Local Markets

1
Smoking Gambling Understanding the
relationship exploring the problem

• Presented by Mr Craig Shepherd PhD(Qual),
  Principal Economist, National Institute of
  Economic and Industry Research (National
  Economics)
• Authors of
• The Economic Impact of Gaming, Victorian Casino
  and Gaming Authority (VCGA), 2000.

2
Previous Work

• Our organisation and its director, Dr Peter
  Brain, have undertaken a number of reports into
  the economic impact of gaming, including
• The Economic Impact of Gaming, Victorian Casino
  and Gaming Authority (VCGA), 2000.
• This study raised important questions about the
  regional impacts of gaming in Victoria, the
  effect of gaming on household wealth creation,
  and the link between smoking and gambling.

3
Smoking and Pokies

• This presentation uses household surveying to
  identify potential relationships between gambling
  and smoking.
• ABS Household Expenditure Survey 1993/94, 8000
  households, includes information on over 400
  types of expenditure, with separate categories
  for tobacco and Electronic Gaming Machines (EGM).
• ABS Household Expenditure Survey 1998/99, ?7000
  households, provides information on over 700
  types of expenditures.

4
1993/4 Household Exp. Survey
5
1993/4 Household Exp. Survey

• Tobacco expenditure was approximately twice as
  high for those people who also used EGMs
• Expenditures on tobacco of non-EGM players in NSW
  and VIC were almost identical
• Incidence of tobacco expenditure was almost twice
  as high for EGM players than for non-EGM players

6
1998/9 Household Exp. Survey
7
1998/9 Household Exp. Survey

• Differences in the incidence of smoking between
  EGM users and non-EGM users have reduced.
• However the differences between the amount spent
  have not diminished.
• Note that 1998/99 incidence of EGM usage on a
  socio-demographic corrected basis was 7.2, which
  is consistent with other estimates of usage.
• Correlation between smoking and EGM means that
  the incidence of both is 42 higher than that
  explained by smoking or EGM separately.

8
The Bottom Line
9
The Bottom Line

• The impact in terms of revenue is the key feature
  of this analysis.
• This result should also be placed within a
  context of the differences that exist between the
  number of problem gamblers and the revenue
  derived from problem gamblers
• Problems gamblers (SOGS 5) ?24.3 of regular
  players or 2.3 of population
• Problems gamblers (SOGS 5) ?39.1 of revenue

10
The Bottom Line

• The change in legislation in Victorian with
  respect to smoking in gaming establishments was
  forecasted to reduce gaming losses based on this
  research
• The degree to which revenue could be expected to
  fall will relate to whether or not problem
  gamblers who are smokers are likely to reduce
  expenditure
• If all co-dependents acted like non-smoking EGM
  users revenue would fall by 25, however if only
  smoking non problem gamblers reacted to the ban
  by losing as much as non-smoking non-problem
  gamblers the revenue reduction would be 15.

11
Smoking, Gambling and Financial Hardship

• 1998/99 Household Expenditure Survey also
  includes a large number of questions that relate
  to financial hardship.
• Questions asked include the ability of a
  household to raise emergency monies and reasons
  for households not undertaking various
  activities.
• Respondents are also asked to identify recent
  previous types of financial hardship experienced.

12
Smoking, Gambling and Financial Hardship

• The analysis undertaken must remove the impact of
  income on the results in order to leave only the
  effects of the joint activity of smoking and
  gambling on poker machines.
• The analysis relates to the NSW, Victoria and
  South Australian households only.
• Utilises only the fact that a respondent reports
  gaming activity rather than the amount reported
  to have been won or lost.

13
Smoking, Gambling and Financial Hardship
14
Smoking, Gambling and Financial Hardship
15
Conclusions

• EGM players use more tobacco than non EGM
  players.
• EGM players that use tobacco lose more that those
  that don't.
• People that smoke and play pokies are more likely
  to be facing financial hardship than those who
  simply smoke or play pokies.
• Smoking and playing pokies reduces the
  participants quality of life.