Anne Else: Gambling For Profit & Misery

I try to keep an eye on the business pages, though I think much of what appears in them is in fact thinly disguised advertising for a particular enterprise, prominent businessperson, or just the wondrous benefits of the capitalist system generally.

One of the most wondrous benefits of that system is the freedom to make money (including money for the government) by selling people things that harm them and their families - such as tobacco - or produce far more harm than good - such as gambling.

Deregulation of gambling industries in the 1980s and 1990s saw an explosion of casinos, pokies, Lotto, Instant Kiwi, and sports betting. Now the latest and even more damaging step in that process is about to be taken. On 17 March the Lotteries Commission announced that it will soon begin offering Lotto tickets online.

On Easter Monday the Dominion Post ran a follow-up story in its Infotech section. The headline was "Online Lotto a significant betrayal of trust, says problem gambling head."

Actually, that’s not true. The real headline was "Online Lotto first of two stage plan, says chairman". My version is what the headline should have been. That’s what Problem Gambling Foundation head John Stansfield said about the government’s response to the move to online gambling.

His response to the first anouncement had been equally blunt: he labelled the move "insane". In terms of the "second stage" envisaged so cheerfully by the Commission, he pointed out that online instant win games, such as scratchies, "posed a similar risk of addiction as other forms of gambling that allowed continuous play, such as pokies." But "NZ Lotteries seem to think that growing their business regardless of the damage they cause is their sole purpose."

It takes about five minutes to track this latest move to massively increase gambling "opportunities" back through its careful advance preparation by NZ Lotteries, and to understand why it’s bound to proceed almost unhindered.

Step 1: From the beginning
Grasp the central issue. As community activists against gambling know very well, what counts is access to gambling outlets. The amount of gambling activity in an area is associated with the density of gambling opportunities in that area.

Step 2: 1999
Keep careful track of the massive take-up of online gambling opportunities overseas. Signal well ahead of time that you might join them, saying this could appeal to younger people (presumably the ones who might think other kinds of gambling weren’t very cool, but would like anything computer-related).

Step 3: 2003
Make sure that a last-minute change to the 2003 Gambling Act, inserted after the select committee submission process has ended, exempts NZ Lotteries (and the TAB) from rules that ban organisations from taking bets over the Net or by phone.

Step 4: 19 September 2005
Launch your "new-look website, bringing fresh information to players in a more user friendly format". As you know very well, current website visitors are potential future online customers. Note that since the website was first launched in 2002, the number of website visits per month has increased "dramatically", from 1514 to 129,068.

Step 5: 2006
Spend a large amount of money installing new gaming software supplied by Gtech - a subsidiary of Italian-listed Lottomatica - that has the capability to sell products online, including online games and instant scratchies (which can be bought not only online but also through mobile phones and personal digital assistants).

Step 6: 13 March 2007
Drum up advance interest by announcing that you are likely to offer tickets to most of your "current prize draws" online, before "developing new games specifically tailored for the Web". Normalise the move to online gambling by comparing yourselves to other "government departments, pointing out that there is "strong consumer demand" for online products and many government agencies have introduced "online access to their range of services". Say it’s "essential" that you "respond to this change in consumer buying preferences". At the same time, stress that you are "very aware of our requirements under the Gambling Act to minimise harm".

Step 7: 17 March 2008
Announce that you are now at the "final stages of completing plans" to let people buy tickets to your flagship products, Saturday Lotto and Big Wednesday, over the Web, even though Internal Affairs Minister Rick Barker has not yet approved the necessary changes to Lotto’s game rules.

Step 8: 24 March 2008
Start the softening-up process for the next move to expand access to gambling opportunities before the first one has taken place: announce that selling tickets to existing lotteries online is just the first stage of a "two-stage plan". The second stage could involve offering "more adventurous games" within two years. Tell the select committee on government administration (and the press): "The belief and understanding we have wth Government is that, should stage one create no problems, the government of the day would then entertain looking at stage two."

Around $35 million is gambled every day in New Zealand. In 2005, New Zealanders lost $2.027 billion through all forms of gambling. Most of those affected by problem gambling live in families with dependent children. The Ministry of Health reports that current gambling intervention services are reaching only about 15% of all those who are estimated to be harmed by gambling.

Online gambling is likely to increase this harm exponentially. Lotto tickets have been sold online in Britain since 2003. In the second half of last year they brought in £163.3 million (NZ$412.9 million). More than three million players in the National Lottery have registered to buy tickets on the Net, through interactive TV and via their mobiles.

Gambling venues and pokies are heavily concentrated in low income communities, which are subsidising better-off taxpayers through gambling. Communities themselves don’t have any voice in where funds go, nor do they have any right to appeal decisions.

Gambling Watch says that for every dollar given to an essential social service by a pokie trust, "about three dollars has been lost by someone into one of their pokie machines…the money lost [often] does not go back into the areas it is lost from, let alone to the people who lost it, who are often those most in need."

No wonder there are growing moves by communities to restrict gambling access to the gambling opportunities physically present in their area (within the very narrow limits that the law provides for them to do this), either by reducing existing outlets (such as the number of pokie machines), or trying to stop new outlets opening. Manukau City Council received 6,700 submissions in response to its gaming policy review, urging the council to adopt a sinking lid policy or a moratorium on new venues.

Expanding legal gambling to the Internet will, of course, sidestep these attempts very effectively. But the Lotteries Commission won’t be counting the casualties, let alone picking up the pieces. They’ll leave that to organisations such as the Problem Gambling Foundation – which clearly does not have the same privileged access to government as the Lotteries Commission.

Yes, there will be controls – sort of. Internal Affairs Minister Rick Barker has "insisted" on this: no more than $300 worth of Lotto tickets a month or $150 worth a week for one player. If there are two players in a family, that’s $600 a month.

NZ Lotteries will accept these limits as the price of going online, although it would obviously prefer a freer hand. Chairman John Goulter "joked with MPs that the controls were ‘a lot more than would happen’ if he owned Lotto."

Hilarious. I bet he had them all in stitches.

- Anne Else is a Wellington writer and social commentator. Her occasional column will typically appear on a Monday. You can subscribe to receive Letter From Elsewhere by email when it appears via the Free My Scoop News-By-Email Service. Anne blogs at http://elsewoman.blogspot.com

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