- »Research Exposes Victoria Gambling Community Contributions
Research Exposes Victoria Gambling Community Contributions
A study published by two authors on Taylor & Francis Online shows that Victoria allocates less gambling contributions than advertised to communities.
The authors of the study also concluded that Victoria owes greater transparency to its constituents and improved governance going forward.
The study at the center of this story is titled, “Gambling’s community contributions: Does the community benefit?”
Its authors are Louise Francis, a PhD candidate at Monash University, and Charles Livingstone, Associate Professor of School of Public Health and Preventative Medicine at Monash University.
According to Taylor & Francis Online, wherein the study is published, shows a received date of February 2019 and acceptance date of September 2019. The official publication date was September 16, 2019.
Background and Methods
The basis for the study was the notion that gambling harm is considerable and widespread, and also impacts society beyond any one individual gambler.
Australian jurisdictions and gambling regulators often support “good causes” with the proceeds from gambling contributions, what the study refers to as a “common legitimization tactic of commercial gambling.”
The study launched on the notion that this legitimization of gambling contributions is “problematic on many levels” globally, and the purpose of the research was to also assess the extent of the gambling contributions and their impact on gambling harm.
These authors also chose Victoria for their research, specifically non-for-profit gambling clubs that qualify for gambling tax reductions on the basis of giving at least 8.33% of their net gambling revenue to community causes. The study looked at 2012-2015 reporting via community benefit records.
A summation of the results showed that community benefits from gambling tax deductions were significantly over-valued.
- 82% to operational expenses (wages, venue maintenance, capital costs, utilities)
- 5% to charitable and philanthropic purposes
The conclusion of the authors was simple: “Victoria’s community contribution arrangements provide limited actual community benefit.”
In general, “greater transparency and improved governance is required.” They said this includes a review of tax exemptions and allowable claims, as well as greater compliance oversight.
Additional Author Comments
In an article published by The Conversation, the authors of the study noted that gambling organizations and regulators fully acknowledge that gambling is a harmful activity. The costs of gambling are prevalent in communities, families, and even in government.
By the Victorian Responsible Gambling Foundation itself, the costs of gambling in Victoria stacked up to $7 billion in 2017. This comes from health impacts, divorce and relationships, child neglect, asset losses, bankruptcy, crime, and suicide.
In that same year, gambling losses in Victoria alone were $5.5 billion, while the government took in $1.9 billion from gambling revenue.
Per the Victorian Commission for Gambling and Liquor Regulation (VCGLR), there are rules for any organization that wants to apply for a license to operate a community or charitable gaming activity or business.
Organizations wanting to host a raffle, fundraising event, or bingo game must register as a community or charitable organization. They must show, in good faith, that their activities:
- Serve a philanthropic or benevolent purpose
- Act as a sporting or recreational club
- Claim purpose for a political party
For all other types of gambling licensees, specifically club venue operators, the Gambling Regulation Act 2003 requires community benefit statements. They must be audited and submitted to the VCGLR for every financial year in which they receive gaming machine revenue.
Updated Community Purposes
In 2012, Minister for Gaming MP Michael O’Brien issued a Ministerial Order to add more specifications to operators. This separated community purposes into three classes.
Class A related to direct community benefits excluded any activities conducted for profit and gifts or donations of alcohol. But they include:
- Donations, gifts, and sponsorships to other people in Victoria for education, health services, addiction treatment and prevention, housing assistance, poverty, elderly and youth assistance, environmental protection, natural disaster relief, military veteran services, and philanthropic purposes.
- Sporting facilities for use by club members
- Subsidies for goods and services
- Voluntary services by members and staff to the community
Class B pertained to indirect community benefits as follows:
- Capital expenditures
- Financing costs, including principal and interest
- Retained earnings
- Provision of buildings, plant, or equipment valued at over $10K but excluding gaming equipment or areas
- Operating costs
Class C detailed purposes and activities that fell into the miscellaneous column:
- Provisions of responsible gambling measures and activities
- Reimbursement of expenses incurred by volunteers
- Preparation and audit of community benefit statements up to $3K
As these regulations relate to the study by Livingstone and Francis, it seems that most of the revenue goes toward Class B. There is not much for Class A.
There are no regulations specifying the allocation of funds by percentage to any of the classes. Nor, are there minimum requirements for any one class.
Until laws are changed to reflect that a higher percentage of revenue be designed for Class A purposes, venue operators in Victoria and beyond will continue to put the majority of that funding toward business expenses before anything else.