Social and Policy effects of EGMs in Australia

The effect Electronic Gaming Machines are having on Australian society is a significant public health concern.[1]

Powerpoint Presentation

Of the over $20 billion dollars Australian’s lose gambling each year, $11 billion is lost to Electronic Gaming Machines (EGMs),[2] with over $3.7 billion lost in Queensland alone.[3]

Consequently, Australia has the largest number of people experiencing psychiatric injury relating to the playing these machines,[4] with up to 90% of those seeking treatment for gambling disorders citing EGMs as the source of their ailment.[5]

The 2010 Productivity Commission report on the state of gambling in Australia noted EGMs were “where most harms arise”.[6]

The report shows the risk EGMs pose increases significantly with frequency of playing, the “conditioning effects of random and intermittent payouts, and combined with the capacity for rapid repetition of games encourage sustained gambling”.[7]

 

Regular players experience abnormal cognitive arousal,[8] lose track of time,[9] and dissociative states.[10] Prolonged playing causes many to experience difficulty monitoring and controlling their behaviours,[11] urges to continue gambling,[12] and inability to stop.[13]

It is also important to note that Western Australia has fewer problem gamblers as a result of a lack of EGMs in the general community.[14]

CEO of the Ontario Problem Gambling Research Centre, Robert Simpson, claims EGM’s are designed to create an illusion of favourable odds, saying “these design characteristics give people the wrong impression of how the machines work, such that they actually believe that over time, the more they play, the more likely they are to win.”[15]

Research has repeatedly shown the harmful effects of EGM’s rapid continuous play,[16] and the random schedules of reinforcement contributing to their addictive quality.[17]

Prolonged playing causes ordinary people with no prior history of problem gambling, to experience difficulty monitoring and controlling their behaviours,[18] to experience urges to continue gambling,[19 gamble longer than intended,[20] and an inability to stop playing.[21] Past research has also shown that over 1/5 EGM players experience some form of negative consequence (not related to economic loss), [22] while another  Canadian study by the Alberta Alcohol and Drug Abuse Commission found that 71% of clients with gambling addictions had no problems before playing a form of EGM.[23]

For every problem gambler, an additional ten people are estimated to be impacted,[24]whether through suicide, depression, relationship breakdown, lowered work productivity, unemployment, bankruptcy or crime.[25]

An estimated 10-25% of problem gamblers commit offences to fuel their continued playing.[26]

A review of 528 legal judgements of 12,662 criminal offences heard in Australian courts indicates a quarter of a billion dollars may have been lost to fraud related to gambling between 1998 and 2007.[27]

Of these stolen funds, 56% were used to fund EGM addiction.

Interestingly these figures were only sourced from online judgments and did not include failed attempts.

The DSM-5 categorises “gambling disorders” as a substance addiction, not unlike addictions to drugs and alcohol.[28]

Yet problem gambling is still commonly considered by the public and policy makers as a pre-existing psychological disorder rather than the product specific dependence experts know it to be.[29] Existing policies overwhelmingly place responsibility on players rather than the gaming industry as a whole,[30] predicated on the mistaken belief that problem gambling affects a small minority.[31]

Recommendations set out in the Productivity Commission Report (PCR) (2010) were evidence based and addressed many issues arising from the proliferation of EGMs;[32] but they have not been legislated.

For instance, multiple studies have demonstrated that reducing bet size does not adversely affect recreational gamblers but will greatly reduce the burden for both problem, and at risk gamblers.[33]

Modification of EGM programming to reduce addictive elements, such as the number of near wins, adding reminders of the money and time spent, and limiting total expenditure will reduce gambling-related harm.[34]

Excessive near wins were banned in the USA as far back as 1989 in response to research demonstrating the harmful effects this has.[35]

However, it appears that in Australia there is little political will to pass such legislation and plenty of revenue derived from not doing so.[36]

An obvious conflict arises as EGM’s are the largest source of gaming revenue for state governments, despite 70-75 per cent of the population not playing them.

Australia’s State and Federal Governments justify regulated gambling through insistence that the benefits outweigh the risks; however, this has not proven to be the case.

Reasons given for resistance to reform are predicated on the mistaken belief that problem gambling effects a small minority of gamblers, and is attributable to individual players rather than the machines. [37]

These beliefs are factually inaccurate, as approximately 15-25% of regular EGM gamblers have been found to be problem gamblers,[38]whereas only 0.6% of gamblers overall are problem gamblers, so a clear causal relationship exists.[39]

85 per cent of problem gamblers identified in a 2003 Victorian prevalence survey lost their money on EDMs, and 40- 60% of state gaming revenue is likely to be sourced from problem gamblers.[40]

Problem gambling has been repeatedly been shown to be disproportionately burdensome for those less socially and economically fortunate.[41]

As the government is unable to effectively legislate reform relating to EGMs, it falls to the courts to provide relief.

Under common law in Australia is generally understood that no specific duty in negligence is owed to problem gamblers.[42]

This was found to be the case in Reynolds, Kakavas, and Foroughi.

The NSW Court of Appeal in Reynolds found that economic loss occasioned by gambling should not be accepted as a form of loss for which the law permits recovery, except in ‘exceptional circumstances’.[43]

In that case it was advised that a duty of care should not be recognised as the loss occurred following a ‘deliberate and voluntary act on the part of the person to be protected’.[44]

However given EGMs are proven to effectively deprive players of the ability to exercise control over their own actions, this leaves open the possibility that the latest findings on EGM effect create an “extraordinary case”. As the definition of “extraordinary” is not yet clear in relation to a duty owed to those experiencing gambling disorders, it is entirely possible a claim of negligence occasioning psychiatric harm could be a successful vehicle for desperately needed reform. It is also clear that the creation, and continued use of design elements that cause addiction are conduct amounting to victimisation, exploitation, and are unconscionable.[45]

Also genuine psychiatric harm caused by EGMs will be distinguished from Kakavas, as Mr Kakavas did not suffer from a continually operating compulsion to return to the casino.[46]

In Foroughi v Star City Pty Limited, [30] Wood CJ acknowledged that Court has a role in not stifling the development of negligence tort, ‘merely because no category of case of this kind has been recognized in this country’.[47]

Regardless of whether a duty is owed for economic loss, psychiatric harm caused by EGMs is a strong contender for eliciting duty. While the risk of losing in a game of chance is an ‘obvious risk’ as per s31(1) Civil Liability Act, the risk of losing one’s mental functioning is not, at least not to the average person.

 

As “gambling disorders” are now recognised in the DSM-5 as a substance addiction,[48] I believe this satisfies the criteria set out in the Ipp review (2002),[49] that claims for compensation for pu.re mental harm the harm must be a ‘recognised psychiatric illness.’

I intend to prove on the balance of probabilities that while losing money is an inherent risk from gambling, as pointed out by Spigelman CJ in Reynolds;[50] losing one’s mental functioning as a consequence of a gambling disorder is not.

Indeed there is strong evidence that EGMS have a causal link with the gambling disorder, and evidence in support of this existed prior to the 2010 Productivity Commission Report.

Given that multiple governments on both the State and Federal level have failed to adequately protect the community from these effects, while at the same time profiting immensely from them, it falls to the courts to balance the scales of justice once more. Our friends and family can prove they suffer from gambling disorder, that it seriously affects their ability to make a rational judgment as to his or her own best interests; and given the excessive proof of a predatory state of mind on the part of the Gaming Machine industry, it’s well past time action was taken.

I believe that a Duty is owed to the ordinary Australian’s who have been afflicted with a “gambling disorder” simply by playing EGMs.

I believe that for the gaming industry as a whole, from clubs and pubs, to casinos, regulators and manufacturers; the risk was foreseeable, not insignificant; and a reasonable person in the position of gaming machine operators should have taken precautions.

Intervention is required, as our friends and family can prove they suffer from gambling disorder, that it seriously affects their ability to make a rational judgment as to his or her own best interests; and given the excessive proof of a predatory state of mind on the part of the Gaming Machine industry.

 

[1]Australian Gambling Statistics, 32nd Edition, 1989–90 to 2014–15 and historical editions

[2] Sally M. Gainsbury et al, “Recommendations For International Gambling Harm-Minimisation Guidelines: Comparison With Effective Public Health Policy” (2013) 30(4) Journal of Gambling Studies.

[3] Australian Gambling Statistics, 30th edition, Queensland Government Statistician’s Office, Queensland Treasury and Trade. < http://www.qgso.qld.gov.au/products/reports/aus-gambling-stats/aus-gambling-stats-30th-edn-summary-tables-2012-13.pdf&gt;.

[4] R. Collier, “Do Slot Machines Play Mind Games With Gamblers?” (2008) 179(1) Canadian Medical Association Journal. 23–24.

[5] Paul Delfabbro, “Australasian Gambling Review” (Independent Gambling Authority of South Australia, 2008).

[6] Productivity Commission. (1999). Australia’s gambling industries: Final report. Canberra, Australia: Commonwealth of Australia. 13

[7] Ibid. p 14

[8] Benjamin L. Wilkes, Craig J. Gonsalvez and Alex Blaszczynski, “Capturing SCL And HR Changes To Win And Loss Events During Gambling On Electronic Machines” (2010) 78(3) International Journal of Psychophysiology, 265–272.

[9] Thomas Ricketts and Ann Macaskill, “Gambling As Emotion Management: Developing A Grounded Theory Of Problem Gambling” (2003) 11(6) Addiction Research & Theory, 383–400.

[10] Brigitte Wanner et al, “Flow And Dissociation: Examination Of Mean Levels, Cross-Links, And Links To Emotional Well-Being Across Sports And Recreational And Pathological Gambling” (2006) 22(3) Journal of Gambling Studies, 289–304.

[11] Charles Carver and Micheal Scheier, “On the Self-Regulation Of Behavior” (Cambridge University Press, 1998).

[12] Alex Blaszczynski, Robert Ladouceur and Crawford Moodie, “The Sydney Laval Universities Gambling Screen: Preliminary Data” (2008) 16(4) Addiction Research & Theory, 401–411.

[13] John O’Connor and Mark Dickerson, “Impaired Control Over Gambling In Gaming Machine And Off-Course Gamblers” (2003) 98(1) Addiction, 53–60.

[14] Ibid.

[15] R. Collier, “Do Slot Machines Play Mind Games With Gamblers?” (2008) 179(1) Canadian Medical Association Journal, 23–24.

[16] Mark Griffiths, “Fruit Machine Gambling: The Importance Of Structural Characteristics” (1993) 9(2) Journal of Gambling Studies, 133–152.

[17] Nicki Dowling, David Smith and Trang Thomas, “Electronic Gaming Machines: Are They The ‘Crack-Cocaine’ Of Gambling?” (2005) 100(1) Addiction, 33–45.

[18] Charles Carver and Micheal Scheier, On The Self-Regulation Of Behavior (Cambridge University Press, 1998).

[19] Alex Blaszczynski, Robert Ladouceur and Crawford Moodie, “The Sydney Laval Universities Gambling Screen: Preliminary Data” (2008) 16(4) Addiction Research & Theory, 401–411.

[20] Mark G. Dickerson et al, “Estimating The Extent And Degree Of Gambling Related Problems In The Australian Population: A National Survey” (1996) 12(2) Journal of Gambling Studies, 161–178.

[21] John O’Connor and Mark Dickerson, “Impaired Control Over Gambling In Gaming Machine And Off-Course Gamblers” (2003) 98(1) Addiction, 53–60.

[22] Sally M. Gainsbury et al, “The Prevalence And Determinants Of Problem Gambling In Australia: Assessing The Impact Of Interactive Gambling And New Technologies.” (2014) 28(3) Psychology of Addictive Behaviors, 769-779.

[23] R. Collier, “Do Slot Machines Play Mind Games With Gamblers?” (2008) 179(1) Canadian Medical Association Journal, 23–24.

[24] Productivity Commission. (1999). Australia’s gambling industries: Final report. Canberra, Australia: Commonwealth of Australia.

[25] Productivity Commission. Gambling. Canberra: Australian Productivity Commission; 2010.p16.

[26] Julie Lahn, “Gambling Among Offenders: Results From An Australian Survey” (2005) 49(3) International Journal of Offender Therapy and Comparative Criminology, 343–355.

[27] Warfield et al, 2008, ‘Gambling motivated fraud in Australia: 1998–2007’, <http://www.warfield.com.au&gt;

[28] American Psychiatric Association, (2013) ‘Diagnostic and statistical manual of mental health disorders: DSM-V’ (5th ed.) Washington DC, American Psychiatric Publishing.

[29] M. B. Walker, ‘The seductiveness of poker machines’, (2003)16 Gamble, 52–66.

[30] Gerda Reith, “Gambling And The Contradictions Of Consumption” (2007) 51(1) American Behavioral Scientist, 33–55.

[31] Charles Livingstone and Richard Woolley, “Risky Business: A Few Provocations On The Regulation Of Electronic Gaming Machines” (2007) 7(3) International Gambling Studies, 361–76.

[32] First report: “the design and implementation of a mandatory pre-commitment system for electronic gaming machines”,  <http://www.aph.gov.au/binaries/senate/committee/gamblingreform_ctte/precommitment_scheme/report/report.pdf&gt;

[33] Alex Blaszczynski, et al, (2001). ‘The Assessment of the Impact of the Reconfiguration on Electronic Gaming Machines as Harm Minimisation Strategies for Problem Gambling. A Report for the Gaming Industry Operators Group’, Sydney: The University of Sydney Gambling Research Unit; Alex Blaszczynski, et al (2005). ‘Structural Characteristics of Electronic Gaming Machines and Satisfaction of Play Among Recreational and Problem Gamblers’, International Gambling Studies, 5, 187-98; K. Eggert, (2004) ‘Truth in Gaming: Towards Consumer Protection in the Gambling Industry’, Maryland Law Review, 63, 218-286.

[34] Yucel Murat, “Neuroscience In Gambling Policy And Treatment: An Interdisciplinary Perspective” (2017) 4(6) The Lancet Psychiatry, 501-506.

[35] Kevin A. Harrigan, “Slot Machine Structural Characteristics: Creating Near Misses Using High Award Symbol Ratios” (2007) 6(3) International Journal of Mental Health and Addiction, 353.

[36] Peter J Adams, “Gambling, Freedom And Democracy”, (Routledge, 2012), 4-6.

[37] Charles Livingstone and Richard Woolley, “Risky Business: A Few Provocations On The Regulation Of Electronic Gaming Machines” (2007) 7(3) International Gambling Studies, 361–76.

[38] Productivity Commission. Gambling. Canberra: Australian Productivity Commission; 2010.

[39] Planzer S, Gray HM, and Shaffer HJ: Associations between national gambling policies and disordered gambling prevalence rates within Europe. Int J Law Psychiatry 2014; 37: pp. 217-229.

[40] Productivity Commission. Gambling. Canberra: Australian Productivity Commission; 2010.

[41] Productivity Commission. Gambling. Canberra: Australian Productivity Commission; 2010.

[42] Sarah Hinchcliffe, (2008), ‘Gambling — An Update on Duty of Care in Victoria’, 5 Macquarie Journal of Business, 87-91.

[43] Reynolds (2001) 53 NSWLR 43, 45 per Spigelman CJ.

[44] Reynolds (2001) 53 NSWLR 43, 46 per Spigelman CJ.

[45] Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462 per Justice Mason.

[46] Kakavas v Crown Melbourne Ltd [2013] HCA 25 at [23]-[29].

[47] Foroughi v Star City Pty Limited (2007) 163 FCR 131.

[48] American Psychiatric Association, (2013) ‘Diagnostic and statistical manual of mental health disorders: DSM-V’ (5th ed.) Washington DC, American Psychiatric Publishing.

[49] Commonwealth of Australia, Review of the Law of Negligence, Final Report, Canberra, September 2002 (the Ipp Report), 135.

[50] Reynolds (2001) 53 NSWLR 43, 45 per Spigelman CJ.

 

 

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