The bearable lightness of lost revenue: Negligible tax losses from poker machine reform

With the Tasmanian Joint Select Committee on Future Gaming Markets considering the future of poker machines in Tasmania, community pressure is growing for poker machines to be banned from hotels and clubs, limiting them to casinos and the Spirit of Tasmania vessels. Concern that this proposal would reduce government revenue is misplaced.

Recent modelling by Professor John Mangan on behalf of Anglicare shows that banning poker machines from hotels and clubs would be a “non-complex means of reducing social costs of gambling while still providing gambling options in the State”. All three scenarios modelled by Mangan found an increase in Gross State Product (by between $21 million and $61 million per year), wages, profits and dividends (by between $11 million and $45 million) and employment (by between 183 and 670 full-time equivalent jobs). As Mangan concludes:

The Tasmanian Government is not dependent on taxation from poker machines.

This paper supplements Mangan’s research by calculating the loss of poker machine tax revenue that would ensue from a ban on hotel and club poker machines. This loss would be very small and could be accounted for by adopting higher tax rates for casino poker machines.