatever it happens to be, and, at the same time, you can bet using your savings account equivalent or your credit account equivalent as well. That is the real world.

In outlining just some of those options, I do not do so on the basis of saying that therefore we should not do anything about poker machines or gaming machines. What I am trying to argue in this place is that, for once, let's get a bit of balance into this whole debate. As I have said, and I will return to this again in a moment, in relation to some of the tokenism we have seen on some of the supposed changes which are supposed to assist problem gamblers in hotels, clubs and the casino in South Australia as it relates to gaming machines, it is just that: tokenism.

What we have to do is tackle the problem of the 1 or 2 per cent who are problem gamblers. If we are going to have problem gamblers as a result of online poker, gaming machines, sports betting, the races or the dogs, or whatever it is, we need to be providing more and more counselling and more and more targeted assistance for those people, however we can identify them.

To have this focus almost completely on the pokie barons and the gaming machine establishments, I think misses the reality of what is going on in gambling in South Australia. As we know, more and more young people of school age are playing online poker. With ESPN and various other pay TV-provided options, the popularity of poker in terms of the ratings of those shows is just enormous. The interest of many, many young people is not in the traditional forms of gambling, such as pokie machines, the horses and the races, but in the newer forms of gambling, such as online poker and sports betting (exotic sports betting, in particular) through their iPhone apps and others. That is where all of this has headed—it is happening now—in relation to the issues.

So, whatever the form of gambling addiction, the target has to be to somehow provide more assistance to the 1 or 2 per cent and leave alone the 98 per cent who have made a conscious decision to invest their hard-earned money in whatever recreational pursuit it is they have chosen to follow.

We are going to see not only this debate now but also, as a result of the federal government having to do deals with gambling-oriented Independents at the national level, the impact of some of those potential changes in South Australia—commitments the Prime Minister has given various Independents at the national level to use federal powers to impose their views on gambling on the states because they do not mirror the deals that have been done with the Independents at the national level, and threats to apply the corporations powers at the state level.

If they choose to do that, there are a number of innovative ways in which business proprietors in the state are already looking at to prepare themselves to ensure they are beyond the purview of corporations powers, and it will still be an issue for state legislators such as us.

In relation to the issue of the tokenism of some of the changes that have been made, if we go back to one of the reasons we have this legislation before us, we see that it was the chest thumping and tub thumping by premier Rann on 16 February 2004 and afterwards about the government being seen to be doing something about cutting gaming machine numbers in South Australia and there was a commitment to cut by 3,000 the number of gaming machines in South Australia from approximately 15,000 to 12,000.

As I argued at the time, and I repeat the argument today, there was precious little evidence given by premier Rann or the supporters that the 3,000 cut would do anything in relation to reducing problem gambling in South Australia. At the time, I spoke against the second reading and said that I opposed the bill; I believed it to be political tokenism, and I still think that is the case.

At that time, we quoted the Treasury estimates in 2004 of future gaming machine revenue. The parliamentary debates in 2004 show that Treasury was predicting that gaming machine revenue would continue to increase even with the passage of the legislation to cut gaming machine numbers by 3,000, and that the only significant decline would potentially occur in 2007-08 when the impact of the smoking bans was felt in hotels and clubs in South Australia.

When I next speak on the bill I hope to have the actual gaming machine collections compared with the estimates that were done in 2004-05 to incorporate in Hansard to indicate what the practical impact was. What I have been provided with in the interim, and I seek to leave to have this inserted in Hansard without my reading it, is a purely statistical table on monthly gaming machine net gambling revenue in millions of dollars.

Leave granted.

Monthly Gaming Machine NGR in $millions

post smoking ban

source: OLGC/IGC

The Hon. R.I. LUCAS:Hansard will not show up the highlights in colour, but it shows, on a monthly basis since 2002-03, gaming machine net gambling revenue in millions of dollars. The first month post the smoking ban is November 2007. If one looks at the month of July from 2004-05, which was just before the passage of this legislation, the monthly gaming revenue shows $66.8 million, $63.5 million in 2005-06, $67.2 million in 2006-07, and $71.8 million in 2007-08. For the months of July, August, September and October, they all show the maintenance of NGR or, indeed, the increase of NGR.

It was only when the smoking bans came in in November 2007 that, from October, it dropped from $72.1 million down to $59.7 million and then stabilised in the 50s and 60s for the rest of that particular year. The table will show that the monthly NGRs have slowly increased again but are now still a little below the level existing before the introduction of the smoking ban.

The table shows that the passage of the cut in the number of gaming machines, as it turned out, at around 2,200, or not quite the 3,000, had virtually no impact at all on NGR, or gaming machine revenue, being collected by the state of South Australia, as many of us highlighted at the time. For example, in the hotels with 40 machines that ended up with 32 machines, those machines were generating as much revenue as the 40 were generating originally.

Only in very few establishments with 40 machines will all those machines be used, and the 32 machines were generating the same revenue as, or more than, the 40 machines. The Premier knew that, and those who were supporting the cut knew that, because that was the professional advice given at the time from Treasury and others.

However, political tokenism meant that they had to be seen to be doing something. It guaranteed a headline for the Premier and government before the 2006 election, and those who doubted whether it would work would not be proved correct until years later, certainly after the 2006 election, and of course that was all that worried the Premier and those who were supporting him.

So we had this massive over-promising and massive under-deliverance of the objectives of the legislation by the Premier and the government. A significant part of that whole debate was this issue of whether or not there should be a cap on the value of the gaming machines in terms of their sale. The then minister handling the bill, the Hon. Mr Wright, back in 2004 said that the initial discussions and proposals for the operation of the gaming machine entitlement trading market focused on an open market option approach. Then he indicated that the government had changed its position, so it introduced a bill with an open market trading option in it.

Then it introduced amendments to its own legislation because the AHA and others convinced the government that there should be a $50,000 cap or fixed price put on the trading of gaming machines. The government said (and Mr Wright was representing the government) that this new process with the $50,000 cap was a sensible way to go, would provide greater equity, would make the trading process simpler, and was a sensible way to approach the trading market. A very strong case had been made by the Hotels Association and the welfare sector supported this. Then he said, 'So I think members can be confident that this will work.' He went on to say:

It makes it simpler and it is a good thing. Members can be confident that it will provide not only certainty but also incentive, which is important for those thinking of trading out, so that we can get fewer venues. I recommend this to members with some confidence.

That was the Rann government's position in relation to the $50,000 cap.

As some will remember, I argued in this chamber that that was an absurdity. It made no sense at all. Anyone who understands the operations of the private sector realised at that time that, if you own a gaming machine licence which in other states was selling for $100,000 or $150,000—in some rare cases up to $200,000—why would you sell a gaming machine entitlement for $50,000? It made no sense at all. That was indeed what happened, and for the last six years we have had a situation where the government, the Premier, has been unable to deliver on his 3,000 cut commitment because the reality of the private sector, the industry, was that no one was prepared to sell at the $50,000 limit.

In 2004 in this chamber I moved an amendment in committee to, in essence, get rid of the $50,000 cap and return it to the original intention, namely, to get rid of the $50,000 cap and have an open market trade for gaming machines and their value. The Hansard shows that that amendment was defeated 12 to seven. I note that it is probably not a good sign that of the eight members (with the pair) who voted for that bill, there is only one member still left in this chamber, and that is me.

The other seven members who voted for the legislation have all either been defeated or retired, or have left this chamber for a variety of reasons. It was one rare occasion, which I think horrified the Hon. Mr Xenophon; when he voted with me on a gaming machine matter and supported me on this issue, because he recognised the reality that the $50,000 cap was not going to work and would not achieve the 3,000 cut in gaming machine entitlements.

I note that, whilst I am the only member of the eight left in this chamber, the survival rate for those who opposed my amendment was much better: nine out of 13. Nine out of 13 still remain in this chamber today, so there is obviously a lesson there, that supporting me and my amendments is not good for your political survival. Opposing my amendment was obviously good for political survival.

There was a long debate on that particular occasion and, as I said, the numbers were relatively close, a vote of 13 to nine. It would only have required three members to change their position on it to have defeated that provision in 2004. But, of course, the legislation that we have now, finally, after six years and two elections, recognises the absurdity of the proposition that was being put, recognises the reality of the situation and gets rid of the $50,000 cap. I seek leave to conclude my remarks later.

Leave granted; debate adjourned.