Are EGM Policy Changes for Consumer Protection or Generating Greater Tax Revenue for the Government in the Northern Territory, Australia?

Abstract

Electronic gambling machines (EGMs) can be found in hotels and clubs in all jurisdictions in Australia, except Western Australia. While providing state and territory governments between 5 and 15% of their annual budgets through taxation, EGMs are the riskiest form of gambling in terms of problem gambling risk and harms to self and others. This raises the question, of what governments are doing to reduce harms associated with EGM gambling, given they are the beneficiary of taxation revenues through increased EGM user losses?

Regulation of EGMs is based on a National Standard that applies to EGMs in New Zealand and Australia, though each jurisdiction has additional rules they apply, making for a patchwork of regulation and legislation across jurisdictions in Australia. Over the last decade, the Northern Territory (NT), Australia’s smallest jurisdiction, has made several policy changes around EGMs in hotels and clubs. This chapter uses data from two prevalence surveys and EGM user losses to answer the question, has the government enacted policy change to increase tax revenue through increased user losses, or to reduce harms through better consumer protections for EGM users? The chapter also explores the effect of venue closures and reopening due to COVID-19 on EGM user losses.

Analyses of empirical survey and EGM data showed that changes in EGM policy led to significant increases in EGM user losses, problem gambling risk and harm from own gambling among EGM gamblers. Upon reopening of venues after COVID-19 closures, EGM user losses increased between 40 and 69%, compared with previous year months. Government must do more to reduce harms associated with EGMs, and not use policy to increase user losses (and government tax) on the riskiest form of gambling available in Australia.