The long-awaited report on the NSW trial of cashless gaming has landed, and industry is calling the exercise a complete failure, as the oversight panel admits it could never achieve what was hoped.
In response to electioneering and the NSW Crime Commission findings that a significant amount of the money put into EGMs was the proceeds of crime, the new Minns government set up the Independent Panel on Gaming Reform, with an executive committee, to oversee a cashless gaming trial (the trial) and provide advice by November 2024 on: cashless gaming, the $100 million harm minimisation fund, and a Roadmap for Gaming Reform in NSW.
“The panel has a big job to do, but we have the balance right to ensure we have an evidence-based roadmap for future gaming reforms,” announced Premier Minns at the time, in July 2023.
David Harris, Minister for Gaming and Racing requested the Panel provide advice on election commitment issues, including reducing cash input limits on older machines, expanding the self-exclusion register, third party exclusion, and the use of facial recognition technology.
The initiative was quickly flooded with volunteer venues, but soon ran into hurdles, with half the original 32 venues dropping out, along with many of the active players, particularly after Aristocrat withdrew midway, which meant venues with only their machines could no longer be involved.
Over the past 18 months the Panel has engaged with an assortment of stakeholders and experts and reviewed 218 papers and reports, as part of its consideration and deliberations to inform the Roadmap. It held its sixteenth and final meeting on 25 November.
The Executive Committee said the recommendations provide Government with “a balanced way forward on prioritising the implementation of critical harm minimisation measures whilst also providing industry with sufficient time to transition in a manner that protects sector viability and employment”.
Committee chair Michael Foggo conceded that the panel realised early it would not be possible to measure the impact on industry unless the trial was statewide and mandatory. The report, written by 3Arc, included interviews with players about why they did not want to participate, which influenced the recommendations.
The Roadmap’s primary proposal was for a central database for poker machine players that should require all players to be identified and linked to a player account. It’s said that this would mitigate money laundering.
This central database is recommended to be rolled out in three stages, becoming mandatory by 2028. A phased implementation is thought to allow voluntary adoption until the system is fully operational, but importantly, this would be subject to the NSW Government completing additional analysis on the impact on industry.
Leaning on tech-based solutions, it’s offered that the centralised database should be interoperable with other key systems, and facilitate the collection of data, to enable automated risk monitoring.
The Panel noted “there are technical challenges to be worked through for this”.
Player accounts would be set up with default time and spend limits, but while using an account would be mandatory, limits would be non-binding and players could elect to opt out of them, which University of Sydney gambling researcher Sally Gainsbury labelled a ‘notification’ rather than an actual deterrent.
A new system would reduce the threshold for paying out winnings in cash, but some cash would still be permissible.
The Committee also noted that a buy-back scheme “will be costly” and recommends pricing of $30K for a gaming machine entitlement.
Condemnation of the Roadmap’s plans has been swift and near universal by industry, despite both the Australian Hotels Association and ClubsNSW being represented on the advisory panel.
The Association proffers that given “the non-existence of evidence” it objects to the account system, stressing the Panel’s well-defined Terms of Reference that “Evidence and trial research findings were required to support any recommendation of mandatory account-based gaming”.
Further to this, says the AHA, it was specified the Panel only make recommendations after taking into consideration infrastructure investment, and the impact on industry and employment.
“No consideration of these factors has been made, yet the Executive of the Panel has made a recommendation for a technology that was not trialled, assessed or costed,” said the Association’s response.
“The research findings of the cashless gaming trial are embarrassing and not credible.”
Of particular importance was the need for “additional analysis regarding impact on industry”, with consideration for regional areas, which the AHA insists is “vital work”.
It was noted that the Executive Panel’s ‘Research Report’ relied upon a survey of only two players – who did not even use the mandatory account-based technology recommended – and an interview with one player.
And that no consideration was given to whether such a system might cause gamblers to migrate to other less restrictive forms of gambling, or any evidence provided to support a mandatory account-based system, simply “because it was not trialled”.
ClubsNSW echoed much of the AHA’s sentiment, pointing out that the low participation and adoption of the trial “should necessitate a cautious, measured, voluntary approach to implementation of account-based gaming” rather than the short timeframe being put forth for a statewide, mandatory rollout.
The Clubs association sees it as “concerning” that the Executive Committee recommended mandatory account-based play when only voluntary account-based play was trialled.
“The Panel was to make recommendations about account-based gaming (and other reforms) after considering the infrastructure investment required, the impact on industry and the impact on employment.”
This argument comes into focus considering that when Crown Casino was forced to introduce mandatory account-based play it subsequently cut over 1,000 jobs.
“We are concerned that the Executive Committee’s report will give the Government and other stakeholders a misleading impression that the recommendations have been informed by robust evidence and analysis.”
The Gaming Technologies Association, representing manufacturers and venues, contended that the trial did not achieve the results it might have.
Primary criticism by GTA CEO and Panel member Jinesh Patel was around the trial being too short – less than the stipulated 12 months – and technology-based challenges. These centred on a failure to allow technology providers to leverage existing card based legacy systems, which he says “blew out the timeline and alienated a large segment of the participants”, and failure to approve a TITO provider.
Representatives of gambling harm minimisation groups were predominantly in favour of the Roadmap, although stopped short of endorsing the concept of players being able to opt out of time and spending limits, which it believes could be “dangerous”.
“Without friction, such a system becomes a tap-and-go payment system and could fulfil predictions that people will lose far more money than intended.”
The NSW government has stipulated it will take its time considering the proposals.
