New South Wales poker machine revenue on the rise

New South Wales Premier Dominic Perrottet has mentioned on a number of occasions his reservations against gambling and the revenue received by the Australia government from poker machines.

At one point in April, Perrottet revealed that he had no problems whatsoever not getting any money from gambling revenue. He went on to call the amount of poker machines in NSW a “travesty” and a challenge to the government.

“The fact that there are more pokies in NSW than almost anywhere in the world is a complete travesty. It’s a real political challenge,” Perrottet said at the time.

Still, on the topic of poker machine reform, the NSW Premier previously spoke about how much the government was doing little to aid problem gamblers. He also said that receiving money from pokies revenue was basically “taxing on the misery of others,” and he hoped to do better.

The NSW government is still on the receiving end of poker machine revenue, with the amount rising with each passing year. According to reports, the state is set to receive $2.03 billion in 2022-2023 from gaming machine tax. The amount is approximately $500 million higher than the tax received in the previous year and just past 5% of the revenue directly collected by the state government.

NSW’s gaming task is paid chiefly on the metered gains of poker machines in hotels and clubs. These machines are proving to be one of the most rapidly growing revenue sources in the state. It is forecast to experience an annual growth of up to 14 percent in the next four years.

As a result of the strong recovery of gambling venues due to reduced pandemic restrictions and the expected increase in “household disposable income,” the expected revenue from pokies was increased. The amount predicted for the gambling machines in hotels and clubs over the next four years was inflated to $423 million.

According to the forecast, the NSW state revenue would gain even more from gambling machines in 2022-2023 than every other gambling tax combined. This includes activities like lotteries, casinos, and racing. Poker machines in hotels are also taxed significantly higher than those in clubs.

An NSW Crime Commission report earlier this year intensified political pressure to reform the gambling machines. The report discovered that in 2020-2021, around $95 billion was laundered via poker machines in NSW pubs and clubs. The state was described as “the gambling capital of Australia.”

The report also recommended that mandatory cashless gaming cards be introduced to ensure that money laundering via electronic gaming machines is reduced. Not much has been said about the implementation of the mandatory cards; however, Perrottet has announced his approval.

Compared to other territories and states, NSW has recorded more money from poker machines per person. Per an analysis from the Queensland Government’s Statistician’s Office 2019-2020, the state registered $221 in revenue per capita from the machines.

Compared to this, Victoria recorded $143 and Queensland $159. In 2019-2020, NSW pubs and clubs had a poker machine revenue per capita that was 42 percent more than the national average.

The Western Australian government has since prohibited poker machines in pubs and clubs and, as such, does not receive any revenue from that channel. It instead benefits from the taxes imposed on gambling, alcohol, and tobacco called “sin taxes.”

Chris Richardson, an independent economist and budget expert, revealed that much like poker machine taxes, sin taxes were less of a drag on the state’s economy compared to other modes of taxation. The growing issue of problem gambling, however, and the spread of poker machines in low-income areas have made the machines considerably regressive. This means that gaming machines are more detrimental to the poor than to the rich.

Richardson explained that not only were problem gamblers being taxed indirectly, but poverty was also significantly increased as a result.

“You are not just taxing many problem gamblers; you are indirectly taxing those who depend on them, so you’re actually making poverty worse. Ultimately, the problem is that we have too many pokies in the first place,” the economist said.

The chief executive of Wesley Mission, Stu Cameron, stated that the revenue from poker machines should be channeled into treating and preventing gambling harm. The Wesley Mission organization offers a wide range of community services, including gambling counseling.

“From today, any increased tax revenue and windfall fines must be directed towards mitigating gambling harm. We must remember that the source of this tax is creating harm, and no government should depend on income from such a source to plug other gaps,” Cameron said.

The NSW has also been requested to use the funds obtained from gambling to provide finance for an entirely independent body that would carry out studies on how to reduce harmful gambling. They would also offer vested interest-free advice on gambling-related policies.

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