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Pokies Revenue in Australia

Fri, Jun 21, 2:33pm by Noah Taylor

Last Updated Fri, Jan 17, 4:54am


Australia’s gambling industry is valued at tens of billions of dollars and although sports and horse race betting have a high profile, it is the pokies that still command the majority of the gambling dollar. Pokies revenue is big business in Australia.

Poker machines, including online pokies, comprise a majority of 56.7 per cent of all dollars gambled in Australia – easily more than double all forms of betting at 20.7 per cent, including sports betting (5.2 per cent) and horse racing, harness racing and greyhounds (15.5 per cent) of the overall gambling pie, according to Roy Morgan.

Lottery and scratch tickets make up a further 14.2 per cent of Australia’s gambling dollars, followed by table casino games (5 per cent) and Keno at 3.4 per cent.

Operators Have Legal Obligations To Donate Revenue

In Australia, gambling operators are required by law to donate some of their revenue for community and charitable purposes. In the state of Victoria, club pokies operators must document their contributions annually. This qualifies them for a reduction in gambling tax.

The Conversation found that clubs donated mostly to themselves in a 2019 article, which states that a number of club categories ‘community benefits’ as their own operating expenses.

This is permitted under the regulations, but is at odds with the claim that clubs provide support to the community. In Victoria, the Victorian Responsible Gambling Foundation estimated the social costs of gambling in the state to be $7 billion in 2017. Gambling losses in the state were $5.5 billion, with state government revenue from gambling at $1.9 billion. The Victorian community benefits scheme is unique in its relative transparency.

Clubs are required by law to spend at least 8.33 per cent of total pokies losses on community contributions. This allows clubs to claim philanthropic, charitable or benevolent contributions, as well as operating expenses. If the target is met, clubs enjoy an 8.33 per cent tax break compared to hotel operators.

Online Pokies Revenue

The popularity of pokies in Australia is seen overseas and not limited to just land based clubs, hotels and casinos. While regulation is different from one country to the next, the availability of online services means people look for ways to be from the comfort of their own home. Online casinos can offer better return to player percentages compared to land based casinos due to the lower operational costs.

pokies revenue

Research by the Centre for International Economics consultancy found in that yearly taxes from poker machines exceeded $5.5 million in Australia. This helps to bankroll public infrastructure and services. Poker machine operators and manufacturers are under increasing scrutiny in Australia. Here, pokies losses have grown at roughly double the rate of inflation, account for about half of the country’s $24 billion of overall gambling losses per year.

State government’s budget papers are forecasting increases in their pokies tax revenue in coming years. In Victoria, $1.09 billion was derived last financial year, which is expected to jump to $1.16 billion by 2021. Pokies taxes in New South Wales are projected to rise even more sharply, from $1.5 billion to $1.8 billion in the same period.

Australian Pokies Revenue by Region

New South Wales

Poker machine profits in New South Wales’ pubs and clubs have soared to $6.5 billion over the past year, rivalling the GDP of countries like the Fiji. The surge in profits is due to a boom in pubs. Greater Sydney hotels raked in $1 billion on pokies profit in the six months to June 2019, while clubs maintained a near $2 billion profit, according to data from Liquor and Gaming.

There are 69,466 gaming machines in NSW clubs, 22,652 in hotels and 1,500 in the state’s casino, according to figures from 30 June 2018. New South Wales has removed more than 1,350 machines or 1.5 per cent of the state’s total machine count since June 2017. However, profits on remaining machines have risen 5.5 per cent.

New South Wales’ sole casino in Sydney’s Star Casino.

Victoria

Victoria’s only casino is Southank’s Crown Casino, which has 2,682 poker machines. A 2018 report reveals that gamblers lost $450 million on Crown’s Melbourne machines and $265 million on its Perth machines in the 2017-18 financial year. Victoria has almost 25 per cent of Australia’s population, but only 15 per cent of its gaming machines.

A recent decline can be attributed to the Victorian government’s end to a 20-year duopoly by Tabcorp and Tattersalls. They were allotted 13,000 machines each that were housed in bigger venues that made the most money. In Victoria, pokies are required to have a payout percentage of 87 per cent or higher.

The use of $100 bills for gambling was banned in 2017 in Victoria. The only exception is at Crown Casino, where players with a VIP loyalty card can place $100 bets.

Queensland

Queensland has more than 45,000 gaming machines, with the state government requiring a minimum house edge of 90 per cent in casinos and 85 per cent as a floor in clubs and pubs. Queenslanders lost more than $6 million a day in 2018, with $2.4 billion in total lost in 2018. The Queensland government received $718 million in revenue from gaming machine taxes in 2017-18.

The state has a number of casinos, such as Treasury Casino in Brisbane and Star on the Gold Coast.

Northern Territory

There is a limit on how many gaming machines are allowed to operate in pubs and clubs in the Northern Territory. The limit is currently at 1,734. Venues are restricted to up to 20 machines if they have a hotel licence and 55 in a club.

The NT government collects more than $60 million a year from the region’s $150 million plus pokies spend.

South Australia

Recent data by the Centre for Economic Studies shows that South Australia’s had a dip in pokies expenditure in 2019 by 0.1 per cent, taking the total net gambling spend to $681.6 million, with the average money spent per adult falling by 0.9 per cent to $496. That is its lowest level since 2000/01.

South Australia recently introduced a bill that allowed its poker machines to accept banknotes.

Australian Capital Territory

ACT clubs are required to spend 8.8 per cent of the money raised from gambling machines on community groups. The ACT is cutting the number of pokies machines in the region, including at its only casino, Canberra Casino. Clubs that opt to go pokies-free will be rewarded a 25 per cent bonus on top of any other incentives they claim.

Small and medium clubs were eligible for up to $12,000 for every poker machine they voluntarily surrendered in 2019.

Tasmania

The Tasmanian government received about $31.2 million in 2016-17 from pokies revenue in pubs and clubs. This amounted to to 3 per cent of the state’s tax revenue.

The Federal Group, which operates the state’s only casino has a monopoly on gaming machines in the state. That is due to expire in 2023.

Western Australia

The only poker machines in Western Australia are at the state’s two casinos – Burswood Casino and Crown Perth.

Western Australia is excluded from gambling expenditure analysis.