On the eve of the 20th anniversary of the introduction of poker machines in South Australia, we examine the impact on the state – and talk to some of the original figures in that historic decision.
The only remaining serving member of the House of Assembly from the 1992 decision to introduce poker machines into South Australia says it remains as “one of the worst things a Labor Government has done”.
It’s a claim rejected by the hotel industry and those who supported the move that saw South Australians start to drop coins into a machine from 25 July 1994.
But, two decades on, welfare advocates and one of the state’s key economic analysts argue the social and economic cost to the state has been enormous, with more than $12 billion being fed down the gullets of the state’s gaming machines in that time.
Women have borne a huge burden, with evidence that a large proportion of female prison inmates are there as a consequence of pokie addiction.
Michael Atkinson was a backbench MP in the Bannon/Arnold ALP Governments saddled with the sudden debt burden from the 1992 State Bank collapse. He would later serve as Attorney General in the Rann Government and today sits as Speaker in the House of Assembly. The only other sitting member of the house from that time, Bob Such, is on extended sick leave.
The pokies law was introduced as a Private Members Bill by Treasurer Frank Blevins, so that MPs could exercise a conscience vote.
The record shows that while Blevins and colleagues such as Chris Sumner were ardent supporters of the Bill, so also were some of their opponents, such as the Liberals Upper House MP Rob Lucas.
Lucas told InDaily this week he hasn’t wavered in his support for pokies – Atkinson, however, maintains it was a dreadful mistake.
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“There was enormous pressure from within government to find revenue,” Atkinson told InDaily.
“And there was concern in the hotels industry about the downturn in their business.
“Add to that the intense lobbying from the poker machine manufacturers and the pressure on MPs was very strong.”
Atkinson said he had opposed the introduction of pokies because it was likely to bring in a new class of problem gambler – and that’s precisely what happened.
“I remember Frank Blevins coming over to me and asking; ‘what have you got against a voluntary tax, comrade?’
“Even my mother was in favour of it.
“She, at that time, used to regularly catch a bus over the border to Tooleybuc and Wentworth with a group of women.
“They’d sit in the bus, chat, have a good day out and spend some time in one of the Wentworth clubs and play some pokies.
“But it was more of a day out, and when the pokies came to Adelaide, my mother never actually played them.”
There were, however, plenty of women who did.
“I sat on a review committee soon after and it became evident that where women had once made up a very small fraction of the problem gamblers, they had very quickly taken their place alongside men as equal partners in problem gambling,” Atkinson said.
“The impact on charities was felt immediately.
“This was one of the worst things a Labor Government did; the poker machines have been a scourge for poor and vulnerable people.”
Liberal MP Rob Lucas was a strident supporter of the pokies law in 1994 and retains that position 20 years on.
Lucas told parliament in 1992 there was no evidence to support the view that pokies would lead to an “increase in family breakup, divorce, crime, bankruptcies, poverty, the number of gamblers in South Australia”.
“I haven’t changed my view; if the vote was held today I would vote same way,” Lucas told InDaily.
“Sadly there have been and always will be a very small number of problem gamblers.
“In the past punters with SP bookies ,then pokies, now online poker and sports betting on your mobile.
“I don’t believe 99 per cent of people who enjoy recreational gambling should be penalized because of a small percentage of problem gamblers.
“Tackle the problem by trying to help problem gamblers-more should be done to help problem gamblers.”
Ian Horne was the Australian Hotels Association spokesman in the mid-1990s and still holds the role today.
“The poker machines have delivered more than $5.7 billion in direct taxation in those 20 years,” Horne said today.
“No other consumer product has done that.
“For every dollar of net gaming revenue, 40 cents goes direct to the State Government and 9.5 cents goes in GST which ends up with the State Government.
“It funds police, health, education and roads. When you look at the impact of pokies you have to balance the negatives against the resulting employment and investment.”
Horne said some of the doom and gloom assessments were not realistic.
“In 1998 a Social Development Committee of parliament was told by the Retail Traders Association that most of the claims about impacts on retail did not eventuate.”
However, he acknowledges that there have been problems.
“We acknowledge that people suffer from gambling problems; but South Australia has the best safety net provisions in Australia.
“The poker machine has become part of the leisure dollar and I think that in retrospect it’s been handled well.”
Premier Jay Weatherill wasn’t part of the 1992 parliament, but he disagrees.
“There is no doubt that the suffering associated with problem gambling is real,” the Premier said today.
“The introduction of poker machines has materially contributed to the rise of problem gambling over the years.
“We have responded to this and our efforts to tackle problem gambling lead the nation, however there is still much more that needs to be done.”
Mark Henley, manager of advocacy for Uniting Communities, said the economic and social cost of poker machines had been enormous.
He calculated the losses sustained by SA gamblers over the past 20 years to be $12.2 billion (based on the Liquor and Gambling Commissioner’s annual reports of net gambling revenue).
“The simple reality is that the level of gambling harm has increased dramatically since poker machines were introduced,” he said.
However, there are many unknowns – simply because the state hasn’t commissioned ongoing and detailed economic analysis of the impact of electronic gaming.
Henley recalls the early impact of the machines on business – walking down strip shopping centres and talking to toy shop owners and hairdressers who reported an immediate 20-25 per cent decline in turnover.
Employment, he argues, has been damaged by so much public spending being focused on an area of the economy which creates relatively few jobs. Henley quotes economic analysis that shows that every $1 million in extra spending on poker machines creates only two new jobs. In the hospitality industry more generally, that much extra turnover would be expected to create another 20 jobs.
“If that money (the $12.2 billion) had been spent in industries with a higher employment multiplier, we would have had a whole lot more employment and economic activity,” he said.
“In the context of Holdens and some of the other businesses that have gone down, that’s a lot more employment that has been lost.
“But the real economic impacts have never been properly understood in this state.”
The overall social impact is even harder to calculate, but Henley agrees with others that poker machines have been a social disaster, particularly for women.
“The relationship between female imprisonment and pokies is massive,” he said.
Michael O’Neil and his team at the SA Centre for Economic Studies have completed several reports into the social and economic impact of pokies.
O’Neil says data from Victoria shows a strong link between gambling-related crime and women serving prison terms.
“The Victorian data shows that around one third of female prisoners are there for offences related to gambling,” O’Neil told InDaily this week.
“In some cases it’s the debt that leads to theft.
“In other cases, it’s more complex; someone who needs money to pay debts becomes a target for drug courier recruiters and so the cycle begins.”
O’Neil says the impact on social services is another area where it’s difficult to quantify the level of harm.
“There was the case of one woman who had embezzled $800,000.
“There’s the cost of her imprisonment, the cost to her immediate family and ongoing social difficulties, let along the cost of police investigating the crime and its fallout.
“Government’s are sometimes unwilling to release all the information that relates to the total cost of problem gambling.”
O’Neil’s 2006 report for the Independent Gambling Authority shows compares the job creation impact of spending on gaming machine compared to other forms of consumption.
“As a job creator, pokies are at the low end,” he said.
SACES had updated its database of gaming machine activity in hotels and clubs, including expenditure and taxation revenue; it can be downloaded from SACES’s gambling portal website.
Back in 1992, the passage of the legislation had a bumpy start.
On 8 May 1992 Upper House MP Mario Feleppa switched his opposition to the introduction of pokies and backed the passage of the Gaming Machines Bill ensuring it would pass 11 votes to 10.
It had earlier passed through the Lower House 21 to 17.
The amendments made to appease Feleppa went back to the House of Assembly for approval where MPs gave it the nod and quickly headed off to their winter break.
The next day, parliamentary staff noticed that two amendments from the Upper House were not in the schedule approved by the Lower House and so the new law lapsed.
It was re-introduced in September and quickly passed.
The following year there was an attempt to repeal the new law after a strong media and community campaign led by The Advertiser.
The repeal push failed and eventually administrative moves began to advertise gaming machine licences and venue approvals.
In late July 1994 the first coin dropped through a slot and would soon be followed by hundreds of millions of them every year.
Blevins had estimated the gaming machine laws would bring in revenue of around $30-40 million, per year.
In the first year the state reaped $292 million, rising to $916 million per year just 10 years later.
Bans on cigarette smoking in pokie venues pulled the revenue back to $844 million by 2008 and the impact of the Global Financial Crisis on consumer spending has seen it fall further to $742 million in 2011/12.
In 2004 Frank Blevins refused my interview request on the pokie issue, saying: “I’m retired and living happily in North Adelaide, comfortable in the knowledge that I never have to talk to the media again.”
He died in 2013.
