Australia counts social cost of deregulation

Australia pioneered the deregulation of gambling in the 1990s, filling government coffers with billions of pounds in taxes. But the country is now home to more gambling addicts per head than anywhere in the world and the average adult spends £400 a year on betting.

Australia pioneered the deregulation of gambling in the 1990s, filling government coffers with billions of pounds in taxes. But the country is now home to more gambling addicts per head than anywhere in the world and the average adult spends £400 a year on betting.

At the hard edge of this epidemic are the "pokies" ­ glorified fruit machines offering instant jackpots of up to £4,000. They have become an ever-present in pubs and clubs, with Australians spending more on the pokies each year (£32bn) than they do on food.

The occasional punt on the horses or the dogs has been replaced over the past decade by an avalanche of spending thought to top £5bn annually. The spread of casinos and fruit machines has propelled gambling into one of the government's top earners, raking in up to 10 per cent of tax revenue, according to the Australian Tax Research Foundation.

The unchecked growth of the betting industry has created an estimated 330,000 "problem gamblers" ­ those with a habit costing them more than £4,800 a year. It is estimated that gambling addicts now account for at least 2 per cent of the adult population of the country. The loosening of the laws saw casino takings alone shoot up by 41 per cent in the four years after the first reforms in 1994.

The everyday impact of the epidemic has been seen in the courts, where there has been an upsurge in the number of bankruptcies, embezzlement and theft cases, as punters fuel their addiction to taking a flutter. Even the Prime Minister, John Howard, who backed loosening the laws, has publicly questioned the social cost: "There's no doubt that we have an absolute deluge of poker machines in Australia," he said in 2001. "It's one world record of which I am not in the least bit proud."

Charities have echoed his doubts, warning that those who can least afford it are losing the most.