On Monday night, Peter Garrett turned up to a meeting of about 200 club representatives at South Sydney Juniors Rugby League Club, in his southern Sydney electorate. He was, of course, grilled by those attending, who are not fans of the government’s proposals to introduce a system of pre-commitment for poker machines. The clubs repeated their assertion that the introduction of pre-commitment (which would enable pokies users to pre-determine how much they wish to spend on pokies) would sound their death-knell.

One of the claims made was that the introduction of pre-commitment would cost $5 billion, and would have devastating effects on club revenue. This was because ordinary punters would be scared off playing if they had to register.

Earlier this year (June 27) Media Watch highlighted the uncritical reporting of club claims that revenue would be slashed by 40% under a pre-commitment system. The next day, Clubs NSW media manager Jeremy Bath distributed a press release claiming that the 40% and $5 billion claims were justified by an independent report prepared by Deutsch Bank.

The press release quoted Clubs Australia executive director Anthony Ball saying that “the Deutsche Bank analysis of mandatory pre-commitment confirms industry warnings that the as yet untested technology will reduce club revenue by 40%”.

The Deutsche Bank report’s actual contents are at odds with at least a couple of the claims made by the Clubs Australia representatives, both in their June 28 press release and at Monday night’s protest meeting. First, it suggested that the range of cost estimates for the introduction of pre-commitment was between $400 million and $5 billion. It’s worth noting that the $5 billion figure would be the full replacement cost of every poker machine in Australia. No one seriously thinks that would be necessary. Even the manufacturers concede that at least 25% of current stock is almost immediately adaptable to pre-commitment. The lower end is the more likely cost, if a smart-card based system utilising retrofitting of older machines were adopted.

Secondly, the range of possible losses to revenue is actually given as “30-40%”. Further, no methodology is identified for this estimate. I wrote to the report’s first author on June 29, asking if he could refer me to the sources for those estimates, and/or advise of the methodology utilised in reaching them. Unfortunately, he hasn’t yet replied, which is of course a matter for him and his company. But it does make it difficult to assess the rigour of the method adopted in reaching these estimates.

Given the readiness with which these figures are bandied around, and the extent to which the Clubs Australia lobby relies on them, some transparency might be in the public interest. After all, the Productivity Commission was at great pains to disclose the methodology it used in making its estimates of the impacts, and so on, of pokies.

One further point might also be relevant. The Joint Select Committee on Gambling Reform also recommended that clubs should be able, if they wished, to introduce “low-intensity” pokies, with maximum bets of $1 per spin and maximum prizes of $500. These would not require pre-commitment. The government is considering this as an element of its approach to pokies reform.

The PC found that about 88% of pokies gamblers rarely if ever bet above $1 per spin, so it’s hard to see how anyone would be inconvenienced by using such devices. Perhaps the clubs’ silence on this aspect of the reforms recognises that they rely heavily on the revenue of those who can’t control their spending, and regularly bet above $1 per spin — up to as much as $10 per spin in NSW, where the load up (the amount you can put into a machine in one go) is still $10,000.

In any event, registration for a pre-commitment card would be about as onerous as signing up at the local DVD shop. Presumably there are people who don’t borrow DVDs because they have to show ID to do so; but I suspect there aren’t that many.

Truth, they say, is the first to go in war. In the pokies reform battle, it seems to be providing most of the casualties.