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Productivity Commission and Gambling

By Colin Lamont - posted Monday, 15 November 1999

Gambling is in the news both here and overseas. Whilst the Australian Productivity Commission has just published a draft report and is in the process of hearing responses around the country the United States Gambling industry is still digesting this year's first ever, National Gambling Impact Study. Featuring heavily in both reports, but by no means as prominently as the media would have us believe, is the question of problem gambling.

The US report puts the figure much lower than the Australian report. This has led many to suggest gambling is a greater problem in Australia than in the United States. But it may also be that the Australian Productivity Commission's research, based upon different research methods and tools than in the US simply came up with a different result than might have occurred if they had adopted a different testing methodology and certainly a different testing instrument.

One of the problems I have with the Australian test is that it would have to rank as one of the longest and most complex surveys I have ever seen, which would need considerable training before anyone could be competent to administer the test.


The productivity Commission also opted for telephone contact rather than face to face contact in its research which can compound the problem. A lengthy complex questionnaire about general attitudes e.g. abortion, political party preferences, capital punishment, gun controls and so forth may or may not have the potential to skew the result. However the subject of gambling is such that it belongs squarely in the leisure industry area. This in itself presupposes time to spare.

If someone telephones at say 8 p.m. and invites you to participate in a questionnaire which at best will take half an hour the likely rate of rejection will be considerably higher than if the interview is expected to take a few minutes only. The Productivity Commission went for comprehensiveness and built into its testing instrument many safeguards or reassurances to try to avoid fallout by busy people. But there can be no denying that a number of people would exclude themselves from answering a questionnaire of such length particularly if they had no interest in gambling.

This means that teachers with marking or preparation to do, students, professional people who take work home, businesspeople who work long hours and so on, would be unlikely to agree to respond. What I am suggesting is that the sorts of people who would be relaxed about responding to a long questionnaire would be people who have 'time on their hands'.

Take the argument one step further. As the questions become more intrusive and more complex, many would be tempted to abandon the exercise or at best lose interest in giving well considered answers. Now, it is a fact of life that when firms undertake demographic analyses of communities where a club with gaming machines might survive best, one of the indicators they look for is a large population of people with 'time on their hands'. Hence a testing instrument that seeks to cover all the ground as this one seems to have done, might well, by this very action, end up with responses skewed heavily towards likely candidates for club attendances and gaming.

There are other problems with lengthy and complex tests. Those filling in the form might make a final tick in the wrong square, or take a wrong option. The subject might lose interest and the accuracy of answers must deteriorate as might the patience of the subject. The subject might even deliberately throw in a wrong answer or two just to see what the interviewer will say.

I do not in any way want to give the impression that I am certain that the sample was skewed. But if there is any possibility of this occurring then government spending should not be realigned just on the basis of this report.


The other problem I have with the report is that it works with a number of underlying assumptions the most fundamental of which is that an economic rationalist approach is the only way to judge the industry. Postulating that the economic bottom line is the best possible goal and that if you look after that one factor all else will be for the best is hardly convincing to me.

I guess I am in the position vis a vis the Productivity Commission as was Bertrand Russell with the two washer women in Naples. They were shouting at each other from their balconies which faced each other from opposite sides of a narrow street. Russell observed they would argue all day and never agree because they were arguing from different premises.

The Productivity Commission sees clubs as inefficient since they spend money on members in ways considered by the rationalists as unnecessary. The Commission suggests a number of ways of overcoming the alleged inefficiency of clubs. But they fail to appreciate that they are dealing with mutual funds and that it is not the government's role to tell people that they must utilise their own money more efficiently.

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About the Author

Colin Lamont is a former MLA for South Brisbane and an early campaigner for tighter powers for police in domestic situations. Having spent a lifetime active in diverse areas of agenda setting and public policy he is currently completing his Ph.D. in Politics and Public Policy.

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