Introduction

As a child, I regularly visited Canterbury League Club with my family. It was close to home, offered good, cheap food, and had multiple flatscreen televisions much larger than the outdated one in our living room, which made watching sport a far more entertaining and exciting experience. Visiting always felt like a special treat, an opportunity to not only eat out but also to spend time in a place that was more grand and glamorous than any other I knew at that age. I remember the excitement I felt on arriving and seeing the huge entrance garden, the disappointment I felt on leaving, and the many times I wished we were going there for dinner instead of eating at home.

Back then, I knew nothing about why Canterbury League Club was so grand and glamorous; nothing of the hundreds of poker machines on the floor just above where my family and I ate and cheered on our favourite rugby league team.

Back then I knew nothing about poker machines, period. But that has since changed.

With their playful looks, poker machines could, to the uninformed eye, be easily mistaken for new-age arcade video games. But looks, as they say, are deceiving. Far from childish entertainment, Australia’s poker machines are one of the most intense forms of gambling available in the world, radically different from the fruit machines offered in pubs in the United Kingdom or the pachinko machines in Japan. They accept high-denomination banknotes (except in South Australia, where they still only accept coins), can be loaded up with thousands of dollars in a moment, can be played once every couple of seconds, offer enormous jackpots reaching into the tens of thousands of dollars, and — depending on which Australian state or territory they’re located in — allow maximum bets of either $5 to $10 per spin. If played at their maximum bet and maximum speed, they are easily capable of consuming between $600 to $1,200 in a single hour.

Across Australia, there are approximately 193,000 poker machines. That’s one machine for every 120-odd people, which, excluding casino destinations such as Macau or Monaco, is the highest per-capita rate in the world. But their abundance in Australia isn’t the only thing that is unusual by world standards. So, too, is their accessibility.

In other places where Australian-style poker machines are legal, they are largely restricted to their natural habitat: a casino. In Australia, however, the vast bulk of poker machines are spread throughout local pubs and clubs. They are advertised in New South Wales — because of advertising restrictions in the state — by euphemistic signs like ‘VIP Lounge’, ‘Royal Lounge’, Players Lounge’, and in other states by more direct ones that simply read ‘POKIES’.

Australia’s two supermarket giants have a large stake in poker machines. Woolworths is the majority owner of the Australian Leisure and Hospitality Group, which owns around 400 hotels and clubs across Australia, and around 12,000 poker machines. This makes Woolworths the single largest operator of poker machines in Australia. Coles’ stake in poker machines is smaller but still significant. Its parent company at the time of writing, Wesfarmers, owns 89 hotels and over 3,000 poker machines.

According to the Productivity Commission’s 2010 report into the national gambling industry, only a minority of Australians — around 25 per cent — play a poker machine once in any given year. Those who play poker machines regularly — that is, once a week or more — account for only 4 per cent of the adult population.

But this low popularity does not correlate to the machines’ low profitability. In fact, poker machines are the lifeblood of Australia’s enormously profitable gambling industry. Of the $23.6 billion spent gambling in 2015–16 — the highest per capita amount spent anywhere in the world — $12.1 billion, or over $600 per adult, was poured through poker machines.* If current trends continue, this figure can be expected to grow in coming years. It was up from $11.5 billion in 2014–15 and $11 billion in 2013–14.

[* This expenditure is only for the amount gambled on pokies in clubs and pubs, not in casinos, where the data is not disaggregated for government reporting purposes. In 2015–16, $5.2 billion was lost in casinos. Poker machines account for an estimated 30 per cent of casino revenue.]

For context, in 2015–16, $2.9 billion of Australia’s total gambling losses were spent on racing, while $920 million were spent on sports betting.

Annual losses in New South Wales, where around half the country’s poker machines are found, are highest at around $1,000 per adult, and lowest in Tasmania at around $300 per adult. But while per-adult losses have dropped in recent years, per-gambler losses across most states have either remained steady or increased, suggesting that those who continue to gamble on poker machines are spending and losing more. As documented by gambling researchers associate professor Martin Young and Francis Markham, per-gambler losses on poker machines in New South Wales and Victoria are around $3,500; in the Australian Capital Territory, around $3,000; in South Australia, around $2,500; in Queensland and the Northern Territory, around $2,000; and in Tasmania, around $1,600.

Poker machines are regularly described by their manufacturers and operators — as well as by some politicians and some of the general public — as ‘entertainment’, akin to movies, video games, and television shows. This is an appropriate description for some who play them; many gamblers I spoke with in gambling venues told me they played poker machines ‘for the thrill’, ‘for a bit of fun’, or ‘to pass the time’. But for other players, poker machines are far from a harmless form of entertainment: they are more like a destructive drug.

Quantifying the exact number of gambling addicts in Australia is impossible, but there are reliable estimates, the most reliable of which comes from the Productivity Commission. In its 2010 report, it estimated that there were 115,000 people suffering from a gambling addiction, and a further 280,000 at risk of becoming addicted.

Poker machines, the commission found, were the culprit in 75 to 80 per cent of these cases. ‘Different gambling forms pose varying risks for people, with gaming machines posing the greatest problems,’ the commission wrote. The commission also reported that 15 per cent of regular poker machine players experienced some harm from their gambling, that gambling addicts accounted for an estimated 41 per cent of total expenditure, and that those at risk of becoming addicted accounted for a further 19 per cent of total expenditure. It said these figures were backed by ‘robust and persuasive’ evidence.

The commission also responded to suggestions by some segments of the gambling industry that the small number of gambling addicts in Australia meant the social-policy significance of the issue was also small. ‘Small population prevalence rates do not mean small problems for society,’ it said. It also reminded those within the industry that the annual number of people admitted to hospital for traffic accidents and the annual number of people who use heroin was lower than the number of estimated gambling addicts.

The commission highlighted the key flaw with the argument that small adult prevalence rates meant that the social-policy significance of gambling addiction was also small: it failed to consider the ripple effects of the issue. Like all public-health issues, gambling addiction harms not only the individual directly involved, but also their family, friends, colleagues, and the broader Australian community in a multitude of ways. It has been estimated that for every gambling addict, a further seven people are affected. On top of the real money losses associated with gambling addiction are family breakdown; family violence; neglect of responsibilities at home; emotional and psychological distress; health problems arising from heightened stress and anxiety; reduced performance at work; bankruptcy; criminal activity; and suicide.

Accounting for all of this, the Productivity Commission estimated the total annual cost of gambling at between $4.7 billion and $8.4 billion. This made gambling addiction comparable in size to other major public-health issues. As the Victorian Responsible Gambling Foundation wrote in 2016, it is an issue ‘on a similar order of magnitude to major depressive disorder and alcohol misuse and dependence’.

Even more alarmingly, it is an issue that disproportionately harms Australia’s poorest and most vulnerable. This is for a simple reason: poker machines and the losses incurred on them are concentrated in some of Australia’s most disadvantaged local-government areas. Fairfield in Sydney’s west is the worst example of this: in 2014–15, the 3,000-plus machines located there had a turnover of over $7 billion, making it the poker machine capital of the country.* Another example is Brimbank in Melbourne’s west, where, in the same year, gamblers lost over $143 million on 1,000-odd machines. A large portion of people in both of these areas — and there are many more that could be listed as examples — have low income, no qualifications, poor English skills, and work in low-skilled occupations.

[* As distinct from actual losses, which are not publicly released by the New South Wales government.]

Interestingly, the reverse is also true: areas of advantage suffer the least amount of gambling-related harm precisely because they have the least number of poker machines. The 109 machines in Kuringai in Sydney’s north recorded only $60 million in turnover in 2014–15, while the 213 machines in Boorondarra in Melbourne’s north-east recorded losses of only $20.8 million.

This makes the problem of poker machines and the harm they cause an even more pressing one. As gambling researchers from Monash University and RMIT University wrote in a 2012 paper examining the relationship between socioeconomic disadvantage and the concentration of poker machines, ‘It appears that current EGM arrangements place a disproportionate burden of cost on the most disadvantaged in the community, thus entrenching and exacerbating inequality.’

The industry is far more interested in promoting the entertainment, employment, taxation, and community benefits of gambling than its associated costs. And it is true that there are some benefits to gambling: the Productivity Commission estimated the net benefit of Australia’s gambling industry at between $3.7 and $11.1 billion.

But the commission noted that the benefits of gambling to Australian society are not as clear-cut as they’re often made out to be. Take the social contribution of gambling venues, particularly clubs. The commission acknowledged that these venues do contribute socially, but also noted that the ‘benefits are to members, not to the public at large’; that ‘the claimed benefits of gambling revenue on sporting activities and volunteering do not appear strong’; and that ‘the (gross) value of social contributions by clubs is likely to be significantly less than the support governments provides to clubs through tax and other concessions’.

Employment is another example. The commission found that the industry employs a high number of people, but it also asked a crucial question about this: ‘Would the bar and gaming staff, accountants, entertainers and cooks employed in the gambling industry be unable to find a job in the absence of the gambling industry?’

The short answer the commission gave was, ‘No.’ Most of those employed in the industry, it said, ‘are highly employable and would be in demand in other parts of the service sector were the gambling industry to contract. In that sense, the gambling industries do not create net employment benefits, because they divert employment from one part of the economy to another.’

The industry might argue otherwise, but another argument made by the commission is difficult to dispute. In summarising the overall costs and benefits of gambling, it said, ‘the net benefits could be much larger if governments reduced the costs through effective harm minimisation and prevention policies.’

Right after turning eighteen, I remember ‘having a slap’ with mates at pubs on some of our first nights out as legal adults. We would often impersonate the sombrero-wearing Mexican character featured in the More Chilli game, screaming out his catchphrase, ‘Mooooorrrrreeeee Chilli’, to each other as a joke.

But I never took a huge liking to poker machines. I thought they were as boring as playing tennis by yourself — only they were much more expensive. I gave very little thought to them, and even less to how they came to be on almost every street corner in Australia in venues built for the gathering of friends, families, and entire communities — and whether this was in any way unusual. I accepted them as a normal a feature of a pub or club, like the bar, bistro, or bathroom.

Others are as indifferent today as I was back then. When I asked the manager of one Sydney pub whether he thought the ubiquity of poker machines in Australia strange, he said, ‘It’s a really good question. I’ve never thought about it. I guess it’s just one of those traditions from the past.’

The practice of gambling extends far back into Australia’s past. As Dr Helen Breen from Southern Cross University has detailed, even prior to the British invasion of 1788, a small number of Indigenous Australians along the northern coastline played and bet on cards — a practice believed to have been inherited from Macassan traders in the seventeenth century. The nature of gambling among the early convicts and settlers was far more extreme. Without other forms of organised entertainment, they amused themselves and escaped the harsh realities of their new lives in an alien land by betting on everything from cards, dice, backgammon, billiards, two-up, sack races, wheelbarrow races, horse races, cricket matches, football matches, and walking matches, to more brutal, bloody contests such as boxing, bull-baiting, dog fights, and cock fights. Historian John O’Hara writes in A Mug’s Game: a history of gaming and betting in Australia that between 1820 and 1850, gambling had ‘won acceptance’ in Australia and was ‘able to establish its position as a common and even normal activity’.

But while gambling has a long history in Australia, poker machines became a part of social life relatively recently — far too recently for them to be called a ‘tradition’. The story of Australia’s poker machines begins in New South Wales.

Poker machines — or ‘one-armed bandits’, as they were once nicknamed because of their original pull-handle design and remarkable ability to separate people from their cash — first appeared in Australia in Sydney’s clubs and hotels soon after they had been invented in the United States in the late nineteenth century. Clubs at that time were replicas of British metropolitan gentleman’s clubs — elite, prestigious institutions established specifically to promote professional, intellectual, artistic, or sporting interests. Small in size, their membership was exclusive, they commanded high fees, and, in some cases, they required a referral from an existing member.

The legal status of poker machines was unclear until 1921, when the state’s Supreme Court ruled that their operation contravened the Gaming and Betting Act 1912. There was, however, some ambiguity in this ruling: it related to the operation of a poker machine by an individual hotelier, not by a not-for-profit organisation such as a club. Consequently, poker machines stayed in place — and were tolerated by police — throughout the city’s clubs.

Ten years after the Supreme Court ruling, machine manufacturers presented an enticing scheme to the government: if it allowed poker machines in hotels, just under half the profits would be set aside for hospitals. The government agreed to a two-month trial, but allegations of bribery and corruption soon surfaced, prompting the 1932 New South Wales Royal Commission into Greyhound Racing and Fruit Machines. The commissioner found that government officials had indeed acted corruptly, and declared the operation of poker machines illegal in all venues.

Despite this, clubs continued running poker machines illegally, and police continued turning a blind eye to them. In 1939, there were around 2,500 machines still in use across clubs in New South Wales.

By that time, the nature of clubs had changed significantly since their inception. They had become more egalitarian, accommodating a much broader demographic customer base than just the elite. The diversification coincided with deteriorating conditions in the state’s hotels, caused largely by the government having enacted a 6.00pm closing time in 1916. This attempt to curb public drunkenness had had the opposite effect. It encouraged rapid drinking in the hour before close — known as the ‘six o’clock swill’ — and resulted in publicans replacing dining and entertainment areas to make space for the tsunami of thirsty post-work drinkers.

These factors led to clubs — which were cleaner, offered better facilities, and were allowed to trade beyond 6.00pm — becoming the new favoured haunts for social drinkers. Unsurprisingly, hotels suffered and grew incensed at the unequal government treatment that provided clubs with a significant competitive advantage.

So incensed were the hotels that, in 1956, the association representing them, the United Licensed Victuallers’ Association (ULVA), lodged an objection in the New South Wales Licensing Court against the renewal of one club’s liquor licence on the basis that the club was illegally operating poker machines. The ULVA’s objection was successful, as it was in a further 47 cases.

This new development forced the state Labor government led by Joseph Cahill to finally choose between universally enforcing the law and removing poker machines from clubs as well as hotels, or amending the law and legalising their use in clubs. Successive delegations of club representatives lobbied intensively for legalisation. They claimed that outlawing poker machines would destroy the club sector, and cause the loss of over 2,000 community jobs and countless community facilities. Legalisation would have the added benefit, they said, of raising state revenue through the introduction of a licence fee for every machine.

Hotels protested, as did the churches on moral grounds, but the clubs swayed the government. On 22 August 1956, New South Wales became only the second jurisdiction in the world after Nevada in the United States to legalise poker machines. As the club industry had suggested, a licence fee for each machine was introduced and was to be deposited directly into a hospital fund.

At the time, an editorial in The Sydney Morning Herald said the decision to legitimise poker machines came as ‘no surprise’, was ‘realistic and reasonable’, and would ‘dissipate an unhealthy and hypocritical attitude which has been allowed to persist for far too long: non-enforcement of the law against a gambling device which in the past has been held to be illegal.’ The decision to tax poker machines, however, was ‘a horse of another colour’ which would see government dependence on gambling revenue increase and create the possibility of government ‘turning from toleration to outright encouragement of gambling.’

‘It is probably a pity that poker machines were ever allowed into this State,’ the editorial concluded. ‘Other States, after all, seem to get on very well without them. But the fact of their presence can no longer be ignored. In future, so long as they are confined to non-proprietary clubs and are not allowed to be used for private gain, they are unlikely to bring any further unsuspected evils in their wake.’

Following legalisation, there was a rapid expansion of clubs and the number of poker machines operating in New South Wales. Between 1954 and 1962, the number of clubs increased by over 200 per cent, and the number of poker machines nearly doubled to just under 11,000. Thanks to money earned from their new gambling facilities, clubs improved even more, and took an ever larger portion of the hospitality dollar away from the hotels.

Poker machines were still illegal in every other state and territory. Consequently, New South Wales’ clubs, especially those on the borders, became popular destinations for residents of Queensland, Victoria, the Australian Capital Territory, and South Australia wanting to try their luck on the flashy new devices. Demand was so high that there were daily interstate bus tours to some clubs in New South Wales.

New South Wales remained the only place in Australia where poker machines could be legally played for the next two decades. But then, in 1976, the ACT government introduced them into its clubs. Given the ease with which territory residents could jump across the border, prohibition was not only nonsensical, but it was also resulting in massive amounts of potential taxation revenue leaking into New South Wales.

A general trend towards deregulating gambling was occurring nationwide around this same time. In 1973, Australia’s first-ever casino was opened at Wrest Point in Hobart. Other governments followed suit; by 1985, casinos were operating in Queensland, Western Australia, South Australia, and the Northern Territory. But despite a growing acceptance of gambling, as well as the best efforts of the club lobby to have poker machines legalised elsewhere, they remained outlawed in all other Australian jurisdictions.

However, continuing budgetary woes forced the states to reassess their prohibitionist position. These woes had begun in the 1970s when Commonwealth funding to the states had been drastically reduced by the federal government under Malcolm Fraser to help fix the national debt and crippling inflation: between 1976 and 1982, state funding dropped from 11.2 per cent of total GDP to 9 per cent.

In response to this, and to continued industry pressure, the Victorian government commissioned a report in March 1983, to be completed by Murray Wilcox QC, assessing whether Victoria should legalise the operation of poker machines in community venues. Wilcox’s recommendation, based largely on the situation in New South Wales, was unequivocal. He said that while introducing poker machines would generate significant revenue for operators and the government, and would have some positive employment effects, these benefits would be outweighed by three major consequences: poker machines would lead to an increase in crime; businesses such as restaurants and cafes that were unable to operate poker machines would be adversely affected; and social problems would increase, because people would gamble beyond their financial capacity.

‘Taken singly,’ Wilcox wrote, ‘each one of these objections represents a powerful argument against the legalisation of poker machines in Victoria. Considered together, the case is overwhelming.’

Wilcox’s report guided the gambling policy of Victoria and other states in the immediate years after its release. But over the next decade, calls to introduce poker machines grew ever louder as the economic woes of the states and territories worsened. The Hawke–Keating government continued what Fraser’s had begun, and by 1994 Commonwealth funding to the states had dropped from its 1982 level to 7.3 per cent of GDP. The situation was made worse in Victoria with the collapse of its state bank and the Pyramid Building Society in 1990, leaving the state with billions of dollars in public debt. The situation was equally bad in South Australia; in 1991, its state bank also collapsed.

These dire financial conditions, plus the persistent industry lobbying, the global ascendancy of neoliberalism, with its emphasis on deregulation and the sovereign consumer, and the rise of pro-gambling governments in several states resulted in the lantana-like proliferation of poker machines in the last decade of the twentieth century. Victoria and Queensland legalised them in clubs and pubs in 1991, followed a year later by South Australia. Tasmania did the same in 1993, as did the Northern Territory in 1996. In 1997, the New South Wales Labor government also buckled to decades of pressure, and finally allowed hotels to operate poker machines.

Only Western Australia held firm against the march of poker machines across the country, with the government there only allowing poker machines — and a much less intense variety than those found elsewhere in Australia — in the state’s one and only casino. Indeed, political resistance to introducing poker machines into community venues in the state remains as strong as ever. In June 2016, with rumours circulating that the state government might be considering reversing its stance, then-Liberal premier Colin Barnett said, ‘There will be no poker machines in Western Australia — that’s not going to happen.’

It was around three years ago, as I became more aware of the widespread social harm caused by poker machines, especially in some of Australia’s most disadvantaged areas, that concern began to replace my earlier indifference about them. Reading the regular news stories about the amount of money lost each year, and the people from whose pockets this money came, was shocking.

In May 2015, I headed down to The Star casino in Sydney. Not having visited the casino before, I wanted to see for myself what it was like inside. I was stumped for stories to write at the time, and thought I might get lucky and find one hidden there.

I did indeed get lucky. That day, I found at the casino a young man of about 30 years, dressed in his work clothes, an electronic access card attached to a lanyard hanging around his neck, feeding $50 notes into poker machines at an average interval of two minutes, one after the other. I introduced myself and, with a shrug that said, Sure. I couldn’t care less, he allowed me to shadow him as he gambled. He seemed devoid of any dignity, and was unbothered by my presence.

In the three hours we spent together, he lost over $1,700. I learnt that he only ever gambled on poker machines; that when he started gambling years before it was all just a bit of fun and that he’d been able to control his spending; and that on this day he had lied to his wife about going to work and had instead dashed off to the casino.

As he stood up to leave, I asked him where he was going. ‘Off to meet my wife before she gets off work,’ he said.

A week later, I tried ringing him to see how he was faring after losing so much, and whether he would like to share more about his life and gambling history. He didn’t answer, so I left a message. Two days later, having not heard back, I called again, to no avail. I rang again the following week, only to be told by an automated message that the number had been disconnected.

I never heard from or saw this man again. I still think about him to this day.

I wrote a story about him and our afternoon together for The Saturday Paper, but as I gave more thought to the issue of gambling and poker machines, and began researching further, I smelt the blood of a much bigger story than the one I had written. I quickly realised that this story was as urgent as it was overdue.

The book in your hands tells this story.

It tells of what it’s truly like to battle through life with a gambling addiction; of what it’s like to be in a relationship with someone who is heavily addicted to poker machines; of the inner workings of poker machines and the insidious goal of designers to encourage repeat, faster, and higher-intensity gambling; of the growth of online poker machines; of how poker machines exploit psychological and biological vulnerabilities innate in all humans; of the token efforts made by both the gambling industry and governments across the country to reduce gambling-related harm; of the industry’s connections in politics and academia; of how what were once community clubs have metamorphosed into gambling centres that can hardly be seen to be responsibly or effectively tackling the issues of social isolation and loneliness that many Australians, especially those in regional areas, experience; of those venues bucking the national trend and aiming to foster a stronger community by ridding themselves of poker machines and offering alternative forms of leisure that are less harmful and more nourishing; of the lack of moral culpability of those who work in the industry; and of the continuing efforts of advocates who are fighting the gambling industry and its protectors in politics to try to initiate meaningful reform.

The book travels from poker machine lounges in clubs and pubs across the country, to Parliament House in Canberra, to small towns and some of the most disadvantaged areas that are saturated with poker machines, to the Federal Court of Australia in Melbourne, and all the way to Macau where, each year, the newest poker machines on the market are showcased. It conveys testimony from addicts and their families from across Australia; social workers; gambling experts; gambling counsellors; psychologists; world-leading neuroscientists; bartenders; club-industry personnel; designers who have worked for some of the largest poker machine manufacturing companies; council mayors; one of the leading industry representatives in Australia, Ross Ferrar; federal politicians and ex-politicians such as Nick Xenophon, Andrew Wilkie, and Rob Oakeshott; and high-profile community advocates such as Tim Costello and Tim Freedman.

The picture that emerges is deeply disturbing. It shows an industry that, without any moral qualms, designs and purveys an addictive product which it knows causes great harm, and governments across Australia doing little to address — and in some cases even exacerbating — the problem. It’s a picture that is very similar to the one painted by earlier investigations into the tobacco industry.

But the picture also reveals that change is happening. And if this continues, the question of whether poker machines in Australia will suffer a similar fate to tobacco is less one of ‘if’ and more one of ‘when’.

I became close with one gambling addict, in particular, in the course of writing this book. I found this man through the St Vincent’s Gambling Treatment Clinic in Sydney where he was a patient. With the permission of the clinic’s management, I left a flyer in the waiting room explaining the book I was working on and my wish to speak with people suffering or recovering from a gambling addiction. This man was the first to respond.

When we met two weeks later in the clinic’s waiting room, he was nervous. He bounced his knee and picked at the skin around his fingers like one does before a terrifying exam. He made fleeting eye contact; for the most part, he looked down at the carpet. I was worried for him. I felt, as journalists often do, like an insensitive intruder.

I made it clear to this man that it was fine if he no longer wished to speak with me and would rather that I leave. After a moment of heavy silence, he looked up, met my eyes, and said, ‘It’s fine. You know it’s this taboo topic, poker machines, and there are a lot of people who are addicted to them. I hope I can help them by talking to you.’

I met with this man regularly over the next year as he battled with his gambling addiction. He allowed me to sit in on many of his counselling sessions, and shared harrowing details of his life and his experience of gambling that often brought him — and me — to tears. In his physical appearance, however, there was nothing at all that spoke of his pain and suffering — a fact he was keenly aware of. Speaking about gambling addiction, he once told me, ‘It’s an invisible illness in our community. You’ve got no way of knowing who has a problem. You cannot see it from the outside. I mean, look at me.’ He gestured at the collared shirt, jeans, and black shoes he was wearing. ‘Look at the clothes I’m wearing tonight. I’m not big-naming myself; I’m just saying that do you think the average person would look at me and go, “He’s a problem gambler”? Of course not. That’s the point.’

This man is like thousands of other Australians who have been unable to ignore the siren song of poker machines, goading them to always have just one last spin.

His name is Doug.