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Gambling industry wins political game at democracy’s expense

This article is from the November 21 issue of Australian Financial Review Digital Edition. To subscribe, visit https://www.afr.com

Authors: Elizabeth Baldwin and Kate Griffiths  

The gaming industry adds little to the economy, but it is a big player when it comes to the political influence business.

 

The gambling industry’s tentacles reach deep into Australia’s corridors of power.

 

The Australian Financial Review has revealed recently that Responsible Wagering Australia, the industry body representing online gambling companies such as Sportsbet and bet365, paid for a lavish birthday lunch for federal Communications Minister Michelle Rowland, who is partly responsible for regulating the industry. 

 

Sportsbet also hosted Anthony Albanese at the National Press Club weeks before the 2022 election.

 

You might be appalled by this behaviour, but it’s just the tip of the iceberg. The gambling industry’s influence on both sides of politics goes far beyond lavish lunches and gin tastings

 

Grattan Institute’s 2018 report Who’s in the room? showed that heavily regulated industries – where government laws have a big impact on business profits – are big spenders on lobbying and political donations. 

 

And the gambling industry is a major player in the influence game. In 2017, we calculated it made up less than 1 per cent of gross value added to the economy but accounted for 10 per cent of declared political donations. Recent analysis by the Centre for Public Integrity suggests the industry’s donation activity has continued apace, setting a record of $2.13 million in 2019. 

People affected by gambling harms can’t wine and dine ministers, and they lack lobbyists’ insider connections.

 

Lobbying data is murky, but research published last month by academics at the universities of Melbourne and Queensland found gambling beat out the alcohol, tobacco and food industries in terms of the number of third-party lobbying firms hired. 

 

The gambling industry delivers the economic contribution of a mouse but seeks the political influence of an elephant. 

 

Online gambling companies are relatively new players in the influence game, but their importance is growing quickly. Total Australian spending on online gambling increased 72 per cent from $5.57 billion in 2019 to $9.56 billion last year. 

 

But while the players may be different, it is the same game clubs and casinos have been playing for decades to protect their profits. 

 

When the Gillard government proposed pokies reforms in 2011, ClubsNSW showed up with guns blazing. Alongside other hotel and club industry associations, it ramped up political donations, favouring the Coalition, and ran highly effective scare campaigns in marginal seats. The clubs won: Gillard watered down the legislation, and even these modest reforms were repealed when the Abbott government won office in 2013. 

 

The Tasmanian ALP also proposed big pokies reforms before the 2018 state election. Industry groups showered the state Liberal Party with $400,000 worth of donations – nearly 90 per cent of its declared donations. Pro-gambling donors gave nothing to Labor. The Liberals walked away with the election. 

 

People with a stake in public policy are entitled to put their views to governments. The problem is that in our current system, access is horribly one-sided.

 

People affected by gambling harms can’t wine and dine ministers, and they lack lobbyists’ insider connections. The industry peak body’s CEO is a former chief of staff to former Coalition social services minister Anne Ruston. He joins a long line of former politicians and political advisers touting for the gambling industry – including former Labor communications minister Stephen Conroy (who became CEO of Responsible Wagering Australia) and former NSW Liberal premier Barry O’Farrell (CEO of Racing Australia from 2017 to 2019). 

 

The power imbalances are particularly stark in the case of gambling, which profits off some of the most vulnerable people in our community. Though gambling-related harms can affect anyone, they are particularly prevalent among groups that are more likely to be voiceless, including people living in poorer areas, and Aboriginal and Torres Strait Islander people. 

 

Politicians dining out on big gambling’s dime are not necessarily breaching any rules. That’s why reporting on these lavish lunches is so important. Australians need to know who has the ear of our public officials. 

 

We need much better information about who’s in the room (or the glitzy restaurant), by publishing ministerial diaries, strengthening the public reporting of lobbying activities, and clarifying conflict-of-interest rules for all parliamentarians. Transparency can create political costs that might make our politicians think twice. 

 

We must staunch the flow of dark money into our politics by lowering the disclosure threshold for donations from its current level of $16,300, requiring that multiple donations from the same entity be reported together, and mandating timely reporting. 

 

Ultimately, we need to stop the fundraising arms race, to reduce political parties’ dependence on big gambling and other major donors. The best way to do this is to cap political advertising expenditure during election campaigns. If parties can spend only a limited amount, ministers will be under a lot less internal pressure to raise funds. 

 

Until we change the rules, regular punters are doomed to lose this rigged game. 

 

Elizabeth Baldwin and Kate Griffiths are researchers at Grattan Institute. 

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