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The stereotypical Australian is a sports lover and a gambler.  Social analysis supports this stereotype.  In Australia most forms of gambling are legal; including gambling on sport.  Australians are said to lose more money (around $1,000 per person per year) at gambling than any other society.  In addition we, in common with other societies, gamble in many less obvious ways.

In recent weeks the Australian preoccupation with gambling has been in the headlines in Australia on more than one level. 

 

Gambling in the clubs

 

After the 2010 Federal election the Gillard (Labor) Government needed the support of the Greens and independents to form and retain government.  One of these independents (Andrew Wilkie from Tasmania) had campaigned on the need to curtail problem gambling associated with poker machines and made government action on this a condition of his support.

But because of a recent deal giving the Speaker’s position to a renegade member of the Opposition (Peter Slipper) Wilkie’s support is no longer critical; and so the Parliamentary Labor Party has reneged on the deal.   Needless to say this has raised some eyebrows; and Mr Wilkie’s ire.

Gambling has always been controversial in Australia.  For some the thrill is akin to a ride on a roller-coaster; more than compensating for the long, or short term, probability that the player will be out of pocket. 

Those who enjoy gambling say the ‘wowsers’ that want to stop people having a ‘flutter’ are the same ones who condemn drinking or smoking; sexual liberation or dangerous sports.  The other side argue that gambling robs the already poor; ruins families; and makes children go hungry or even homeless.

Mediating this debate in Australia are an unusually large number of gambling researchers who consider the socio-economic, psychological, criminal and emotional impacts and so on.  It would be interesting to learn how Australia ranks in gambling related research projects per capita.

Principal among the societal concerns is the plight of ‘problem gamblers’. 

The vast majority of Australians gamble at least once a year, buying a lottery ticket or ‘scratchy’ or having a TAB bet or entering a sweep on the Melbourne Cup.   It is difficult to buy a newspaper or magazine without standing at the back of a line of gamblers buying weekly lotto, scratchy or other similar tickets.  Newsagents are now more akin to gambling shops than paper sellers.  Nevertheless only about 12% of Australians gamble in a significant way, more than a few dollars a week. 

Of these more committed gamblers about one in six are considered to be problem gamblers, where their losses seriously degrade their economic, social and psychological wellbeing.  It is this 2% of Australians who collectively contribute around a third of approximately $A20bn per annum lost annually.  Around half of this passes through poker machines upon which sporting and service clubs depend for up to 80% of their revenue.

Once the province of criminals and the demimonde, gambling is now the mainstay of many legitimate clubs and pubs, taverns and bars, particularly in Eastern Australia.   These claim that without gambling revenue: sports would not be supported; pub music and stand-up entertainment would be lost; community gathering places would close.

State governments also rely on the revenues from gambling; raking off around 40% of the profits as tax.    Indeed off-course betting shops (TAB) and lotteries became legal under State government auspices and have long been said to fund ‘schools and hospitals’.  The Sydney Opera House was initially funded through a lottery.

Thus gamblers have provided many public services for the benefit of non-gamblers.

Some in government dismiss this inequitable burden on gamblers as a ‘tax on stupidity’. 

But why do some people become so addicted to gambling that it goes beyond the occasional adrenaline thrill of expectation dashed; or sometimes satisfied?

 

 

Aspirational gambling

 

The lure of unearned or windfall wealth surely plays a large part; thus television and cinema ads for lotteries suggest they can achieve one’s unattained dreams:  like buying each of the children a house; bathing in money; or telling the boss where to go.  And they inform viewers: ‘you have to be in it to win it’: you can never hope to achieve these dreams if you don’t buy a ticket. 

The facts that: the vast majority of ticket purchasers will be financially worse off as a result of the lottery;  that buying a ticket only imperceptivity improves the chances of winning;  and that the larger the lottery the more remote the chance of winning is; are not mentioned.

Aspirational gambling afflicts the poor and unqualified, the discontent and social strivers more than the comfortably secure.  It is not just a tax on stupidity; it is a tax on the poor and socially or psychologically vulnerable.

But the potential achievement of dreams is not the only lure.  Some very wealthy people are significant gamblers.

 

 

Compulsive gambling

 

An early win is said to have a deep psychological impact that can trigger an addiction in some people.  It apparently affects the sub-conscious at an animal level; embedding a desire to keep returning to the beneficial behaviour.  Some may be genetically or circumstantially less able to bring this under rational control than others; and addiction follows.

The present Australian argument is around ‘poker machines’ (electronic gaming machines).  There are some 200,000 in Australia and they generate more gambling revenue than any other source. These are now very sophisticated computerised devices; specifically designed to enhance the gambling experience.  They are also a significant ‘elaborately manufactured’ export.

By syndicating jackpots very large payouts are possible and when many people play, such large ’jackpots’ provide an ongoing incentive to players similar to a lottery.  This also encourages players to bet larger sums in the hope of winning a large sum.  Since syndicated jackpots have been in place gamblers have invested increasingly large sums at a sitting; with their losses growing at around 17% per annum.

These occasional large jackpots are tailored to keep gamblers playing as immediate losses accumulate.  Gamblers will even ‘reinvest’ (squander) substantial winnings short of the jackpot. 

It is said that in Las Vegas over-the-hill celebrities and attractive women are engaged to ‘schmooze’ big winners to keep them playing until they become losers again.  Poker machines do this through super jackpots.

Poker machines play on basic motivations that humans share with many other animals.  They have a very small house ‘take’ per bet so that gamblers are frequently rewarded by small wins.  In many laboratory animals and birds this initiates a desire to keep trying or pecking. 

Poker machines also provide means of betting very frequently.  No longer does the player pull a handle now a rapid button press (or peck) initiates one or more spins.   Thus the machines accumulate large revenues to the house more quickly than similar but slower games of chance like roulette.

Electronic gaming machines are closely regulated and are seldom rigged (as might be a roulette wheel); but they don’t need to be.  If a poker machine owner or designer noticeably increases the ‘take’ it reduces the playability of their machines and thus lowers the net revenue resulting.  So the ‘take’ is carefully ‘tuned’ to keep the gamblers playing, without impacting total revenue; not too much; not too little. Years of careful tuning have matched the machines closely to the average player’s nature and psyche.

Machines are carefully positioned to maximise income.  Owners know that one person winning provides a similar psychological incentive to all players present to keep paying:  ‘if they can, I can’.  Thus machines are grouped into rows, often in subdued sound and lighting, and make a considerable noise with a light display when anyone wins; losses are of course silently consumed.  Jackpots are extremely noisy and visually stimulating.  The ready availability of alcohol further lowers inhibition and increases the gamblers’ losses.

 

 

Gamblers’ luck

 

Many gamblers believe in luck; not of the statistical kind: a one in six chance that a die will fall with the single spot uppermost; but in some working of fate making it so.  

Further, many believe that previous throws affect the next outcome; if six has come up three times in a row then…  something (it is on a run - or it is about to change).   

Many believe that something they do affects these outcomes; they park in a particular spot; carry a particular object; wear an article of clothing; say or don’t say certain things; say a prayer to something; and so on.

Human beings have a, probably survival related, biological, predisposition to a belief in this kind of magic.  Because, like all higher animals, we need to learn from experience to survive, random success or failure, quite beyond our control or influence, is nevertheless attributed to an action we have taken; or to unrelated circumstances in which it occurred. 

Our ability to disentangle mere circumstance from cause and effect requires proper analysis of each situation, based on effective educational development.  This is not an innate human skill and in many this ability has not been properly developed by their upbringing and understanding of the world:  ‘He was struck by lightening because: waving a metal golf stick in the air; in an exposed damp field; wearing spiky shoes; during a thunderstorm; caused electrical charge to accumulate around him.  Not because he blasphemed; prayed to the wrong god or idol; walked under a ladder; or had porridge for breakfast.’

Poker machine owners and designers play on these inherent, but entirely irrational, magical feelings and beliefs humans have by pandering to them.  

For example they make constant references to ‘luck’ as if it had an influence on the outcomes; they encourage regular players to believe that the past spins have an impact on future spins; or that some machines pay better for particular people than others; for example by allowing machines to be ‘reserved’ during regular player breaks. 

Another example is the lore that it is unlucky or bad manners not to pull-off a win, when the rational way to play is to invest as much as you care lose in the interests of ‘having fun’; but to immediately take the money the instant you find yourself ahead; and walk away.  Unless it was a very large jackpot you will still lose in the long run, if you play again; but it will take longer.

Like an unrigged roulette wheel or dice game or the Australian favourite ‘two up’ (played with two pre-decimal pennies), poker machines are effectively random event generators with every throw or spin a new event.  Each throw or spin is completely unrelated to anything that went before; and each is as likely, or not, to win or lose according to the mathematical probability inherent in the game.  

As in all such games there is an, equally random, combination that returns the gambler’s stake to the house.  Thus the house will always win and the gamblers collectively will always lose; and the longer the game runs, or the faster it runs, the more the house accumulates.

 

 

Breaking the spell

 

The presently debated proposal to mitigate problem gambling is for heavy poker machine gamblers to pre-commit to a particular sum that they are prepared to lose before playing.  This is designed to create a break in the player’s engagement with the machine and to allow a cooling-off time before again attempting to go after the jackpot. 

An alternative or complementary proposal is to limit the amount of money a machine can be fed in an hour. 

The impact of either will obviously be a cut in poker machine revenue.  The clubs and pubs have ‘pulled out all stops’ to prevent either measure being effectively implemented.

The morality of continuing to extract a disproportionate part of their profit from the poor, socially dysfunctional and mentally ill does not seem to have emolliated their position or tempered their, apparently very successful, campaign.

 

 

Gambler’s skill and knowledge

 

While problem gambling is mainly associated with poker machines; there are, in addition, many gambling options that are not really ‘games of chance’ in the strictest sense of having a truly random outcome.   Some involve skill and/or guile like many card games; others special or expert knowledge; like betting on horses, dogs or sport.   

Although there is still an element of chance these are, almost by definition, biased in favour of the expert or insider; sometimes grossly so.  Gamblers and punters who do not have the required skill, or access to special knowledge, do well to avoid them completely.  Poker machines are a better bet for the unskilled or ill-informed. 

But promoters of gambling on a non-level playing fields go to some lengths to persuade ‘punters’ that they are among the favoured and can thus beat the odds and join those with big houses;  when the vast majority will lose some or all of what they already have to the real insiders.

 

 

No loss gambling

 

It is possible to gamble so that the global losses are zero, across all the gamblers, and yet retain the individual thrill of taking a risk and loosing or winning.  There is for example a long tradition of making private wagers on all kinds of things.

If you really want the thrill of a gamble, without paying for club or casino management and dividends, sporting teams or hospitals, why not do what some do in New Guinea; get a bunch of mates together and all throw your week’s earnings on a table; then draw straws, split cards or throw coins for who takes it all.  Of course in New Guinea the winner has to ‘shout’ his mates to a night out on the town each Saturday but there is no direct club or casino ‘take’; and no government taxes. 

 You can do this in Australia too.  But why not just participate in a workplace football pool or have a private game of cards at home with friends?  What you lose your friend picks up; but it might be reversed next time.

 

 

Institutional Gambling - Gambling on the weather

 

Since 2012 some flood prone towns on the plains of Queensland and New South Wales have been saved by their investment in levees.  You might think levees are simply a disaster mitigation device or risk management outcome and have nothing to do with gambling.  But levees are often a significant capital investment for a town; both in themselves and in associated problems they create for road and rail and prevention of backflow through sewerage and water drainage infrastructure during a flood.     

Their substantial cost needs to weighed against the probable cost of flood damage to property and infrastructure if they were not in place; or not effective.  The cost of a levee rises rapidly with increasing prospective flood heights and the area protected.  If they are overtopped sections of levees at that point are often destroyed by a rush of flood water and the resulting redirection and concentration of flood water may exacerbate local property damage.

The first gamble lies in how high is high enough to save a town without squandering resources on overinvestment.  This judgement usually relies on the records of previous floods.  But in addition the probable frequency of major flood events needs to be considered.  It is financially courageous (foolhardy) to build a levee today if it will probably not be needed for another two hundred years. 

Thus the gamble local governments take:  build an effective levee for all possible flood events; build one that will just protect against frequent flood events; or more cheaply just contour the landscape and plant trees in riparian areas; to slow floodwaters and minimise water damage when floods do occur.  In the latter case a town and its property owners simply accept the damage and rebuild or relocate assets to be more flood resistant next time.

The rest is up to the weather, as, like the flip of a coin, it is quite possible to have two one-in-a-hundred year flood events in quick succession or none for the next thousand years; by which time the town may well be gone and people will wonder what this ancient structure was for. 

Few local councillors would be willing to sacrifice their name on a new civic or swimming centre in preference for a levee that may very likely never be used in their term of office; or even in the lifetime of their children. 

Of course during or after a major flood it is a different matter.  Short of being seen to wade in, to help people recover belongings and save pets, what can a politician do but promise some future flood mitigation strategy?

Our hats go off to the Queensland town of St George that has just managed to build four kilometres of temporary levee in three days along its lowest edge, saving most of the town; and sacrificing only those properties nearest the Balonne River. 

 

 

Systematic failure

 

But the substantial Queensland Government investment in the Wivenhoe Dam, promised in part to mitigate flooding in Brisbane, seems to have gone awry; or at least so the lawyers and politicians say.  They are presently hanging the dam management team out to dry.

In their defence the engineers point to the extraordinary fluctuations in the weather.  The dam was close to empty three years previously due to drought and the political flack was due to a lack of water supply.  Then came the deluge.  After weeks of very heavy rain, a year ago the dam was close to being overtopped. Valves had to be opened and parts of Brisbane got flooded.  But say the dam management; the flooding was a full meter lower than the 1974 flood level; when there was less total water in the system.

This is another gamble politicians take.  What if you build a dam or a levee and it doesn’t work; or it works to a degree that can be debated and there is still consequential damage?  You’d better hold and enquiry.

When the dam managers deliberately turned on the taps did they do it too soon or too late, too much or too little; is there a protocol; was it followed?  If a protocol existed and was followed; who wrote it; and on what authority?  Maybe there is a lesson in this for the managers of other dams, dykes and barrages worldwide in an increasingly litigious society.

Apparent gamblers against natural disasters include the insurance industry.  But they are gambling in the same way as a casino does; their customers place the bets in the form of an annual premium; and these premiums are statistically matched to the global value of claims in such a way that over quite short periods premiums exceed claims.  Like a casino, insurance companies process the bets and take a cut of the throughput to meet substantial management expenses and provide a profit for their shareholders.    

Perhaps the greatest gamblers financially in all of this are the people who buy property in flood prone areas. 

As flood insurance premiums tend to be prohibitively high for property that is at serious risk of being meters under water, owners  have several strategies:  self-insure against flood damage, (that is simply repair the damage at their own expense should a flood occur); try to get the general taxpayer to underwrite the risk by subsidising some of the insurance premium;  insure against something else, like overflowing drains or a leaking roof, and then argue about how much water damage constitutes a flood; or join a class action against someone with money, ideally a dam management team or local government may have interfered with water flows (did anyone seed the clouds around that time?).

In a minor glitch at St George (see above) there was no wastewater backflow prevention in place so the temporary levee also revealed a sewerage solution: all over the place. Will someone want to sue?

 

 

 

 

 

 


There are several other references to gambling on this site:

 

Jack Lang had his election campaign advertising paid for by a man appropriately called Swindell.  Swindell held the patent rights for the 'tin hare' that made gambling on greyhound racing practical.  Greyhound racing became hugely popular among poorer and working-class Sydneysiders during the Depression, who could own a dog, enjoyed the excitement and saw gambling (or rigging races) as the only way of escaping their poverty…  

read more.

 


…there will be just one future; and it will be as it will be.

Luck is another matter.  It is the human anticipation and interpretation of, and reaction to, providence.

When I flip a coin it will come down either heads or tails. If the outcome of the flip is advantageous to me (say I'm a cricket captain or betting for money or deciding something else), I'm lucky; if not I'm unlucky.

In isolation from human affairs the flip of a coin does not involve luck.  It is inevitable that it will fall one way or the other. The actual outcome depends on the circumstances of the flip (the physics of its trajectory and its landing). 

Gamblers use this simple device to create an apparently random result that is too complex to be predicted, calculated or guessed.  We might call this effectively unpredictable yet inevitable outcome: 'destiny' or 'fate'; the work of providence: 'what will be, will be'… 

read more

 


Many ordinary people believe that their life is best understood as a series of experiences; meeting friends, swimming, eating, missing the bus, visiting Rome, getting caught in the rain and so on.

Some believe that they are only living to the full when they are having some extreme experience. They might like risking physical injury or like extreme sports like skydiving, bungee jumping or white water canoeing. They may like taking financial or sexual risks or they might take drugs or like to party. Some of these look for ever stronger experiences: sexual; pleasurable; mind altering; or painful. Sado-masochists, serial killers, sexual enthusiasts, seekers of religious ecstasy, drug takers, gamblers, sport and exercise addicted and even the lovers of fine foods are each in their way living for the next experience… 

read more

 


Jedenfalls bin ich überzeugt, dass der nicht würfelt. (At any rate, I am convinced that He [God] does not play dice)

Not long ago (less than a lifetime) some scientists and philosophers (Niels Bohr and others) argued that some things must be able to go different ways even when the starting conditions are exactly the same.

Albert Einstein… did not like this idea and argued that 'He does not play dice'.

Bohr won the argument by using the 'Heisenberg Uncertainty Principle' that says that you can never accurately know both a particle's position and its momentum… 

Maybe some events in the universe can jump different ways, given exactly the same starting conditions…

There is no complex decision you can make that might not turn out unexpectedly. We can reduce this uncertainty by knowing as much as possible about the related events but we can never fully predict how related events will flow…

Of course in life we find there are lots of things too complex to predict, from horse races to our own future. But the uncertainty principle seems to say that some aspects of the future are unknowable even if we could get past the complexity.

It is important to know how much we can't know (is impossible to predict).  It must be very small.  If a lot was unknowable, we couldn't rely on gravity working tomorrow or things being where we left them, or anything working the same way twice… 

read more

 


For an interesting schools primer on gambling in Australia...

click here

 

 

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