By Peter Boyle
Everyone hopes to be a winner when they buy a lottery ticket or place a bet at the TAB. That is certainly the emphasis of the slick advertising for the burgeoning legal gambling industry.
But even those who fervently believe they are on to a "sure thing" have slim chances of coming out ahead. Every year Australians lose an estimated $5 billion in legal gambling. In the process they put seven to eight times that amount through bookies, totaliser agencies, poker machines and casinos.
The profit is shared between state governments and the private companies and public agencies that organise legal gambling. An unknown amount goes through illegal gambling outlets. In the United States, more than US$220 billion is gambled each year and in the European Community some US$50 billion is estimated to be wagered each year.
As the longest recession since the Great Depression grinds on, gambling turnover is rising consistently.
Victoria, one of the hardest hit states, has had legal poker or gaming machines only since the middle of last year. But in the first six months, $1 billion worth of coins were poured into some 6800 machines. More machines are being installed in pubs and clubs, and the state's first casino may be operating by the middle of next year. The state-owned Victorian TAB has become the largest totaliser agency in Australia.
Tattersall's, the private company which shares the gaming and lottery market with the Victorian TAB, claims to be taking in 70% of the turnover in gaming machines. Its general manager boasts that "50% of the adult population of Victoria" has at least a ticket in the Tattslotto draw every Saturday night. It sold $220 million worth of instant scratch tickets 1991-92 and $700 million worth of lotto tickets.
The psychology of gambling works best in conditions of increasing inequity, and its assurances of easy
profits have been catching the eyes of politicians and business people in the recession-blighted '90s.
Some politicians see gambling as the perfect "painless" tax. In Hong Kong the government's single biggest source of revenue is the Royal Hong Kong Jockey Club, which has the monopoly on legal gambling.
While Australian state governments aren't that reliant on gambling yet, gambling's contribution to state revenues is significant and rising. In Victoria the TAB added $179 million to state revenue last year and Tattersall's paid $328 million. The introduction of poker machines will add about $110 million to state revenue this year.
Australia now has nine privately owned casinos. Five more are planned to be opened in the next couple of years in Sydney, Melbourne, Brisbane, Cairns and Christmas Island. Governments collect taxes from these operations and the extra tourist services they bring in their wake.
The increasing profitability of gambling at a time when profits from productive activities are declining has given rise to calls for the privatisation of state-owned gambling agencies. In February a report to the Kennett government by the private consultancy firm Deloitte Ross Tohmatsu urged the privatisation of the Victorian TAB. The Melbourne Age editorialised for the TAB's corporatisation if not privatisation on February 18.
But the would-be privatisers of state gambling operations don't want to leave things to the market; they know that a reason for the high profitability of gambling is the monopoly conditions created by government regulation.
Jan McMillen, a lecturer in public policy at Queensland University of Technology and a member of the Victorian Gaming Commission, says that by setting up regional monopolies, Australia has avoided the bankruptcies that have beset the casino industry overseas.
Thus a major role of legislation like Victoria's
Casino Control Act is to guarantee monopoly superprofits from gambling. But the terms of what there is of a public debate on gambling policy are often framed differently.
The state regulates gambling for moral reasons, we are expected to believe. If gambling isn't legally restricted, terrible social consequences will follow. Hence little card games and two-up schools (except on ANZAC Day) stand to be raided by the police. But the official moral posturing behind the regulation of gambling looks increasingly hypocritical as legalised gambling grows.
Just over a decade ago there was bipartisan opposition in Victoria to the establishment of casinos in the state. Now both Labor and Coalition have done a back-flip.
In 1982, the Cain Labor government of Victoria commissioned former federal court judge Xavier Connor to head a public inquiry into casinos. Connor's recommendation was against the establishment of casinos because any safeguards against crime and corruption would be eroded over time.
Undeterred, the Kirner government got Connor to head another inquiry. This time the terms of reference were to examine, not if there should be casinos, but rather how they could be controlled. Despite Connor's continued scepticism on this question, the Kirner government declared that it had established "watertight" regulations to exclude crime from casinos.
The owners of most of Australia's casinos are big gambling operators based in Las Vegas in the United States.
Two of these, Jupiters Ltd (which runs the Gold Coast casino) and Sheraton Pacific, are bidding for the Melbourne casino. They've feted government representatives and shown their hospitality to teams of public inquirers who have been flown to the world capital of gambling. Investigators commissioned by the Victorian government have recently dutifully declared them "clean".
The third bidder is a consortium of Hudson Conway, Federal Hotels, Carlton and United Breweries and the Victorian TAB, which adds interest to the possible privatisation of the TAB.