assignment_completed

Online Gaming regulations are in

emergency

Submission to the Australian Government on the

Revision of Interactive Gaming Act 2001

[Name of student] [Student ID]

For [Instructor Name]

This assignment is approximately 1643 words in length

Contents

Introduction to the Australian Council of Social Services

Problem Gambling History of online gaming Recent Developments

Online gaming is the major source of problem gambling Problem gambling caused various social issues Financial impacts from online gaming Conclusion References …3

…3 …3 …4 …4 …5 …6 …6 …8

Introduction to the Australian Council of Social Services

The Australian Council of Social Service (ACOSS) is the national-wide body of the community services and welfare sector. Founded in 1956, ACOSS aims to reduce poverty and inequality by promoting public policies and actions by government, community and private sectors towards socially and environmentally responsible. ACOSS supports non-government organizations which provides assistance to the general public and contributes to national public policy design.

Problem gambling

The term \"Problem Gambling\according to the website problemgambling.com, is „used to describe gambling behavior, which causes disruption in any important life function, whether psychological, physical, social or vocational. This term is generally accepted to include, but is not limited to \"Pathological\a.k.a., \"Compulsive\" gambling. Compulsive Gambling is a progressive addiction characterized by increasing preoccupation with gambling, a need to bet more money more frequently, restlessness or irritability when attempting to stop gambling, \"chasing\" losses, and loss of control by continuing negative gambling behavior, regardless of the disruption and serious consequences of such behavior.‟ (problemgambling.com, 2009)

History of online gaming

The history of online gambling is quite short. Online gaming started in the 1990's and has become explosive ever since. Internet betting has become a multi-billion dollar industry in a very short time and its size, in fiscal sense, is still having a rapid growth. The catalyst for the rapid growth happened in 1994, when the government of the Caribbean island, Antigua Barbuda, passed the law that enables online casinos to operate from their homeland to this day - the Free Trade and Processing Zone Act. Australia grants the first and only online casino license to Lasseters. By the year 2000, the Federal Government of Australia put into effect the Interactive Gambling Moratorium Act, which prohibits any online casino or sportsbook formed after May of 2000 to operate domestically.

Recent developments

In June 2010, Australian Productivity Commission (PC) has published a report to recommend that online gambling has to be legalized, regulated, and taxed. Responding to a request from the Australian government, the PC has updated their 1999 inquiry into the gambling industry and has returned a report to the federal government. The report makes a large number of

recommendations. The government is under no obligation to accept their recommendations of the Productivity Commission, but is likely to take its comments very seriously. Since the publication of the report, the issue of limiting online gaming has been the center of some heated media attention in the past few months

Online gaming has gained wide acceptance and popularity among gamblers for its convenience. An estimated 20 million people worldwide gamble online at internet casinos. In 2007, Americans spent $34 billion on gambling in bricks and mortar casinos, and that number does not include the amount spent at Native American casinos. In the case of Australia, the revenue from online gaming grows at an annual rate of 3.5% in the past decade despite the fact that some traditional gaming places have shown zero or negative growth rates over the same period.

This submission addresses the concerns of limiting online gaming. Various researches have shown that online gaming is a catalyst to problem gaming. Problem gambling is ten times more common among those who gamble online than among those who only gamble offline, according to the research conducted by Griffiths (2007). The PC also suggested in the report that these computerized gambling machines account for 80% of problem gambling in Australia.

Online gaming catalyzes problem gambling

The medium of the internet may be more likely to contribute to problem gambling than gambling in offline environments. Problem gamblers and those at risk contribute a significant portion of Australian electronic gaming machine spending.

Despite the fact that the cause of gambling problem is the individual‟s ability to control the gambling, anecdotal reports indicate that one risk factor may be a fast speed of play. In other words, the faster the wager to response time with a game, the more likely players may be to develop problems with a particular game. With the advance of technology and the spread of the Internet throughout the last decade, it becomes faster and more convenient for gamblers to access online gaming portals.

Liberal online gaming has made the situation worse. Inadequate protection from the existing IGA does not help in improving problem gaming in Australia as consumption by Australians of electronic gaming machines increases.

Researches have also found that a higher portion of online gamblers are classified as “problem” or “pathological” gamblers, compared to people who visit conventional land-based casinos. Besides, online gambling is even more addictive than ordinary live gambling, since internet in itself has an addictive effect on individuals.

Problem gambling caused various social issues

A recent research study was done by the National Opinion Research Center at the University of Chicago, in collaboration with three other research bodies. Gestian et al (1999) reported that „based upon criteria developed by the American Psychiatric Association, we estimate that about 2.5 million adults are pathological gamblers and another 3 million adults should be considered problem gamblers.‟

Take the state of Victoria as an example, problem gamblers in Victoria have been found to spend nearly three times the amount spent by non-problem gamblers ($A103 versus about $A36), and to make six times as many visits to automatic teller machines (ATMs) (Caraniche Pty Ltd 2005). Problem gamblers spent around six times as much as non-problem gamblers, a total of $A443 per week or over $A23,000 annually. Problem gamblers were estimated to spend about nineteen-folds of recreational gamblers on average.

With the current IGA, Australia has the highest percentage of problem gamblers among major developed countries, according to a survey. Applying the same methodology used in the report published by Sproston et al (2000), approximately 2.3% of population in Australia are problem gamblers. This is significantly higher than the international average of 1.5%.

Various studies have found high rates of alcoholism, depression, anti-social personality disorder, mood disorders, and other conditions in pathological gamblers, leading some researchers to suspect that problem gambling is often a symptom of an underlying condition.

Financial impacts from online gaming

Promotion of online gaming impacts revenue of traditional gaming. Despite a strong growth in revenue, online gambling, on the one hand, is only responsible for 4% of all national gaming. The revenue generated from online gaming is not the major portion of total gaming revenue. Moreover, there are studies concluding that total revenue from gaming industry may not be necessary increased with the introduction of more online gaming machines. According to national statistical bureau, the revenue growth of conventional gaming showed a negative trend after additional online gaming machines have been set up.

Problem gamblers have highly likelihood to experience adverse consequences such as broken relationships and families and alcoholism. Although the economic costs of these consequences cannot be measured directly, there are other tangible economics costs that are usually spread around the community. Earlier studies found out problem gamblers experienced higher rates of personal bankruptcy and higher divorce rates. (Volberg 1998). For instance, according to Gestian et al, (1999) in the United States, „problem gambling costs the society approximately $5 billion per year and an additional $40 billion in lifetime costs for productivity reductions, social services, and creditor losses. However, these calculations are inadequate to capture the intra-familial costs of divorce and family disruption associated with problem and pathological gambling.‟

The public does necessarily enjoy the taxation levied from online gaming. Electronic gaming machine operators are not required to be registered in Australia and therefore tax levied on conventional gaming is not applicable to online gaming. However, problem gamblers have caused additional resources from the community for its social problems. It is clear that the costs of liberal online gaming outweigh the benefits.

Conclusion

This submission has presented the evidence that supports stricter regulation of online gaming, in addition to the existing IGA. Reviewing the existing IGA is not sufficient. Our recommendation is simple: impose limits in online gaming. The effects of problem gambling are well documented and the financial costs of problem gambling cannot be ignored and should be addressed seriously. Prompt actions have to be taken to promote an effective regulatory regime to address online gaming. Gaming is a vital industry in Australia and its contribution to the economy should be well perceived. The government has its obligation to promote a sustainable development for the gaming industry and balance the impacts of online gaming.

References

Griffiths M. et al (2009), Sociodemographic Correlates of Internet Gambling: Findings from the 2007 British Gambling Prevalence Survey, CyberPsychology & Behavior., Vol. 12, No. 2: 199-202.

Young, C. (2007) Frequently Asked Questions on problem gambling, [Online], Available: http://www.problemgambling.com/faq.html, Date accessed 22/9/10.

Sproston, K. et al (2000) Results from the British Gambling Prevalence Survey, London: National Centre for Social Research.

Delfabbro, P.H. & Winefield, A. H. (1999), „Poker-machine gambling: An analysis of within-session characteristics’, British Journal of Psychology, 90, 425-439.

Griffiths, M. (1999), „Gambling technologies: Prospects for problem gambling.‟ Journal of Gambling Studies, 15(3), 265-283.

Williams, R et al (2005), What Proportion of Gambling Revenue is Derived from Problem

th

Gamblers. presentation at the European Association for the Study of Gambling (EASG), 6European Conference, Malmo, June 29 – July 2.

Caraniche Pty Ltd, (2005). Evaluation of Electronic Gaming Machine Harm minimisation Measures in Victoria. Department of Justice, Melbourne. Print.

Livingstone, C. et al (2008). The Relevance and Role of Gaming Machine Games and Game Features on the Play of Problem Gamblers. Independent Gambling Authority, South Australia. http://www.iga.sa.gov.au/pdf/0801/Final%20report.Print.Feb08.pdf

Gerstein, D. et al (1999). Gambling Impact and Behavior Study. Natioanl Gambling Research Center.

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