The Case Against Pokies

The formation of NoPE didn’t happen as a result of some sort of anti-gambling zealotry. We are, first and foremost, Essendon fans who want our club to be the best that it can; and the large body of research into the damage that pokies can cause highlights the fact that being a great football club is incompatible with also being a gambling company.

Pokies are particularly predatory because they are designed in a way that increases the chances of addiction. The lights, colours and sounds are all designed to give a dopamine hit – a little chemical release of happiness which leaves you wanting more. The machines are designed to deliver these even when you’re losing through such things as losses disguised as wins – where the lights flash and the sound plays even though you’ve “won” less than you bet. This process has been discussed in many studies but it also well illustrated in these interactive articles in both The Guardian and The Age.

In this way, pokies venue operators – as Essendon are – are not much different to cigarette companies in that they offer a product that they know people are at risk of becoming addicted to. And they know that the addiction can cause significant harm.

Research has shown that for every person who is directly experiencing gambling harm, six others close to them are also negatively effected. This can mean relationship breakdowns, families torn apart, friendships ruined and jobs lost. The harm is not limited to the person sitting at the machine.

There’s a link between the number of EGMs in an area and crime. One study found police callouts for domestic assaults increased by 30% in areas with a high pokies density compared to those without. An ABC article based on that study explains that ‘Previous research in Victoria, South Australia and Tasmania has shown that more than half the people receiving problem gambling treatment have recent experience of domestic violence, either as survivors or perpetrators.’

The gambling lobby likes to point to the money which venue operators put back into the community. These benefits have been shown to be vastly overstated, with a parliamentary committee in 2023 making a bipartisan call for an overhaul to the Community Benefit scheme. It’s also worth noting the VGCCC’s position on gambling harm, in which they state ‘The harm experienced by one person is not lessened by any associated benefits accruing to other people.’

While private owners of pokies venues normally operate under a hotel licence, R.S.Ls, sporting, and social clubs such as Essendon operate their poker machines under a club licence. Regulations prevent a transfer of machines between licence types, meaning Essendon’s pokies could only be sold to another group eligible for a club licence and not to a private pub operator.

Club licencees are entitled to a lower tax rate than hotel licencees if at least 8.33% of the money lost on poker machines in their venue is put back into the community. We have analysed the community benefit statements for the Melton Country Club and Windy Hill Venue, going back to the 2010 financial year, to understand how the community benefits from Essendon’s poker machine ownership.

Across the two venues between FY 2010-23, Essendon reported $45.8 million of community benefit spending, over $27.5 million of which was on things such as wages, insurance, utility bills and rent – or simply, the cost of doing business. A further $8.6 million of benefits provided to the community were in the form of free or discounted room hire, in-venue entertainment, meal deals or to screen Fox Footy and Sky Racing in the venues – which happen to also house TABs.

In total, almost 80% of these reported benefits are either the cost of doing business, or services used to attract people into the venues and onto the pokies.

Of the remaining $9.6 million which has actually been spent outside of Essendon’s gambling venues over the past 14 years, more than a third of it has been on the maintenance of the ovals at Windy Hill and The Hangar, as well as the Essendon Bowls Club’s bowling greens.

Under the reporting section for contributions to organisations that provide gambling, drug, or alcohol support services, Essendon have recorded contributions of just $30,257 – all to a worthy organisation, although one which doesn’t offer gambling support services. So while Essendon has spent over one million dollars on Fox Footy and Sky Racing broadcasts in their TABs, to benefit the community, they have not put one cent towards helping the lives that they’ve ruined.

Essendon’s reporting on their Community Benefit Statements is in line with other venues, and we’re not suggesting they’ve done anything outside of what is allowed. Rather, it highlights a flawed system which allows venues to qualify for tax breaks, simply for the cost of doing business.

Only 6.04% of money lost by gamblers at the venues went back to the community outside of the venues. Of that amount, over a third went towards the maintenance of sporting grounds – with detailed statements indicating these amounts went mostly to a combination of the bowls club and oval at Windy Hill and the ovals at Essendon’s Tullamarine training base. While all of Essendon’s claimed community benefits are allowed under the community benefit statement scheme, and we are not suggesting otherwise, it does illustrate the flawed nature of the community benefits scheme and supports the argument that any community benefit provided by Essendon owning the venues is vastly overstated.

Player Losses

It’s impossible to know exactly just how much money has been lost on Essendon’s pokies – be we know it’s a lot. Venue-level data is only available from the mid-2000s, well after Essendon started taking from the community at Windy Hill in 1992, and Melton in 1995.

The VGCCC expenditure data shows that since FY 2005-06 over $235m has been lost across Essendon’s two venues. While the overall total lost in that period is slightly higher at Windy Hill, greater losses have been recorded at the Melton venue over the past six years. Further, the Windy Hill venue has 100 EGMs compared to 90 at the Melton Country Club – so the loss-per-machine is greater at Melton.

Financial Year	Melton Country Club	Windy Hill	Grand Total
2005-06	$6,836,737.00	$7,705,095.00	$14,541,832.00
2006-07	$6,943,417.00	$8,143,792.00	$15,087,209.00
2007-08	$7,151,400.00	$8,017,109.00	$15,168,509.00
2008-09	$7,045,499.30	$7,614,543.69	$14,660,042.99
2009-10	$6,064,015.98	$6,766,098.04	$12,830,114.02
2010-11	$5,913,714.12	$6,452,954.76	$12,366,668.88
2011-12	$6,210,836.69	$6,818,137.54	$13,028,974.23
2012-13	$5,673,587.67	$6,283,215.45	$11,956,803.12
2013-14	$5,752,072.59	$6,150,471.66	$11,902,544.25
2014-15	$5,698,878.17	$6,651,426.13	$12,350,304.30
2015-16	$5,747,188.77	$6,337,864.14	$12,085,052.91
2016-17	$5,688,281.10	$6,174,090.46	$11,862,371.56
2017-18	$5,685,208.49	$5,869,768.67	$11,554,977.16
2018-19	$5,874,897.58	$5,295,945.16	$11,170,842.74
2019-20	$4,362,669.59	$3,882,059.13	$8,244,728.72
2020-21	$3,853,775.00	$3,217,910.09	$7,071,685.09
2021-22	$5,778,578.56	$4,380,935.64	$10,159,514.20
2022-23	$8,453,363.00	$6,267,845.00	$14,721,208.00
2023-24	$8,057,702.65	$6,360,599.04	$14,418,301.69
Grand Total	$116,791,823.26	$118,389,860.60	$235,181,683.86

While total losses were trending downwards pre-COVID, they have since increased to pre-2010 levels. This trend is seen state-wide, as experts point to financial stress as being a major contributor to people developing gambling problems.