Pokies are a ruling class con

It’s no secret that poker machines are rigged. What appears on the surface as pure chance is in fact a complex algorithm that ensures player losses always exceed wins eventually.

What’s not as well known is just how far the scam extends.

New South Wales has the highest density of pokies in the world outside of dedicated gambling destinations such as Las Vegas, according to a report released by the Gaming Technologies Association. And they are disproportionately concentrated in poorer, working class suburbs. The result is a massive upward transfer of wealth from the poorest to the richest sections of society.

Research by investigative journalist Michael West found that the Sydney suburb with the highest average poker machine losses in 2016-17 was Fairfield in the western suburbs, at $5,668 per household. The suburb with the lowest household losses was the wealthy Ku-ring-gai district on Sydney’s North Shore, at $22.50 per year. For every dollar lost to the pokies in Ku-ring-gai, $252 was lost in Fairfield.

This is only the most extreme example of a general trend. According to a report in the Sydney Morning Herald, nine of the top 10 NSW clubs ranked by total pokies profits are in western Sydney, where incomes are lower and unemployment is higher.

Most pokies profits in these areas come through registered clubs – establishments promoted as the heart and soul of communities. They provide jobs, entertainment, funding for various community projects, and they even sponsor the local footy team.

Yet at a major club such as Dooley’s Lidcombe Catholic Club, the amount of poker machine losses per member was about 38 times more than the amount spent per member on “community services” over a nine-year period, West found. In reality, community funding is just a part of their PR budget.

With more than 60 percent of their revenues coming from pokies, the big clubs in NSW are glorified casinos. And of these revenues, 20 percent comes from those with a moderate gambling problem and 42 percent from individuals with a serious addiction, according to Monash University gambling researcher Charles Livingstone.

Yet the current regulatory focus is on behavioural change and education, essentially shifting the burden from venues to players. That addiction and structural inequality are rooted in the exploitative nature of the gambling industry is ignored.

New poker machine regulations introduced by the NSW government in March were supposedly designed to minimise gambling harm by preventing the introduction of more machines into “high risk” areas.

But the first analysis of poker machine profits in NSW since the regulations were introduced forecast growth of 12 percent over the next four years. According to Livingstone, small reductions in the number of machines have practically no effect because NSW already has so many pokies that they are hardly ever all being played at once.

When it comes to regulation of the pokies industry, the state government knows on which side its bread is buttered. Records obtained by the Herald show that pokies accounted for $776 million of taxes last year, up from $414 million in 2003. 

Businesses involved in gambling, alcohol and tobacco are banned from donating to political parties. But ClubsNSW, an industry lobby group, donated more than $420,000 to the Liberals, Nationals and Labor. Registered clubs are exempt because, absurdly, they are officially non-profit organisations.

Commenting on the latest regulations, a ClubsNSW spokesperson said that the changes balance the need to reduce problem gambling while also “ensuring the viability of the state’s clubs”. 

In reality, it is only the latter concern that matters to those in power. The devastating economic and social impact of the pokies on workers and the poor will continue so long as they remain lucrative for business.