Down or Under: History of Gambling in Australia

The first ever organised gambling event in Australia — a horse race — took place in 1810 at Hyde Park in Sidney. Fast forward to 200 years later, and we have ourselves a country that’s the gambling capital of the world.

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Today, 80% of Aussies participate in some form of gambling, and one in every six players has developed an addiction. To make sense of that number, around 40% of all losses on poker machines comes from people who have a gambling problem.

 

Aussie pokies, as a type of organisation are a relatively new addition to Australian life. Additionally, the first casino ever made was the Wrest Point Hotel Casino, which opened up in 1973 in Hobart, Tasmania. Since then, gambling has developed quite a following.

Gambling Champions

Let’s take a look at some numbers. On average, an Australian spends $1700 per year on gambling. Most of that goes on pokies, as Australia has a greater number of pokies than any other country in the world. Some achievement, especially considering the fact there are around 25 million people living here, making us only the 54th country by population in the world.

 

To put things into perspective, 325 million Americans get to enjoy fewer slot machines than us, and they’re the ones with Las Vegas and Atlantic City. They also spend $400 yearly on gambling, so we really left them in the dirt on that one. And anyone else for that matter — around a quarter of all slots that exist in the world are located over here.

 

On top of that, there aren’t thousands of casinos in Australia — actually, there are 13 at the moment, with around 15 more to open in the next few years. While most gambling activities have been taken over by online gambling sites, it’s not to say Australian casinos are lacking in funds. For example, two of Australia’s top casinos, the Jupiter’s Casino on the Gold Coast and the Crown Casino in Melbourne, attract 11 million visitors each year. That’s more than the Sydney Opera House gets.

 

So what makes gambling in Australia so popular? How did it reach such heights? It’s an interesting topic we’ll cover in this article. But first, let’s try and think about why it is exactly Australia that holds the gambling crown.

Why It Happened

There’s no straight answer to this. There are multiple factors that determine any historical development, and it’s virtually impossible to take them all into account. Nobody can pinpoint to the exact reasons behind the popularity of gambling in Australia. Nevertheless, we’ll give it a shot.

 

Since its colonial beginnings, Australia was fertile ground for gambling. It all began in the late 18th and the early 19th century. Gambling was brought in by British sailors who had a knack for betting, stemming from their Elizabethan English background. Chinese settlers who arrived later on only further added to the development of it. Those early settlements were not a pretty sight. The communities were still in their developing phase, and there was not much around to do. So if everyone’s just sitting around, getting drunk, and playing Blackjack, what are you supposed to do? Join in, of course.

When Money Comes

This gambling foundation grew into an industry when people, especially those blokes with white collars in the government, realised how much money it can make them. And once huge money started rolling in, there was no stopping it really. Australian government earns around $6 billion each year off gambling revenue taxation. The government may as well be so addicted to gambling revenue as the people are to gambling.

 

All of that money comes from the casinos themselves. In the eyes of the law (and common sense), gambling is not a profession. As such, any money you earn playing casino games — the government doesn’t view it as a source of income. So if casinos pay out $6 billion to the government, imagine how much they earn.

 

Additionally, the money invested in marketing is huge. Most of us think of gambling as a national heritage. If you think about it, it doesn’t make much sense — the first pokie machine in Australia came to be in 1953, just 65 years ago. However, pokies flash in front of your eyes and have sensationalistic titles and offers. So no wonder the majority of players are aged 18–24. In fact, most of the players who gamble throughout their lives (and develop an addiction) started playing when they received their first ID.

Early Days

The first lottery company opened up in 1880. The government, seeing how much money this branch can make, decided to join with its own lottery company. Sure, it took them 40 years to catch up, but they got there. After that, off-track betting rose in popularity. It grew so rapidly that it soon took a large chunk of the government’s profit.

 

Furthermore, the first pokie clubs opened in the 1950s in, you’ve guessed it, New South Wales. In the Australian Capital Territory, for example, they legalised pokies 20 years later, but afterwards, it took pokies only four years to leapfrog betting and lottery in popularity charts.

 

You see, pokies were just better than anything else on offer back then. Legal grounds for regulating pokie clubs and pubs with machines in them were not sufficient enough to provide significant restrictions. On top of that, machines were machines — they had better working hours, and you could come in and out as you pleased. You didn’t have to wait for a certain race or a lottery number draw to take place. Also, it was more socially acceptable to hang out in a pub and spin the reels than to go to a bookie’s. They had it all, really — more money, more flexibility, and the grannies spying out of their windows wouldn’t look at you condescendingly.

 

The success of the U.S. gambling industry changed the way we perceived gambling. The general opinion became more accepting and the governments across the world took a more favourable outlook on the whole topic.

 

The same went for Australia. They soon realised there was money to be made. In the 1970s, they legalised off-track betting and made it taxable. Moreover, a referendum took place in 1968, and the outcome of it was that the Australian government started giving out casino licenses.

Legislation

Gambling is regulated on a state level, and every state has its own regulatory body.

  • New South Wales — NSW Office of Liquor, Gaming, and Racing
  • Northern Territory — Licensing Commission
  • South Australia — Independent Gaming Authority
  • Queensland — Office of Liquor and Gaming Regulation
  • Tasmania — Tasmanian Gaming Commission
  • Australian Capital Territory — ACT Gambling and Racing Commission
  • Victoria — Victorian Commission for Gambling and Liquor Regulation
  • Western Australia — Department of Racing, Gaming, and Liquor

 

Nowadays, the most gambling-friendly state is New South Wales. In fact, almost 50% of all Australian pokie machines are in this state. They have restrictions, but they are quite lenient — they restricted the number of pokies at 99 thousand. And they are quite close to that number. Only Nevada beats New South Wales in this aspect. Additionally, in a one-and-a-half-year period in 2017 and 2018, clubs and hotels in New South Wales netted $3 billion. If we look back, we’ll see that in the 1980s, pokies alone represented 40% of all NSW revenue.

 

As states regulate gambling on their own, tax rates vary. The lowest rate of 19% is in the Northern Territory, while Victoria is the toughest on their casinos, with a tax rate of 41%. If you compare these numbers historically, you’ll notice there’s an overall decline in tax rates. Victoria, for example, had a tax rate of 61% on gambling at the beginning of the 1980s. Effectively, they’ve cut their taxes by a third.

Interactive Gambling Act

With the inevitable evolution of online gaming machines, the Australian Commonwealth Parliament decided to step in and pass a bill on a nationwide level. In 2001, they introduced the Interactive Gambling Act — IGA for short. The IGA is still a matter of debate, as many argue it brought more harm than good.

 

The IGA forbids all online casinos based in Australia to offer — or promote in any way — real money gambling services, effectively banning Australians from their online casinos. Nonetheless, by 2010, 9 years after the bill was passed, Aussies had spent $800 million playing online. So what’s the catch?

 

Well, the thing is, players themselves suffer no penalties from the IGA. Or suffered, to be more exact. You were free to play online. On top of that, online casinos could operate in Australia, they just couldn’t offer their services to their compatriots. However, Australian online casinos were able to work with customers from the rest of the world, except for those coming from a list of restricted, “designated countries.”

 

On the other hand, we as players were able to play in foreign casinos. They could accommodate Australian players without any repercussions. However, this has changed for the worse. The law became even stricter, as the government couldn’t find a way to keep track of online transactions. So as of March 2017, online casinos were completely banned in Australia, meaning they couldn’t operate at all anymore. However, the players are still allowed to gamble at foreign casinos if those casino are willing to take them in. Although, that makes us more susceptible to money laundering schemes and other types of fraud.

Online Gambling

In the second part of the 1990s, the Internet became an integral part of all of our lives. Every walk of life was affected, and gambling was no different. From about 20 brick-and-mortar casinos, suddenly, all of us could have a full set of casino games in our pocket. There’s really no need to elaborate on how much commodity the Internet brought to our lives. Being able to play from the comfort of your own home aside, online casinos offer a better variety of games. Nowadays, you can visit one website and have access to over 2000 games of all types — table games, video poker, lotteries, and of course, pokies.

 

In 1994, Microgaming entered the scene as a provider of gambling software. Their first Australian-styled pokie was Thunderstruck, released in 2004, which signalled a start of the expansion of online gambling in Australia. Since then, more and more Aussies opt for gambling online, competing in tournaments, and playing specialty games like Keno from their laptops.

Brief History of Online Poker

The first website to offer online poker was Planet Poker, founded in 1998. Even though they attracted a considerable number of players, you could see that this technology was still in its infancy. Dial-up connections caused problems with reliability, and the casino had trouble with payment.

 

Soon after, Paradise Poker and Poker Spot succeeded Planet Poker. They offered more stability and more game types, with players being able to enjoy Texas Hold ‘Em, Omaha, Seven Stud Poker, among other poker variants. Moreover, Poker Spot was the first one to organise an online poker tournament.

 

Afterwards, Party Poker and PokerStars joined the fun and eventually became two of the most prominent online poker casinos. They started organising tournaments which would act as a qualification phase of live casino events. They even televised these casino tournaments, which resulted in a rise in the popularity of online poker. Consequently, more and more players flocked to play online poker and participate in online tournaments. It all took off from there. 

What Lies Ahead

As we’ve already mentioned, it was in 1973 that the first ever Australian casino popped up in Tasmania. The hotel-turned-casino operates to this day, and 12 other casinos accompany it now. Sydneysiders can expect to get their second casino in 2021 — Crown Sydney. It’ll have 73 floors and will reach 271 metres, making it the tallest building in the city. They keep pushing the boundaries of how much the gambling industry can achieve.

 

But what of the players? What about us? As we’ve said, 80% of Aussies gamble. When it comes to our younger generations, the numbers are even more damning. A survey in the Central Coast revealed that 96% of people aged 18–24 lost money or possessions on gambling. Two-thirds of kids under 14 years old bet money or items, such as their mobile phones. And a quarter of them says they’ve lost more money than they had initially planned.

 

Around 600,000 Australians admit playing pokies at least once a week, while 15% of them admit they have a gambling problem. Around 400,000 Aussies have at least some difficulties resisting the gambling appeal.

 

So where does this leave us? The whole country seems to be gambling non-stop, and we’ve been doing it consistently for almost 250 years. With each new generation, children enter the gambling world at a younger age.

 

While most of us still regard pokies as a pastime activity, it’s time we take greater measures towards preventing addiction and financial problems that stem from gambling. Be that as it may, pokies don’t seem like they’ll be going away any time soon.

 

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