Performance audit — Audit Planning Memorandum
Gambling revenue and harm minimisation
Background
Gambling was almost certainly occurring in Tasmania prior to the first horse
race in 1814. Off-course betting was first permitted in 1932. The first legal casino
in Australia opened in Hobart in 1973. However, it was not until 1997 that
electronic gaming machines (EGMs) were allowed to operate outside of the two
casinos, in hotels and clubs.
Recent developments in the industry have seen the introduction of internet and
mobile phone gambling. Tasmania was the first Australian state to license
Betfair, the world’s largest internet betting exchange, facilitating internet
gambling on sporting events.
Expenditure in the local gambling industry peaked at $429 million in 2008–091,
but has now declined. Factors likely to have contributed to the decline include:

the Global Financial Crisis

smoking ban at venues

changing demographic of EGM players

the rise of internet betting which the Tasmanian government cannot tax.
Gaming in Tasmania is regulated by the Gaming Control Act 1993 (the Act). The
Act regulates the licencing of gaming activities in Tasmania, including the
supervision and control of casinos, gaming machines, keno, lotteries and gaming
by telephone and other electronic means.
The Tasmania Liquor and Gaming Commission (TLGC) is an independent body
established for the regulation of gaming and wagering in Tasmania, established
under the Act. The TLGC is supported in undertaking its day-to-day activities by
the Department of Treasury and Finance’s (Treasury) Liquor and Gaming
Branch. The Act confers regulatory powers on Treasury to ensure licensed
gaming providers and venues adhere to revenue and harm minimisation
provisions contained in the legislation.
The TLGC reported local gambling expenditure was $278 million in 2015–162.
The Tasmanian government collected $95 million in taxation and fees for the
same period, from locally controlled EGMs, keno, casino, interactive gaming and
wagering. The largest portion of government revenue from gambling comes from
taxation and fees associated with EGMs and Keno in hotels and clubs, which
totalled $31.5 million in 2014–15.
1
2
Productivity Commission, 2012, Gambling Inquiry Report
Tasmanian Gaming Commission, Annual Report 2015–16, p.10
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Gambling revenue and harm minimisation
Performance audit — Audit Planning Memorandum
In 2013, 61 per cent of all adult Tasmanians participated in some form of
gambling3. For some people, gambling is addictive and harmful with 2.3 per cent
assessed to be either moderate risk or problem gamblers. Problem gamblers lose
an average of $8958 each year. The social cost of problem gambling in Tasmania
is estimated to be at least $99 million4. Only about 15 per cent of problem
gamblers seek help5. Problem gamblers are six times more likely to be divorced,
four times more likely to have problems with alcohol and four times as likely to
smoke daily as non-problem gamblers.6
The Act requires the industry help minimise the harm associated with gaming
activities by promoting responsible gambling. Measures to promote responsible
gambling include, clocks in gaming areas, self-exclusion programs and posters
promoting gambler support programs.
The Act also requires the government to collect the Community Support Levy
(CSL), which was seen as recognition that an increase in the number and location
of EGMs in the community may diminish traditional fundraising activities. The
CSL is set at four per cent of EGM gross profits in hotels and clubs and is used to
fund research into problem gambling and harm minimisation programs. Under
the heading ‘other health services’, the CSL helps fund 33 neighbourhood
centres7. In 2014–15, an amount of $4.6 million was raised through the CSL.
Table 1 shows how the Treasurer must distribute the CSL:
Table 1: Distribution of CSL as required by the Act
Percentage of
CSL
Purpose
Administered
by
25%
For the benefit of sport and recreation clubs
DPAC*
25%
For the benefit of charitable organisations
DHHS**
50%
For the provision of:
 gambling research
 community education
 services to prevent compulsive gambling
 rehabilitation for compulsive gamblers
 other health services
* Department of Premier and Cabinet
** Department of Health and Human Services
DHHS
3
Department of Treasury and Finance, Third Social and Economic Impact Study of Gambling in
Tasmania, Summary Report, p.V
4 ibid.
5
www.problemgambling.gov.au/facts/
6
Thomas, S, and Jackson, A, 2008, Risk and protective factors, depression and comorbidities in
problem gambling.
7
Approximately $1.5 million a year, Parliamentary Standing Committee on Public Accounts,
Community Support Levy Investigation 2015. This funding is discretionary.
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Gambling revenue and harm minimisation
Performance audit — Audit Planning Memorandum
The TLGC performs a strategic oversight function in respect to the CSL and is
responsible for advising the Treasurer on whether the CSL is being distributed in
accordance with the Act.
The audit was selected because of public concerns about the reach of gambling
and the negative impacts it has on the Tasmanian community. Also, the
agreement with the Federal Group expires in 2023, with an audit prior to that
date potentially informing future agreements.
Audit objective
The audit’s objective will be to express an opinion on:

managing the collection of gambling revenue

the effective management of the CSL

the effectiveness and enforcement of regulatory harm minimisation
measures.
Audit scope
The audit will cover the period 2011–16 and include:

the collection and distribution of gambling revenue under the Act,
including the CSL

harm minimisation programs funded by the CSL and other measures
under the mandatory code.

grant programs for sport and recreation clubs.
The audit will involve:

the TLGC and Liquor and Gaming Commission within Treasury

Gamblers Help Services within the DHHS

Non-Government Organisations (NGOs) that provide services funded by
the CSL

the Communities, Sport and Recreation division within the Department of
Premier and Cabinet.
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Gambling revenue and harm minimisation
Performance audit — Audit Planning Memorandum
Audit criteria
Criteria
1. Is the due revenue received
and is the correct amount of
CSL distributed?
2. Is the CSL managed
effectively?
3. Are the harm minimisation
measures effective?
Sub-criteria

Are the correct taxes and charges collected
by the State government?

Is the correct CSL gathered?

Is the CSL money distributed in compliance
with the Act?

Are the CSL activities adequately monitored
and reported?

Are targets and performance measures set
for CSL activities?

Are the grants programs managed
effectively?

Are harm minimisation actions well-planned
and based on appropriate and robust
research and analysis?

Is the research funded by the CSL driving
measures to help minimise the harm for
problem gamblers?

Are harm minimisation measures
implemented in accordance with legislation,
the mandatory code and better practice?
Compare with other jurisdictions.

Are the harm minimisation measures
reducing the number of problem gamblers?

Are programs for the rehabilitation of
problem gamblers preventing relapses?

Do other health services funded by the CSL
contribute to harm minimisation for problem
gamblers?
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Gambling revenue and harm minimisation