Poker machines are often seen to be a staple of some pubs or hotels. Their bright lights and noises aim to paint them as a harmlessly fun way to spend an hour or two. But what impact can they make on the local economy, especially one notorious for its gambling losses?
A hotel in Clyde North has received approval for the installation of 100 poker machines. Originally, the proposal was rejected by the council of the City of Casey, but in February the council was sacked over allegations of corruption. The administrators who took the place of the council have since accepted the proposal.
The City of Casey is located in South-Eastern Melbourne, along the rural-urban fringe. As of mid-February, during this financial year gamblers in Casey have lost in excess of $80 million. This is the second worst figure in the state, only topped by the City of Brimbank with $83 million in losses. One of the reasons for this figure is likely to be that the lengthy commutes leave residents seeking a way to relieve their stresses. Gambling companies are also aware that these areas often have much less to do in the way of entertainment compared to the inner-city suburbs, so pokies can be more desirable.
The gambling companies and poker machines take advantage of the bounded willpower of their customers, and this is the main premise behind their profits. By definition, bounded willpower states that consumers do not possess perfect self-control, and as such they can give in to urges, be impulsive or emotional with their decision making. Applying this to gambling, it shows that while almost all gamblers are conscious to the fact that gambling is designed and programmed to ensure that the gambler loses overall, they are often too addicted to stop. They will chase their loses, and without pre-commitment, there is no limit to how much they can lose in one session. The financial losses can influence emotions such as increasing anxiety or depression, stress or a lack of concentration. According to one study, 20% of suicides reported at Victoria’s Alfred hospital are related to a pokies addiction.
Not only do these losses affect the gambler themselves, but also their family and the wider community. These are the negative externalities, because these are people who are affected by the decision to gamble despite not consciously having an impact on the decision-making themselves. Gambling can often add strain to relationships, which is especially catastrophic when the gambler is married or has children. Instances of domestic abuse are also increasingly prevalent among gamblers.
The negative impacts can often continue outside the immediate connections of the gambler and impact the local economy. This is because the gambler has less money to spend elsewhere and as such, they are unable to support local businesses. Their choices could even reach a national level, as if the addiction is serious enough, they may end up receiving payments from the government as welfare, reducing the government’s available funds to spend elsewhere.
The only beneficiaries of the poker machines would be the stakeholders/owners of the pub, as well as the gambling companies. Some of these earnings may be passed on to the government as tax, but since the government has to pay welfare to certain severely addicted gamblers, overall it may not even benefit the government financially.
Australia already has 20% of the world’s poker machines, and we spend over $12 billion a year on them. Overall, I think that the introduction of any additional poker machines would be extremely harmful, as it would negatively impact the social and financial aspects of the local and national economies, as well as tearing apart families and friends. Gambling and addiction is a huge problem in Australia, and the addition of these poker machines would only be fanning the flames.
References:
https://www.abc.net.au/news/2020-03-03/city-of-casey-decision-on-new-pokies/12018258
https://gamblershelp.com.au/learn-about-gambling/effects-of-gambling/
http://proudlypokiesfree.com/statistics
https://www.dvrcv.org.au/about/what-domestic-violence
Year 11 MHS Economics 2020 
Nice use of graphs and maps, excellent stuff!
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How can we reduce the amount of money Australians lose gambling?
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