Pubs, clubs and casinos have all been closed as part of the response to COVID-19. That means Australia’s 194,000 poker machines are now shut down. These venues, and their machines, are not expected to re-open anytime soon.
It also means the 15-25% of the population who use pokies (depending on the jurisdiction) will not be able to get access to them.
Further, assuming the shutdown lasts six months, as Prime Minister Scott Morrison has flagged, pokie operators will forego about A$7.5 billion in pokies revenue. That’s the amount punters would normally lose to pokies in casinos, pubs and clubs over that period.
A relief from stress and boredom
For some intermittent pokie users, this will be no big deal. For others battling a pokie addiction, the shutdown could bring a sigh of relief, limiting the opportunity to fuel a habit they know does them (and their families) significant harm.
For other high-risk gamblers, there may be a strong temptation to shift their gambling habit online. In some cases, pokie users will already have online accounts. Others may not. We can anticipate online bookies doing their best to convert such people into more regular – and lucrative – customers during the COVID-19 crisis.
There will be few situations more stressful – and at the same time boring – than what we can expect to endure over the coming months.
Access to unanticipated lump sums of money could also be a factor in driving more people to online gambling. The government will allow people to withdraw up to $20,000 from their super accounts over this and the next financial year.
For some, that could prove dangerous.
Creative new ways to induce people to bet
In the United Kingdom, some politicians are concerned the stress and anxiety of self-isolation and social distancing will induce risky online gambling. They have been imploring the government to restrict online bet sizes and impose deposit limits for betting accounts following the shutdown of offline gambling venues.
In the US, too, online bookies and casinos have seen revenues spike as casinos have shut down.
Much of this will be replicated in Australia. If online gambling does increase here, there could be long-lasting repercussions – what social justice advocate Tim Costello once called the phenomenon of “losing your house without having to leave it”.
As the Australian sporting codes shut down, events that provide the grist for the gambling mill will become harder to find. Punters may be tempted to gamble on automated casino-style games in European countries where this is permitted.
Australians can get access to offshore sites (using them is not an offence), although the Australian Communications and Media Authority has started asking ISPs to block specific sites it identifies.
Gambling markets are also now available on a multitude of national and international events. For instance, Australian bookmakers are heavily promoting horse-racing – one of few sporting events that haven’t been cancelled globally. More obscure sporting events are also being advertised, such as the Table Tennis Cup in the Ukraine.
“Return to action” markets are also being offered on major international sporting events. For instance, Australian punters are able to bet on whether the next NBA game will be played before June, July or August.
Markets are also being offered on e-sports, including the global ESL Pro League, as well as the reality TV series Survivor All Stars.
Bookmakers have even offered over/under markets on the daily temperatures in the capital cities.
Internationally, evidence suggests a shift from pokies (or other gambling venues) to online gambling does not substitute for all of the revenue lost when pokies are shut down. If there were a direct transfer, bookies would see a $7.5 billion bonanza over the next six months.
But even a small proportion of that would be a big boost to bookies’ bottom lines.
Bookies are also among our biggest media advertisers. There is nothing to suggest they won’t run ads during the crisis to try t persuade people stuck at home to open a gambling account.
What can we do about this?
There are several policy options. The federal government has been active in the regulation of online gambling in recent years, persuading the states (which license and regulate gambling operators, including online) to adopt a consumer protection framework.
It would make sense to fast-track some new measures. The Australian Bankers Association recently called for submissions on restricting the use of credit cards in online gambling.
Credit betting was prohibited by the consumer protection framework, and credit cards can’t be used in ATM or EFTPOS machines in offline gambling venues. However, credit cards are routinely used to top up online gambling accounts. It is an excellent time to introduce a prohibition on credit cards across the board.
It may also be prudent to legislate for an upper limit on deposits to gambling accounts, as advocated in the UK. This could apply to both the frequency of deposits and the amount.
A maximum bet limit amount could also be legislated during the COVID-19 crisis. Complementing this, a universal pre-commitment system that requires people to set time or monetary limits before they gamble could also be introduced. This is how gambling works in Norway, as an example.
Simply shutting down online gambling in the states going into lockdown is another real option. We know that high rates of gambling are associated with increased rates of intimate partner violence, as are disasters. Already, we are seeing an increase in intimate partner violence related to the coronavirus crisis.
Some governments may see an online gambling shutdown as a reasonable response, given other gambling venues have closed almost entirely. And the loss of revenue to the states would be modest.
Victoria, for example, will lose about $96 million per month in taxes from the pokies shutdown. Victoria’s taxes from online wagering are just $11 million per month by comparison.
One of the acts of a caring and compassionate society is to help people avoid the potential harm that an uptick in online gambling may induce.
Apart from anything else, restricting access to online gambling may also help those who seek to use the pokie shutdown to better manage their gambling. That alone would be a major benefit.