User:Hosborne/BPS2011 Review on the effect of pre commitment gambling on support of sport

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Review
Hosborne/BPS2011 Review on the effect of pre commitment gambling on support of sport
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Referencing
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Closing comments


Introduction[edit]

Australian sporting culture relies heavily on contributions from government and the community. Across the ACT there are a wide range of social clubs that are the main sponsors for several sporting clubs across Canberra. This sponsorship by social clubs is reflected in the sporting landscape, not only in Australia but, across the world. The clubs supported by profits generally made from gambling sponsor and donate funds to sporting clubs from community through to professional. Additionally, the importance of gambling within the sporting culture is emphasised by billboards portrayed at national and international events promoting whichever betting organisation is sponsoring the event as well as advertising throughout broadcasts on television and even through commentating where odds and bets are discussed. The ideas of sport and gambling are synonymous throughout the entire process, that is, from funding grass roots clubs to pure advertising of professional teams in international competitions. This essay will focus on how the proposed mandatory pre commitment gambling scheme will affect these social club’s ability to contribute to the sporting community. Both sides of the argument are very vocal with those for the introduction of this pre commitment scheme claiming that there will necessary financial impact on clubs but limited impact on the community , meanwhile, the spokespeople against the scheme claim that the financial effects will be so great that the clubs would be at risk of shutting down and the community would lose the generous support of the clubs .

Politics[edit]

The idea of a pre commitment gambling scheme was introduced after the recent election as a bargaining tool by independent MP Andrew Wilkie. Mr. Wilkie created a signed agreement with the government in order for his support of the Australian Labor Party allowing them to form government. Section 7 of this agreement details that the pre commitment gambling scheme legislation will need to be in place in every state of Australia by 2012 or Mr. Wilkie MP might withdraw his support from the government and they could lose their right to govern. Mr Andrew Wilkie, MP, claims, “Millions of Australians are suffering from poker machines and something must be done about it as quickly as possible. Introduction of an effective mandatory pre-commitment system by the earliest possible date—2014—is now an urgent and critical national priority. Our children will judge the Members and Senators of the 43rd Parliament on this. As they should.” The proposed mandatory pre commitment scheme involves over 30 recommendations, including the requirement that gamblers must register to play on machines over a dollar maximum bet, the profits legally allowed to be made by machines be strictly limited as well as limits placed on how much a gambler can spend. However, the proposed scheme does not have bi partisan support. Leader of the opposition, Tony Abbott, announced at a rally to oppose poker machine reforms that the Liberal do not support mandatory pre commitment. He also stated that if the reforms were passed that he would introduce legislation to have the law rescinded.

Business[edit]

Community Impact[edit]

The connection between gambling and sport is highlighted by the much publicised negative response to many of these recommendations by sporting bodies, clubs and high profile individuals. The businesses that would be affected by these changes claim that it will severely impact their ability to continue to sponsor community sport and provide that facilities and amenities that most of these clubs do for their communities. There are several groups within the Australian business community that are objecting to the introduction of this mandatory pre commitment scheme based on fears that it will harm their effectiveness within the community. The big clubs who make a lot of profit off the back of poker machines argue that this new government proposal will hurt the community as they will no longer have the profitability allowing them to support community projects, clubs and amenities. According to Clubs Australia, “Community clubs are not-for-profit, member-driven and community-orientated associations of people. They support a wide range of causes, including sporting teams and local charities. No one can personally profit from club operation and any net financial surplus must be returned to members and the local community.” However, the largest voices behind the Clubs Australia campaign are not the small to medium sized not-for-profit community clubs but the large clubs like the Hawthorn Football Club and the Penrith Rugby League Club. The president of the Hawthorn Football Club believes that the clubs revenue will be reduced by around 40%, he said, “For those of us associated with AFL clubs it will dramatically reduce the revenue that is currently allocated to our football department.” Additionally, the Panther Group in their 2010 annual report released all details related to revenue as well as community contributions and sponsorships that were given out. In 2010, $91,703,000 was earned through gaming nearly $30,000,000 more than any other source of income. This is compared to $691,000 being spent throughout that year on sponsorship and $1,423,000 on donations. This return is just over 2% of the profits made through pure gaming and around 1% of the clubs total profits for that year. Conversely, the Panthers Group does provide jobs for the community, as well as entertainment and other community benefits but in total what is given back to the community is far less than what the club receives from gambling after tax. The disproportionate kick backs to the community continues through to the medium sized clubs as well evidenced by the Merrimbula RSL which made over two million in pre tax profit and none of these earnings were put back into the community through grants or donations.

Financial Impact[edit]

However, the real difficult faced by implementing a mandatory pre commitment scheme is the expensive technology. To implement the technology required by the current proposed legislation clubs would need to upgrade all machines over a $1 maximum bet, introduce multiple card readers depending on the size of the clubs and also provide cards for the gamblers. Justin Brown, a representative from Aristocrat, a main producer of electronic gaming machines, believes that the costs associated with the upgraded technology would range between $3000 - $5000 per machine. Though these figures are constantly changed with several groups claiming it could be more and others claiming it would be considerably more expensive. Additionally the cards are said to cost between one and five dollars with a card reader costing between $5 - $600 depending on the type of technologies used. The joint select committee estimates the total cost of introducing all the technologies to be around 3 billion dollars a figure that is a little over half the sum lost by problem gamblers in a 12 month period. Clubs Australia also estimates that the implementation of the technology could cost upwards of 2.5 billion dollars. The issue with these costs faced by the small to medium sized clubs is that they would be unable to absorb these costs over the four year period. The Returned and Services League of Australia states that the introduction of these technologies would cause the closure of many RSL clubs and subsequently the closure of many RSL sub branches. Clubs Australia, CEO, Anthony Ball said, “These clubs provide significant financial support to the community and provide a place for veterans and their families to socialise”

The basis of the campaigns against the mandatory pre-commitment scheme is that it will take away necessary community funding provided by the clubs, this funding is said to contribute to sporting clubs across Australia and that without this funding sport will suffer. However, the substantial revenue earned through gambling does not appear to be connected with the small amounts of funding provided back to the community. The clubs are concerned with pre commitment as it proposes to limit the gambling profits from the clubs however that profit it is not directly connected to the community clubs contribution to sport as in evidenced through the Panther Annual Report which showed substantial gambling profit and very little community contribution.

Sport[edit]

Sport is almost synonymous with Australia; it is an integral part of the Australian culture. There are many facets of sport within in Australia, the sport we watch be it the Australian team competing in an international competition, our state or area team competing in the national competition or the team we play in against other local teams in the community competition. The way the community are capable of maintaining such a vibrant sporting culture is often through community funding provided my many sources including the donations, sponsorship and facilities provided by community clubs.

This funding is a lifeline for local sporting clubs as well as some of the smaller state and national sides e.g. The Raiders.

The funding comes in many forms from allowing sporting clubs to utilise the clubs facilities to providing cash donations as well as sponsoring many clubs in return for post game celebrations and functions to take place within their venues. However, while the money that the clubs provide to sponsor these community sporting clubs is not a large percentage of the social clubs profit without this funding many clubs would no longer be able to afford to compete. The question that is being asked by this essay is whether that could change because of the proposed pre-commitment scheme. As has been mentioned before, the expenditure on the community by the clubs has very limited correlation to that of the gaming revenue. According to the Get Up website, only 2.7% of gaming revenue is given back to the community . On most social clubs websites and in their mission statements they claim that supporting the community, or in some cases, supporting a particular sport is the goal of their club – this should remain the same with or without the substantial profits from gaming.

Social clubs have a very limited role in the Australian representative teams, especially those within the main streams sports. The most common way in which social clubs support the community and effect sport when it comes to the national team is by providing an arena in which to view the events. The pre commitment scheme would have little effect on this practice as it is a positive outcome for social clubs with the community supporting the club through the purchase of food, drinks and patronage.

Conclusion[edit]

The proposed mandatory pre-commitment scheme will without question place a large financial burden on social clubs across Australia, especially the smaller community clubs that receive very little revenue. However, the assumption that it will ruin the social fabric of Australia is unfounded. The scheme will not affect the mission and purpose of the clubs which is to serve and benefit the community. Additionally, the clubs will continue to be not-for-profit social clubs where the income earned will be returned to the members and community. Finally, the Australian culture is the saving grace for sporting clubs. The ability to raise funding from other areas to make up for the generally small amounts given in funding specifically to sporting clubs should be the approach to deal with a potential drop in funding.

References[edit]

 Rob U Blind (2011) GetUp Australia http://www.getup.org.au (1/11/2011)
 Carissa Simons, RSL Calls on Prime Minister to dump mandatory pre-commitment (2011) Clubs Australia http://www.clubsaustralia.com.au/docs/default-document-library/mr-ca-rsl.pdf (1/11/2011)
Pre Commitment (2011) Responsible Gambling Advocacy Centre  http://www.responsiblegambling.org.au/gamblingissues/pre-commitment (1/11/2011)
 Commonwealth, The design and implementation of a mandatory pre-commitment  system for electronic gaming machines: Parliamentary Joint Select Committee on Gambling Reform, First Report (2011)
 Michael Edwards, Abbott says Coalition would end any pokies pre-commitment (2011) AM http://www.abc.net.au/am/content/2011/s3348060.htm (1/11/2011)
 Clubs Australia (2011) Clubs Australia http://www.clubsaustralia.com.au/ (1/11/2011)
 Jeff Kennett, Public Opinion (2011) Won’t Work Will Hurt http://www.wontworkwillhurt.com.au/expert-opinion (1/11/2011)
 Penrith Rugby League Club, 2010;  Annual Financial Report (2010) Panthers Group http://www.panthersgroup.com.au/sitefiles/PanthersGroup/documents/Penrith%20Rugby%20League%20Club%202010.pdf (1/11/2011)
 Ben Eltham, Transparency Please! Why the tax breaks for pokies clubs? (2011) Crikey http://www.crikey.com.au/2011/09/27/clubs-australia-campaignand-pokies-revenue/ (1/11/2011)
 Carissa Simons, RSL Calls on Prime Minister to dump mandatory pre-commitment (2011) Clubs Australia http://www.clubsaustralia.com.au/docs/default-document-library/mr-ca-rsl.pdf (1/11/2011)
  About Clubs NSW (2007) Clubs NSW http://www.clubsnsw.com.au/About_Us1.aspx (1/11/2011)