In Australia, all eyes are on a lawsuit filed in the nation’s Federal Court on October 26, in which a gambling addict, Shonica Guy, is suing Australian poker machine manufacturer Aristocrat Technologies. If the court rules for Guy, new betting limits on machines and guidelines on advertising could results.
Court documents show Guy began playing the machines at age 17; when she was 31, she suffered “significant losses” because the machines she played, Dolphin Treasures, were in breach of consumer laws against misleading and deliberately deceptive about the chances of winning. Attorney Maurice Blackburn said, “If successful, the litigation will have ramifications for the design of all poker machines in the industry.”
In a statement officials at Aristocrat, among the world’s largest poker-machine manufacturers, responded, “Aristocrat emphatically rejects any suggestion that its games are designed to encourage problem gambling, or in any way fail to comply with all relevant regulations and laws.”
Another gambling-related drama playing out in Australia is Chinese authorities’ arrest in late October of 18 employees of Crown Resorts in late-night raids throughout the country. Chinese authorities said the arrests are part of an investigation into gambling-related crimes. Soon after the arrests, Crown issued a statement urging the Australian government to “make contact with and ascertain the welfare of its employees.”
The mystery continues as to why the employees were detained, and many casino operators are concerned that the arrests may impact and call attention to the wave of Chinese high rollers flocking to casinos in Australia and Southeast Asia. Following the arrests, many casino agents and executives left mainland China, where betting and soliciting high-rollers to gamble at casinos outside the country are illegal (except on state lotteries). Penalties range from fines to 10-year jail terms.
Following the arrests, Crown revenue dropped 17 percent before stabilizing. Analysts said the arrests are unlikely to significantly affect Crown’s bottom line, which depends on everyday gamblers, not foreign high rollers. “Less than half of the revenue from Crown’s international VIP gaming programs is currently generated by visitors from mainland China. Consequently, this segment of the business represents approximately 12 percent of the Crown Group revenues in FY16,” officials stated.
Tian Di has been named as one of 18 Crown Resorts employees who were arrested in China for alleged “gambling crimes,” reports the Sydney Morning Herald.
The junket operator makes his living enticing high rollers to visit and play at Crown Towers Casino in Melbourne. Friends said he “disappeared off the face of the earth” after traveling to China several weeks ago. The arrests took place in mid-October and included Crown Towers’ head of VIP operations Jason O’Conner.
Direct promotion and marketing of gaming is illegal in China and carries a maximum sentence of 10 years in jail.
The Herald reports that Tian owns a seven-bedroom mansion in Melbourne and a $6 million 140-acre horse farm near Chelsea Beach. The publication also reported that Tian was once spotted brandishing a million-dollar chip from the Melbourne casino.
Packer, primary stakeholder of Crown Towers, has expressed his concern for the detained employees, who to date have not been formally charged. “Crown will do whatever it can to support our employees and their families at this difficult time,” he said in a statement.
Meanwhile, the global gaming industry is divided on the matter: in a story on the arrests, Forbes said investors are “overreacting” to punitive action taken in a country that expressly forbids gaming junkets to ply their trade. Bloomberg News, on the other hand, reported that the arrests have “sent a shudder through the industry.”
That was certainly true in the immediate aftermath. Crown stock fell by a record 14 percent in Sydney trading on the news, and about $1 billion in market value was wiped out that day.
More than a third of Crown’s revenue at its Australian resorts comes from international visitors, predominantly those from Mainland Chinese, reported Bloomberg.
Foreign high rollers account for about 15 percent of the total revenue of the Australian gambling industry; last year these players lost about $17.63 billion on gambling and $8.89 on gaming machines not in casinos, according to government statistics. Australian gamblers, considered to be among the world’s worst, lose an average of $1,130 annually from gambling, more than the per-capita average for adults in any other country, the Economist magazine said.
As a result, Australian lawmakers once again are trying to tighten the nation’s gambling regulations. In July, MP Andrew Wilkie and Senator Nick Xenophon teamed to offer legislation to limit poker-machine bets to $1 and to ban gambling ads during TV sports broadcasts. As expected, the gambling industry pushed back, and so did state and territory officials who benefited from $4.44 billion in gambling taxes in the year ending June 2015.
In contrast to most betting nations that limit gambling to designated betting parlors and casinos, most Australian states allow gambling in clubs and bars. Although its population is only 23 million, some industry observers claim Australia now hosts about 20 percent of the world’s poker machines. Under Australian law, the games are required to return 85 percent in winnings, but that does not mean players win. Public health expert Charles Livingstone of Monash University in Melbourne said, “Anybody who plays over an extended period of time will lose.” He noted gambling addicts burn out after five years, by which time they have typically lost their jobs, savings and pensions.
ClubsNSW, one of the gaming industry’s largest lobbyist groups, said most Australians gamble responsibly, but “we recognize excessive gambling is a serious problem for a small number of people. ClubsNSW supports the introduction of evidence-based, cost-effective measures to deal with problem gambling. Over the years, clubs have developed and implemented a range of effective tools and resources, such as multi-venue self-exclusion, and we will continue to research and test measures to find solutions that work.”
Livingstone said clubs claim that they give money back to the community, but research indicates donations average about 1.8 percent of gambling revenue. “They the clubs have so much money they don’t know what to do with it. It’s a systematic and quite predatory industry. The government has to stand up to these guys. They’re hard to take on, but not impossible.”
Livingstone said gaming regulation in Australia will change only when one of the two major political parties takes action. But since the gaming lobby is well organized politically and has extremely deep pockets, that might take some time, he added.
