Analysis-Slots to smartphones: pandemic sends Australia’s gambling problem online

By Byron Kaye and Praveen Menon

SYDNEY (Reuters) – For Rhys Wareham, a coffee industry technician from Sydney, the start of COVID-19 lockdowns in 2020 did not just mean staying home, but having to stop visiting the pub every afternoon to gamble on poker machines.

So he switched to a smartphone app which lets him track bets on his favourite sport, baseball, no matter where he is.

“The gambling itself doesn’t stop,” said Wareham, 31, who has a young child and is two-thirds of the way through paying off a A$30,000 ($19,968) gambling debt that bankrupted him eight years ago.

“Whatever hundreds of dollars I was spending in the afternoons at the pubs, it is now going into sports betting apps.”

Already the world’s biggest gambling nation in terms of loss per person, Australia has seen a shift in betting behaviour since the pandemic-forced closure of public venues.

Gamblers’ losses on poker machines shrank for the first time during the pandemic, but at a rate far slower than an unprecedented increase in money lost on apps, showed data. That means more players are being exposed to an industry that is harder to regulate than traditional gambling.

Australia’s gambling industry has been in the spotlight in recent years, with public inquiries lashing its biggest casino operators due to lapses in money laundering protections. Online gambling has also been the focus of inquiries, but with its increasing prevalence, the government has answered consumer advocates with a pledge to take a deeper look.

App providers are mostly foreign such as London-listed Flutter Entertainment PLC – owner of the most popular betting app in Australia, Sportsbet – and Entain PLC, owner of third-ranked app Ladbrokes (LON:). Unlike venues, they benefit from marketing methods such as text message-based promotions falling outside the scope of gambling advertising restrictions.

Gamblers’ loss on poker machines was A$11.4 billion in 2021, shrinking A$1.1 billion or 17% from 2019, the year before lockdowns began, showed data from Monash University’s School of Public Health & Preventive Medicine.

But gamblers’ loss in online sports betting swelled A$3.2 billion or 80% to A$7.1 billion in the same period, showed figures supplied by industry consultancy H2 Gambling Capital, which excluded credit often rewarded in promotions.

By comparison, gamblers’ total loss in online sports betting globally widened 58%. Australia overtook Britain, which has nearly three times its population, to rank third by online loss, behind the United States and Japan, said H2.

“Online operators have been competing for the business of customers who would have been betting in land-based facilities,” said H2 senior consultant Ed Birkin.

“The severity of the lockdown was also a driver of Australia being toward the higher end of the online betting growth,” he said, referring to movement restrictions through October 2021.

Nearly a year since lockdowns ended, Sportsbet account numbers are barely changed, showed filings from Flutter, whose regular customers include 6% of Australia’s adult population – one million people.

Flutter did not respond to emails seeking comment.

An Entain spokesperson said the firm had “more player safety tools than any other operator in the market, including the use of algorithms which help us to detect problematic behaviour and then intervene.”

WORLD CLASS PROBLEM

After decades of gambling deregulation, governments are cautious about reversing course, given tax revenue and industry lobbying, even amid public concern about a habit that strips voters of A$25 billion per year – or A$1,000 per person, more than double the United States.

The new centre-left federal government this month said it will hold a parliamentary inquiry into online gambling, though some recommendations of a 2015 inquiry are yet to take effect.

After that previous inquiry, state and federal governments agreed to build a “self-exclusion” register by May 2020, through which gamblers can bar themselves from registered betting apps.

Two years on, the register is “well advanced” but not operational, the Australian Communications and Media Authority which is overseeing the register, said in an email.

POKIES VS GUNS

As lockdowns made a crime of many forms of socialising, gambling became more attractive among “socially isolated or bored” young men, said Rebecca Jenkinson, executive manager of the Australian Gambling Research Centre.

“At their fingertips they have 24-hour access to gambling online. They are gambling because it’s so available and heavily promoted.”

Still, poker machines – known as pokies – are so entrenched that experts do not expect online betting to become the country’s primary gambling habit any time soon, with venues housing some 200,000 machines returning to business as usual.

    “Australia has pokies the way America has guns,” said Wesley Mission, a nonprofit organisation which supports problem gamblers, in a policy document.

    “It is our national shame and many of us are oblivious to the harm that it is causing people we know and love.”

Wareham, the coffee technician, said he no longer uses poker machines and that family responsibilities help him control his online betting. He at least no longer spends a whole pay cheque in one sitting, but is worried others might fare worse.

“To anybody who’s 25 who thinks there are millions of dollars in there to be had, there aren’t,” he said. “There are millions of dollars to be lost.”

($1 = 1.5024 Australian dollars)

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