As the 2023 NSW election draws nearer, one of the key issues that the two major political parties, the NSW Liberal & Nationals Government and NSW Labor, have been focusing on is the regulation of pokies. In particular, much debate has been had surrounding the potential introduction of cash-free pokies across the state.
Cash-free pokies, where players use a prepaid card or digital wallet instead of cash, has been touted as a potential solution to curb gambling addiction and reduce money laundering in the state. While both parties have acknowledged the benefits of cash-free pokies, their policies differ in several key ways.
NSW Liberal Policy on Cash-Free Pokies
Based on the 26 October 2022 review of the NSW Crime Commission report into money laundering, the NSW Liberal Party has proposed a voluntary cash-free system, which will be rolled out in early 2024 allowing players to choose whether they use cash or a digital payment method. This policy aims to reduce the harm caused by gambling while also allowing players to continue using cash if preferred. The use of cash will be phased out with various support packages introduced for venues, especially in rural areas, to ensure that gaming in NSW is cashless before 31 December 2028. .
The Liberal Party's policy also includes a mandatory daily limit on the amount that can be loaded into the machines. The amount is yet to be specified but is touted to be between $1,000 to $1,500. This policy is designed to prevent players from spending beyond their means and becoming addicted to gambling.
NSW Labor Policy on Cash-Free Pokies
The NSW Labor Party, on the other hand, has proposed a mandatory 12-month trial from 1 July 2023 on a cash-free system for 500 poker machines across the state in both metro and regional areas. Under their policy, supported by Unions NSW, Players would be required to use prepaid cards or digital wallets to play pokies, with no option to use cash. Chris Minns advised “this evidenced based approach will ensure that harm minimisation measures wouldn’t have any unintended consequences.”.
Labor's policy also includes a reduction of cash input limits per machine to $500 from 1 July 2023 (only on new machines), down from the current $5,000 limit. This policy aims to reduce the potential harm caused by gambling and prevent players from spending beyond their means.
Labour is also proposing increasing the forfeiture rate to one machine forfeited for every two sold. The current rate is one machine forfeited for each three sold. This policy aims to further reduce the 95,800 gaming machines available in NSW, compared to 187,652 available nationally.
Comparison of the Policies
While both parties have acknowledged the potential benefits of cash-free pokies, their policies differ in several ways. The Liberal Party's voluntary system allows players to continue using cash, albeit temporarily, while the Labor Party's mandatory system removes the option entirely.
Labor's $500 limit on prepaid card loads is much lower than the Liberal's $1,000 to $1,500 limit, potentially limiting the revenue generated by pokies in the state. This measure also may damage the gaming tax income that feeds into State Government coffers.
Both parties' policies aim to reduce the potential harm caused by gambling, but the Labor Party's mandatory system is arguably more effective in achieving this goal. However, the Liberal Party's voluntary system may be more politically palatable, as it allows players to continue using cash up to 2028.
Conclusion
Overall, the NSW Liberal and NSW Labor policies on cash-free pokies for the 2023 election differ in the details. While both parties acknowledge the benefits of cash-free pokies, their policies vary in terms of whether the system should be voluntary or mandatory and the limits on prepaid card loads and withdrawals. Caution should also be afforded to the increased “spending effect” that has generally shown a 20% increase in cashless spending with ‘tap and go’ and TITO systems. Without people connecting spending with cash in hand, a cashless gaming environment could potentially increase the problem.
Ultimately, the policy that is adopted will depend on a range of factors, including community feedback and the political climate at the time. However, it is clear that both parties are committed to reducing the harm caused by gambling and that cash-free pokies are a potential solution to this ongoing problem.
If you have any questions regarding the above, contact Business Services & Taxation Director Colin Samuel at csamuel@prosperity.com.au. Alternatively, you may contact your Principal Adviser to discuss.