A fresh wave of casino liberalisation is spreading across Australia. Australia’s Queensland State government stated that it is looking for expressions of interest in casinos in Brisbane and is looking at offering two additional licenses.
The announcement was made in May of this year when it was revealed that this government’s “master plan” for Brisbane could include a new casino after many years of lobbying for expansion from Echo Entertainment and James Packer.
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The concept of a new casino at the Gold Coast has also been promoted by the mayor of the region for a while, with his Queensland state government giving a qualified approval. A recent proposal to build an additional casino in Cairns has been approved by the benefit of a simplified approvals procedure.
The announcement from Brisbane is coming just days following the day that SkyCity along with the South Australian state government finalised an agreement to expand in the number of players at the Adelaide casino. The new casino will have 505 additional pokies, 95 more table games, and 300 brand new electronic gaming terminals.
The government is keen to promote the anticipated benefits of tourism offered by “six star hotels”, and attempt to minimize the possible harms that could result from gambling. In reality “casino” has become something of a slang term in the government of state. NSW Premier Barry O’Farrell insisted on calling the proposed Barangaroo casino as a “VIP gaming facility”, even as the Queensland government talks of “integrated developments”.
This spin offers an insight into the economic fact: casinos help local economies only to the extent they earn new tourists dollars. If locals make purchases in casinos, it takes revenues from other businesses or funnels savings from households in the pocket of corporations as well as billionaires such as James Packer.
It’s not surprising, therefore that both the casinos and the authorities that license them are keen to stress the fact that they target international high-rollers. For instance, in South Australia, for example the the deputy prime minister John Rau claimed that the casino’s redevelopment could attract gamblers who can afford the risk of losing “tens of thousands of dollars in an evening”.
However, it’s not just the wealthy who are losing “tens of thousands in an evening”. A VIP ticket isn’t necessary to make big losses. In the pokie halls machines are made to ensure that gamblers lose up to $1200 per hour. In NSW pokies, machines can be loaded with $10,000 at one time.
With the imminent growth of casinos, it’s important to consider that the industry of casinos as well as the profit that the Packer’s Crown Limited, and Echo Entertainment is funded by residents who are losing more than they can pay for. In 2009-2010, visitors to casinos were able to lose more than $3.5 billion across Australia.
The majority of gamblers are locals with international tourists making only 5 percent of gamblers at Australian casinos. Most casino profits do originate from the VIPs who contributed just 17% of gambling revenues. Instead the majority of winnings from gambling resulted from players at the pokie, while the rest 43% of the money being lost to the main gaming tables.
Based on the fact that the estimated 40% of all pokie spending comes from gamblers who are struggling and between 12 and 32% of table games – between 20 to 30% the gaming revenues at Australia casinos could come from gamblers who are struggling. However, this is based on the hypothesis that there aren’t any VIP gamblers having gambling issues. Casinos are not likely to survive in their current state without causing significant harm to their top patrons.
An recognition of this is included within the deal between SkyCity and the South Australian government and SkyCity. The agreement includes “responsible gambling” measures such as voluntary pre-commitment as well as funding for rehabilitation services for addicts. Since evidence suggests that pre-commitment to voluntary is not likely to significantly reduce the amount of gambling-related harm, the rehabilitation funding could be seen as an attempt to rebuild the lives that an expanding casino can play a significant role in breaking.