On Australia and poker machines

ClubsNSW Media and Communications Manager Carissa Simons writes: Re. “Australia’s love affair with pokies” (Tuesday). Yesterday’s video on poker machines had so many factual errors in it that I actually lost count. But in the interest of at least some accuracy, here’s as many corrections as I could fit into 200 words. Australia has 2.58% of the world’s gaming machines (not 20% as claimed) and Australia does not have the highest number of gaming machines per capita (there are 13 per 1000 people in NSW compared to 61 per 1000 people in Nevada).

We’re also not the highest spenders on gambling per capita (Japan alone spends double per capita on pachinko and pachislot machines than Australia) and the Productivity Commission’s own figures indicate problem gamblers account for closer to 16% on turnover, not 40%. A recent Tasmanian study put that figure lower at around 13%. So next time Crikey runs a video or article on an issue as serious as problem gambling, it would be worth checking the facts rather than swallowing hook, line and sinker the lies and codswallop that are peddled by the anti-gambling lobby.

Jake Stevens responds: The 20% figure relates to the number of “high-intensity” poker machines in the world. This classification has been given to machines that are deemed “high risk” to problem gamblers for the speed at which money can be lost. The low-intensity British poker machines only allow very small bets in comparison to Australia. British casinos have maximum bets of 50 pence (about AU$1.50) per game, compared with Australian machines in pubs and clubs with $10 maximums (with multiple line games, this makes it possible to spend $100 with one push of a button).

The maximum average loss rate per hour for Australian poker machines in Australian dollars is $720 per hour compared to $156 for New Zealand machines (outside casinos), $130 for the United Kingdom machines, $52 for Japanese machines and $705 for United States machines.

(Sources: Wanna Bet?: Winners and Losers in Gambling’s Luck Myth; G-Line: Office of Liquor, Gaming & Racing.)

If you include the lower intensity machines such as the pachinko (pinball-style) gaming machines in Japan and the fruit machines in the UK, obviously that percentage decreases.

Australia as a nation has the highest number of gaming machines per capita. Indeed Nevada has 16 persons per machine and NSW 77 persons per machine, but measured as an entire country, the USA has 360 persons per machine and Australia has 114 persons per machine.

As stated in text at the bottom of the video, this is only for countries where the population exceeds 1 million people. And the “money spent on gambling” is a per capita amount also (as stated).

(Source: World Count of Gaming Machines 2014 — as stated in the video.)

Japan has been excluded from the count as their machines (Pachinko) are legally not considered gaming and differ vastly from the common poker machine we know. Gambling for cash is illegal in Japan. Machines in Japan do not pay money as prizes, however “unofficial” (and sometimes illegal) vendors outside of the establishment offer money in exchange for prizes indirectly. That is why this figure is sometimes included in certain poker machine counts.

The Productivity Commission’s 2009 (and most recent) gambling report states: “While survey results vary, around 15 per cent of these regular players (95,000) are ‘problem gamblers’. And their share of total spending on machines is estimated to range around 40 per cent.”

Not a single fact cited in the video was taken from an anti-gambling lobby group.

On CEOs and MPs

Peter Harkness writes: Re. “CEOs trump MPs for profligacy, but at least they’re not wasting our money” (yesterday). I enjoy reading  Crikey. I am a subscriber. At the end of the article, you write:

“CEOs get paid more, and with less oversight. So should we loosen the pressure on our MPs? Ultimately, no. The difference is that MPs are paid with our money. That gives us the right to demand value”.

But of course, is a sense, the money being wasted by companies on their CEO is also OUR money. After all, where do they get their money from? For example, instead of wasting it, they could charge us lower prices for their products and this way leave the money they plan to waste in our pockets.

David Salter writes: Jason Murphy would have us believe that the difference between elected politicians and corporate executives is that MPs “are paid with our money” and that therefore “gives us the right to demand value”. That distinction is glib, illusory, and betrays a very simplistic grasp of economics.

The stratospheric salaries of top corporate staff are met from the profits of those corporations (or from their cash-flows). And from where are those profits derived? From the margins customers ultimately pay on the goods or services they purchase. Those customers are the same “us” who also pay taxes. In fact, only around 60% of Australians pay any income tax, but all of us have to pay the hefty margins on everything we consume, including essentials such as food, petrol, electricity and water — commodities over which there are few genuinely competitive market mechanisms to control prices.

That’s how capitalism works. In the end, everyone pays. It’s a fairly efficient system, but that doesn’t mean it is fair in itself. If logic prevailed, the CEOs of the large corporations would be just as accountable to “us” as any politician. For the same reason, the argument that the ABC is directly accountable to taxpayers but the commercial networks are not also fails. We all pay for commercial TV and radio (whether we use them or not) because we’ve paid for the advertising that supports them.

Murphy also neglects to acknowledge a less obvious downside for the general public to the multi-million salaries of CEOs. Those buckets of cash and perks reduce the profits of public companies, which inevitably means their share prices and dividends are less than they might be. That’s not just a financial penalty for those who hold scrip in our top 500 companies. It also depresses the earnings of the superannuation funds who invest so massively in the “big end” of the market. Every worker disappointed with their retirement lump sum has good reason to blame the greed of the CEOs.

John Kotsopoulos writes: Jason Murphy wants a tighter rein on MP’s spending but is happy to give CEOs a free pass on the basis that they’re not wasting our money. The latter may not be receiving taxpayer funded salaries, but whether as taxpayers, consumers or private investors it is in the long run all our money, Jason. Cosy remuneration packages with low or easily achieved performance targets agreed by compliant company boards, dominated by institutional investors, just make things worse. We now have a situation where a big dividend can be declared, which impacts on executive bonuses, at the same time as a capital raising is announced. Picking on MPs for exploiting packages that have been independently arbitrated while allowing CEOs a blank cheque is just not on

On same-sex marriage

Adrian Jackson writes: Re. “If Abbott loves plebiscites so much, here are a few more he can have” (yesterday). We elect MP’s to carry out our wishes, not for them to sit in the fence on issues like marriage equality, alternative power generation including nuclear power or to involve us in unnecessary and unwinnable foreign wars. In the last 10 years were have been governed but the worst federal governments I can recall in my 63 years. Most MPs are too gutless to make progressive and meaningful decisions. Australians don’t want be be dictated to by people living in the past or beholden to outdated religious dogmas. MP’s who can’t do their job should get out at the next election. We have too many MP’s from a narrow band of society like lawyers, union officials and increasingly former staffers to MP’s who have no experience of life in the real world. Up to three terms is the maximum most MP’s should serve before we vote them out or they retire and get a real job outside politics

Niall Clugston writes: Someone should be asking why, if Tony Abbott thinks the people not politicians should make the decision, he voted for Howard’s Marriage Act amendment in 2004 which ruled out same-sex marriage.