Just off the freeway in a small suburb in Melbourne’s west is the Kealba Hotel. It looks like any other suburban sports pub: there’s a bistro and a beer garden, an indoor children’s playground, and huge TV screens showing live football matches and horse races.
And there are 86 poker machines. This pub in the middle of Brimbank, Victoria’s third most disadvantaged local government area, has had the dubious distinction, year after year, of being the venue in the state where people lose the most money on the pokies.
Last financial year, nearly $20.5m was lost in this building alone. That’s the equivalent of 391 yearly salaries at the median wage. And yet it’s a small number in the context of a very big, very expensive national problem.
Australia is addicted to gambling. About $25bn is lost to legal forms of gambling every year, according to recent estimates from the Australian Institute of Health and Welfare. Nearly half of this goes into poker machines.
The profits of pokies first and most obviously flow to the casinos, pubs and clubs that own licences to run them. When the chance of landing a jackpot on a poker machine is literally one in 35,640,000, the real jackpot is holding the licence to collect the losses.
But all aspects of Australian life are steeped in gambling money as it flows back and forth through the economy.
A substantial proportion of profits goes to the governments that allow poker machines to run. It flows to state and federal budgets through taxes, and also to political parties through donations.
Some is ploughed back into local communities, typically in the form of support for junior sport, which gives the clubs an effective argument against attempts to rein in their numbers. And many Australians invest in the gaming companies via their superannuation funds, including some marketed as “socially aware”, completing a circle that makes reducing harm from problem gambling such an intractable problem.
Most pokies losses come from the pockets of the poor
The worst losses happen in communities where people can least afford it.
In Victoria, where the data available is most robust, the largest amount of money is lost on pokies in Brimbank – $128m in the last financial year, despite pubs and clubs being closed for months due to Covid lockdowns. The previous financial year, it was more than $92m. In Greater Dandenong, the second-most disadvantaged local government area in Victoria, gamblers lost $102m in the last financial year.
There were more than 29,000 poker machines in the state at the end of last year. The Victorian government collected more than $2.2bn in gambling taxes and expects to collect $2.4bn this financial year – $1.2bn of it from pokies.
In New South Wales, things are worse: the state has by far the highest concentration of pokies in the country, with 86,640 machines in its pubs and clubs.
And the most money is lost in western Sydney. More than $900m was lost in the local government areas of Fairfield and Canterbury-Bankstown on 8,578 machines in the last financial year . Fairfield is ranked as the city’s most disadvantaged area, with Canterbury-Bankstown not far behind.
The NSW government expects to rake in $3.26bn this financial year from gambling taxes.