Raising the Stakes: More Electronic Gaming Machines equals how many more problem gamblers?

Abstract

In the administration of the New South Wales Gaming Machines Act 2001, a small ‘industry’ developed around the preparation and appraisal of Social Impact Assessments (SIAs) required to accompany any application for additional Electronic Gaming Machines (EGMs) in clubs or hotels. The two-tiered structure permitted a simple process, known as Class 1, for small-increase applications. However the more complex Class 2 process required for larger applications was slow, costly and contentious. One of the key points of contention in this process was assessing the extent of problem gambling impacts that might be associated with a localised increase in EGMs, ordinarily expressed as an estimate of the increase in problem gamblers. As a consequence of this inefficient process, subsequent legislation sought to eliminate these contested aspects. This paper examines the available evidence on this policy approach and its effectiveness, focusing on the specific aspect of estimating incremental impacts arising from regulatory decisions, which serve to demonstrate the shortcomings of the system. The evidence presented extends to the application of a mathematical model developed for assessing outcomes in the SIA process. This model has some value as a tool in assessing regulatory outcomes in situations where marginal changes can alter externalised impacts.