Poker machines: why do we even have them?

I’m loath to refer to this as a piece in support of poker machines (electronic gaming machines, slot machines, fruit machines, pokies, call them what you will), but this will largely be interpreted as such because it’s not a scathing criticism. However, it’s more a collection of thoughts and things to think about when composing scathing criticisms of poker machines. So here goes.

(And before we start, full disclosure: I am employed by a large club in Sydney, my knowledge of gaming and gaming machines is technical and extensive, and I have worked in the gambling industry (in clubs and casinos in Australia and overseas) since 2005.).

First I’ll acknowledge that problem gambling exists and is a problem, and I don’t think anyone is doing enough to tackle it, and a lot of harm can be attributed to problem gambling involving poker machines. A huge amount of money goes through poker machines in NSW, and very few players win in the short-term – even fewer in the long-term.

All of that said, it’s important that we have legal and regulated gambling. We have to – both from a personal liberty perspective (people should be allowed to do whatever the like with their own money), and from a harm minimization perspective (the alternative to legal, regulated gambling is illegal, unregulated gambling – underground casinos, dog fights and cock fights, underground poker games bankrolled by loan sharks). We can’t totally prevent problem gambling and the harm that comes from it, but we can try to minimize it, which is why regulation is important.

Regulation and monitoring

Poker machines are easy to regulate and easy to monitor. Really easy. Every legally operated poker machine in NSW has a unique serial number; the regulator knows where every single one is, who is operating it and what software is installed on it. The software goes through an approval process. Every legally-operated poker machine in NSW is connected to the Central Monitoring System (CMS) and has to be by law – if there are any problems with communication to the CMS, the machine can’t be operated until communication is restored. Whether the regulation is good enough, the enforcement is good enough, compliance is good enough are other issues, but that they are so so simple to regulate and monitor makes them really attractive to gambling regulators.

Because of the process of getting poker machine software from development to market, poker machines are really difficult to compromise. In short you can’t bribe a poker machine. You can’t cheat. Unlike in casinos and bookmakers, staff can’t be bribed or assist with cheating, payouts can’t be miscalculated. Everything is legit. So they are attractive to operators, players, and regulators, all of whom can trust them.

Low-risk gambling

With the usual acknowledgement that some people’s lives are destroyed through gambling, for most people poker machines provide access to gambling (a legitimate leisure activity) in a low-risk and low-cost way. People who set and stick to limits don’t lose more than they can afford, and the range of machines and games available mean that even very low limits can provide genuine entertainment value, decent time playing, and the thrill of a potential win. And poker machines combine three things that other forms of leisure gambling can’t: low entry price, high prize potential, instant win. Some examples:

  • Casino games offer instant wins and high prize potentials, but the entry prices are high – most people cannot afford to play casino games.
  • Racing and sports betting offer the potential of instant wins with a low entry price, but large prize potentials don’t exist without large bets.
  • Lotteries offer large prizes at a low entry price, but generally can’t offer instant wins.

I’m sure many people consider this a bad thing; I don’t. I just consider it a thing. Lots of people want to experience the thrill of gambling, the potential to win a large prize with an instant payoff, and at a low entry price, and poker machines offer that. I am certainly not going to tell people that that should not be on offer to them.

Harm minimization

Like for regulation, poker machines are easy to monitor for problem gambling as well as for potential money laundering. (Despite what is often said, it’s very difficult to launder money through a poker machine if strict transaction monitoring and player identification procedures are adhered to). Players can monitor their own play if they want to, and get detailed and accurate statements on their play and spend, things that are much more difficult with casino gaming, racing and sports betting, and lotteries, for example. These are not necessarily good or bad things, but they are things that make poker machines attractive to operators and regulators.

Staff exposure is quite important here too: this is anecdotal, but I’ve had far fewer colleagues develop gambling problems in venues with only poker machines compared with casinos that offer table games with live dealers. I have been a dealer myself, and even I can sit at a blackjack table, or stand at a craps table as a player and think that I somehow have an advantage because I know the game inside out.

And it’s worth mentioning that, unlike racing, there are no animal welfare issues with poker machines (other than, perhaps, say, problem gamblers neglecting their pets).

Social exclusion reduction

There are better venues for social interaction than gaming rooms in clubs and hotels. Of course there are. But still, we live in the world we live in, and for quite a lot of people (especially elderly people living alone) a couple of hours playing the pokies once, twice, or a couple more times a week is valuable social interaction with others. I won’t spin it as a good thing, and I am more than aware that this can be spun as pokie dens preying on vulnerable people. But it’s a thing that exists and happens. Social services for elderly and lonely people should be better – of course they should – but they aren’t, and as long as people who get their social interaction from playing poker machines would otherwise be sitting at home alone, a social exclusion reduction argument can be made.

Physical poker machines in regulated venues also function as an alternative to online gambling. Online casinos and online poker machines. Those things can’t be regulated (we’ve tried!) and they are genuinely solitary. Again, it’s not ideal, but having poker machines in relatively safe environments with amenities and other people is a more attractive offering to players and regulators than people sitting at home alone playing the same games but with unregulated operators with no guarantee of wins being honored and withdrawals being possible, and with no protection if things do go wrong.

Money

Of course one of the main reasons they are attractive to operators is that poker machines can generate quite large amounts of revenue, and they are attractive to governments because they generate quite large amounts of tax. There’s a lot of financial and political leverage that goes both ways. A lot of people spend small amounts of money playing poker machines, and a small number of people spend large amounts of money playing poker machines, and this is the basis of most criticism of poker machines: money. (And this criticism is valid.)

All forms of gambling come with the risk of harm from problem gambling and problems related to problem gambling, and poker machines are not a special case. I won’t argue that poker machines are a benevolent source of social virtue providing employment and delivering social change through charitable giving (though both things are true/there are good arguments why these things are, indeed, bullshit: make up your own mind), but poker machines and the industry as a whole (despite some thoroughly rotten operators) are not a pure force of evil. They are simply, as a form of legal and regulated gambling, attractive.

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