Gambling’s community contributions: does the community benefit?

Abstract

Background: Harms from gambling are considerable and widespread, impacting beyond the individual gambler. Asserting benefits, including supporting ‘good causes’ outweighs this harm, is a common legitimization tactic of commercial gambling. Identified as problematic on many levels, this is a global phenomenon. Using unusually transparent data, this research assesses the extent to which such contributions offset gambling harms.

Methods: Commonly in Australian jurisdictions, not-for-profit gambling operators (clubs) qualify for gambling tax reductions. To qualify in the state of Victoria, clubs submit annual statements documenting that at least 8.33% of their net gambling revenue (NGR) supports community purposes. We examined community benefit records from three consecutive annual reporting periods (2012–2015). Results are presented in aggregate, and via specific case studies.

Results: We identified significant over-valuation of 'community benefits'. Gambling tax deductions overwhelmingly (82%) went to operational expenses including wages, venue maintenance, capital costs and utilities. Contributions to charitable and philanthropic purposes represented 4.5% of all community benefit claims (1.5% of club NGR).

Conclusions: Similar to other jurisdictions, Victoria’s community contribution arrangements provide limited actual community benefit. Doing little to offset gambling harm, demonstrated benefits largely accrue to specific sectional interests. Greater transparency and improved governance is required. This includes, reviewing tax exemptions, reviewing allowable claims, and greater compliance oversight.

This research identifies multiple failings with a community benefit scheme operating in a relatively transparent manner. Research lessons may be of interest to policy makers and others wanting to ensure that gambling’s demonstrable harms are, indeed, offset by clear benefits to community, and to preventing gambling harm.

Keywords:

• Gambling
• electronic gambling machines
• community contributions
• gambling regulation
• gambling benefits and harms

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Disclosure statement

Associate Professor Charles Livingstone has received funding from the Victorian Responsible Gambling Foundation, the (former) Victorian Gambling Research Panel, and the South Australian Independent Gambling Authority (the funds for which were derived from hypothecation of gambling tax revenue to research purposes), from the Australian and New Zealand School of Government and the Foundation for Alcohol Research and Education, and from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform, existing harm minimisation practices, and technical characteristics of gambling forms. He has received travel and co-operation grants from the Alberta Problem Gambling Research Institute, the Finnish Institute for Public Health, the Finnish Alcohol Research Foundation, the Ontario Problem Gambling Research Committee, and the Problem Gambling Foundation of New Zealand. He was a Chief Investigator on an Australian Research Council funded project researching mechanisms of influence on government by the tobacco, alcohol and gambling industries. He has undertaken consultancy research for local governments and non-government organisations in Australia and the UK seeking to restrict or reduce the concentration of poker machines and gambling impacts, and was a member of the Australian government's Ministerial Expert Advisory Group on Gambling in 2010–11.

Louise Francis is the recipient of an Australian Government Research Training Program Stipend Scholarship (formerly Australian Postgraduate Award from the Commonwealth government. Louise has contributed to projects that have received funding from non-government organisations for research into multiple aspects of poker machine gambling, including regulatory reform and existing harm minimisation practices.