Australians are world-leading gamblers, but the house's winnings are slipping

Australia has been named the gambling capital of the world again, but our overall losses to traditional gambling outlets appear to be falling.

Looks like Australia is the gambling capital of the world, again.

This new infographic from The Economist indicates that Australia generated around $18.4 billion worth of gambling losses (gamblers' total spend minus winnings) in the past year. This means that per capita Australians spend more on gambling than any other country. We’re also ranked number six in the world in terms of overall gambling losses.

It's no surprise that the majority of this result came from poker machines. The issue of excessive gambling on poker machines drove Australia’s political debate back in 2010.

(Source: The Economist)

The Economist earlier published a similar (albeit less detailed) chart using 2010 data. Australia led the pack, but notice that between 2010 and 2013 the total amount of losses per person has fallen by around $200.

(Source: The Economist)

This trend hints at something that the Productivity Commission noted in its 2010 report (PDF) into problem gambling. It published a graph showing a spike and then a plateau in gambling expenditure since 1980.

(Source: Productivity Commission)

The big leap in the graph represents the legalisation of poker machines in various states and territories during the 1990s. New major Casinos like Crown in Melbourne and The Star in Sydney were also opened during this time.

Between 2000 and 2009 this leap in gambling expenditure began to level out. More recent research from Roy Morgan suggests a downward trend in gambling participation, and thus overall spend.

(Source: Roy Morgan)

Further research from the firm has also indicated a slip in poker machine revenues.

(Source: Roy Morgan)

What this data doesn’t really account for is the rise in interactive and online gambling. As the government admitted in its review into the Interactive Gambling Act (PDF) last year, it’s actually difficult to track this trend as many providers of these services are not as closely monitored. Nor are their revenues fully captured by Australia's tax system.

As a point of reference though, the report noted an increase in bookmakers’ phone and internet betting business from $518 million in 2000-2001 to $3.6 billion in 2011-2012. It also argued that the rise of online gambling may make it harder to target and manage problem gamblers.

It will be interesting to see if this trend continues. The skew of the data may come as no surprise to Echo Entertainment, which recently reported a 30.5 per cent drop in earnings. Though, as Stephen Bartholomeusz explained earlier this week, there are more factors at play with Echo than simply a reduction in physical gambling participation.

This trend may also hint at why the casino end of the sector – particularly Crown – now appears to be keen on reeling in high-spending VIPs rather than just relying on ongoing poker machine revenues. It will be curious to see whether these companies make an investment in the digital gambling space, as that appears to be where the industry is heading.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles