TAB (DISPOSAL) BILL 2019 BETTING CONTROL AMENDMENT (TAXING) BILL 2019

Second Reading — Cognate Debate

Resumed from an earlier stage of the sitting.

Comments and speeches from various members

HON ALISON XAMON (North Metropolitan) [8.09 pm]: I rise as the lead speaker on behalf of the Greens to speak on the TAB (Disposal) Bill 2019 and the Betting Control Amendment (Taxing) Bill 2019. These have been really interesting bills for me to get my head around from the beginning, because there has been a whole range of competing thoughts around how this issue should be treated. To start with, the Greens went to the last election with a very clear position of not wanting to sell off any public assets, but as has already been articulated by other speakers in this place, a really important question to be asked is whether it is even the place of government to be engaged in gambling. I suggest “probably not” would be my response. It has also been put to me, through the course of my research into this, that gambling is an area that needs to be highly regulated. The suggestion was put to me that the best way that we can ensure that an industry is regulated is by ensuring that it stays in government hands. I am not sure that I agree with that assessment either; in fact, I think that if a government is the recipient of revenue from the very entity that it intends to regulate, it can sometimes create an inherent conflict of interest. That has not been a particularly persuasive argument for me either. It has been through looking at the implications of the various threads of these bills that I am now coming to this place with some particular concerns.

Although I have heard previous speakers clearly and passionately support the racing industry and talk about what would be the best outcome for the racing industry, it is only fair and honest for me to be really clear from the outset and say that that is not the starting point for the Greens—that is just the truth—and that I therefore come here with a range of other concerns that I wish to put on the table. That is the nature of this place. It is made up of seven different parties and one independent, and that means that we represent a variety of views within this place.

We know the reasons that the TAB became owned by government in the first place, and previous speakers have talked about the history of how that came about. To be honest, the government was trying to address some quite serious problems within the gambling sector at the time, particularly with some of the bookies. We know a little about where we came from and why the TAB ended up in public hands, but I think we can all agree that we have moved on from that point. The question of whether we need to privatise the TAB and on what terms has been around since at least 2010; therefore, I note that the bill follows long consideration of this issue by both the previous and present governments. One of the challenges has been that the TAB is not a separate saleable entity, and decisions were needed about exactly how operations were to be separated and sold. For example, racing infrastructure, contracts regarding wagering operations, the licence to operate a betting agency, and access to various racing products needed to be worked out. Another challenge has been that, because much of the income to date from the TAB’s wagering operations from its racing products are returned to the racing industry via Racing and Wagering Western Australia and is used especially for the prize money that drives that industry, decisions were needed about how to maintain secure funding for the industry and racing infrastructure into the future in the event that the TAB was finally sold off. I note that the second reading speech states that about 25 000 people participate in the racing industry and more than 7 000 full-time equivalents are involved.

I want to refer a little to the 2014 Gunston report, which was referred to by some previous speakers. The full title of that report is “Report to Western Australian Racing Representative Group on the Potential Privatisation of the Western Australian TAB”. That 2014 report was commissioned by the Western Australian Racing Representative Group. The role of that group was to represent the racing industry’s interests as the then Barnett government was considering privatising the TAB. I note that the aim of that group was to ensure that if the TAB was sold, the racing industry was not going to be any worse off in either its future funding or in terms of any future risks that it might face. I will speak to some of the points that the report made. The Gunston report said that privatisation of the WA TAB was likely to have to occur within the next few years. It identified that the TAB’s low-growth outlook, combined with relatively high fixed costs, meant that scale was the only way to sustain the TAB business, therefore ensuring reliable funding to the racing industry. Interstate TABs had been consolidated into Tabcorp and Tatts in order to achieve that scale. The reasons for the low-growth outlook included competition from the international and interstate corporate operators—we have spoken about some of them already—Tatts, Tabcorp, Sportsbet, CrownBet, and Ladbrokes, as well as the significant growth in online and sports betting rather than the TAB offerings, and also a limited ability to invest in marketing and technology. That report also noted that the funds were being generated only for racing operations, which meant that there was little to no capacity to pay for racing infrastructure or ongoing maintenance. To address that shortfall, funds had been provided from the racecourse infrastructure grants program as well as royalties for regions. Other sources of funding included the regional development commissions, various local governments, the federal government, racing clubs themselves and sponsorship. But the report noted that this was becoming increasingly difficult, and it was clear that a mechanism for funding ongoing infrastructure needs was necessary as well as finding a better use for existing assets.

The Gunston report considered what privatisation of the TAB might look like and what matters needed to be resolved. It was pointed out that the new operator would need to have a new wagering licence with a term that would be long enough to recoup their investment, but perhaps with interim reviews of the licence and the funding model. That is the time frame that we have been talking about in this place. As it is now, exclusive rights would need to be given for retail, tote and fixed-odds wagering, and the report noted that the TAB’s value would be enhanced, compared with that of other jurisdictions—this is important—because in Western Australia there is no competition from keno or electric gaming machines outside the casino. The report found that some jurisdictions had expanded their TAB’s retail products to include simulated racing or keno, but that, to date, RWWA had not succeeded in getting WA government approval for this. It said this was something it had been pursuing for some time. The report noted that this option should be reconsidered as it would enhance racing industry funding and get the government an increased TAB sale price and gambling tax proceeds.

The report also referred to a potential additional income stream. That would be “racinos” and would include electronic gaming machines licensed at certain racecourses. The report contemplated a range of electronic gambling options as part of a potential sale of the TAB.

The report also referred to what the legislative framework might look like. It went through options for various models. It referred to the racing program that is still to be determined by Racing and Wagering Western Australia. It is proposed to be renamed Racing Western Australia. It also referred to the wagering tax, race field fees and a range of other financial matters such as GST reimbursement. It also referred to pooling arrangements with TAB retail outlets. The report noted that any new wagering operator would want flexibility in regard to location. Existing outlets will also want certainty about their arrangements. Other jurisdictions had resolved this by locking in existing arrangements for three to five years. The report referred to oncourse wagering arrangements, RWWA staff associated with wagering operations, and issues of asset infrastructure. This comprehensive report went through a number of things. I suppose the significant point for this debate is that it also flagged a lot of the contentious areas we are now discussing this evening.

I will talk a little about the consultation that occurred back in 2018. As I have already said, the Barnett government supported in principle the sale of the TAB, but the sale did not occur during that term of government. At that time, the then opposition indicated that it opposed the sale of the TAB. I understand that the Labor Party is now saying that is because the racing industry opposed it, mainly because the former government was unclear about how the racing industry would be impacted by the sale. I am not making an assessment about that; I am saying that is what the argument has been.

Following the Labor Party’s election to government in 2017, it was open to sell the TAB as long as the racing industry was in support of that. The McGowan government picked up the issue of consultation and carried that out with the racing industry during 2018. Stage 1 of the consultation process was discussions with the RWWA board and its subcommittees for each of the three racing codes—thoroughbred, harness and greyhound. Stage 2 of the consultation process was a public discussion paper and the submissions in response. One hundred and seven submissions were received at the time. The stakeholder groups that made submissions were the RWWA board, the Thoroughbred Racing Committee, the Harness Racing Committee, the Greyhound Racing Committee, the WA Racing Representative Group, Perth Racing, the WA Greyhound Racing Association, Gloucester Park Harness Racing, Pinjarra Harness Racing Club, the WA Standardbred Breeders Association, the WA TAB Agents’ Association, Tabcorp, Sportsbet, the Australian Hotels Association, the Chamber of Commerce and Industry of Western Australia, the Community and Public Sector Union–Civil Service Association of WA and UnionsWA. There were also a number of individual submissions, but they were primarily TAB agents. Eight consultation forums were held in July 2018. There was one for TAB agents, one each for the three racing codes, and four open forums. The open forums were held at Bunbury Trotting Club, Albany Racing Club, Geraldton Turf Club and Kalgoorlie–Boulder Racing Club. Following consultation, the government decided to go ahead with the sale of the TAB.

The reason I specifically wanted to raise consultation is that in questions I submitted to the government trying to get more background about this bill, one question I particularly wanted an answer to was which organisations were consulted. We have heard quite extensively from groups that are particularly concerned about the Trackside elements of the bill. The simple answer was that there was no specific or targeted consultation with those particular groups. I asked what feedback did the Western Australian Council of Social Service provide to the government. The response I received was that WACOSS did not provide a submission during the public consultation phase conducted by the Department of Treasury; however, the Treasurer’s office has discussed the matter with the WACOSS CEO. I can guess the response from the WACOSS CEO. I suspect it has been entirely unfavourable because we have now heard that some quite serious concerns have been raised by WACOSS, as well as by a whole range of other entities.

I also asked whether the government had met with the Financial Counsellors’ Association of Western Australia; and, if yes, what was its feedback. The answer was no; however, all interested parties were encouraged to submit their views on the sale of the TAB during the consultation phase, including the introduction of simulated races. No submission was received from the FCA. I asked whether the government had met with Anglicare WA; and, if so, what was its feedback. The answer was again no; however, all interested parties were encouraged to submit their views on the sale of the TAB. After speaking to these organisations, I am aware that one of the reasons they did not put in submissions is they felt completely blindsided by this. They were not aware that this was proposed, so it was not on their radar that this was an issue they needed to be aware of.

I really want to make a point about consultation. There was clearly extensive consultation, which I acknowledge is the right thing to do, with a range of stakeholder groups that actually work in racing itself. Submissions were also received from union groups that represent workers. There was clearly consultation with people in racing, but there was no targeted consultation with any of those organisations that are left to pick up the pieces around problem gambling. The bill before us today contemplates a range of amendments that the Greens, at the very least, have an enormous concern with. I have also heard concerns raised by other members in this place. That was never subject to the sort of consultation that should have occurred. I think there was a deficit in that process.

I will talk a little now about the value of the TAB. The debate on the bill in the other place indicated that the sale of the TAB, pursuant to the bill’s provisions, is expected to raise about $300 million. Who knows? I note that figure is considerably less than the $1 billion or more that was estimated to be raised had it been sold in 2016, but I also heard figures of $150 million being bandied about. Today, I note that there was a suggestion that it might be $500 million. It is fair to say that we really do not know how much we are looking at for an overall sale. What was picked up in the Treasurer’s second reading speech in the other place was that the TAB’s situation is certainly worsening and selling it now is really the only option rather than maintaining the status quo—that is, if we want to maximise the amount it can be sold for. There is no question that the government simply holding on to it at the moment means that the asset will continue to diminish in value. I understand that is why there is a big desire to get moving on that.

The bill in front of us does a number of things. Obviously, it creates the mechanism for the sale. The mechanism to be used is similar to what was used in the Perth Market (Disposal) Act 2015 and the Pilbara Port Assets (Disposal) Act 2016, with modifications as necessary. I note that state tax will not be payable on the sale of the TAB. As has been well canvassed, the net proceeds of the sale will be split. Thirty-five per cent, which possibly will be around $100 million—but who knows?—is intended to go to the racing industry in the form of a special purpose fund, the racing infrastructure fund. That will be administered by RWWA, with an investment strategy and funding allocations to be approved by the minister. It is made clear in the legislation that Racing and Wagering Western Australia will be able to use the capital and the interest, or both, for providing and improving Western Australian racing infrastructure. It also provides that RWWA will have to consider investment strategies and planned allocations when preparing its strategic development plan, and it is going to have to include planned allocations in its statement of corporate intent.

During debate in the other place—I understand that this is likely to be reconsidered here—it was proposed that the racing industry get 100 per cent of the net proceeds. That may still be subject to debate here. I indicate from the outset that the Greens will not support an increase in the percentage that is made available to the racing industry. I listened carefully to the considered contributions by previous speakers. One of the arguments in support of increasing the percentage made available to the racing industry is that the racing industry is responsible for building the current asset. With respect, that asset has been propped up by government moneys for quite some time; royalties for regions funding, for example, is government money, so I do not actually agree that that asset belongs entirely to the racing industry. I do agree with the proposition that if we are to sell this asset, the broader Australian community should, at the very least, also benefit from it.

It has been proposed that 65 per cent—which is expected to be around $200 million, but again, who knows—will go to government, and the government has announced that that money would go towards a down payment on building the new maternity hospital that will replace King Edward Memorial Hospital for Women. It has been pointed out that the hospital will have to be built anyway, and it does need to be built, but we are talking about a piece of ageing infrastructure that desperately needs replacing. One thing we do know is that we need to have a good hospital for where babies are born and that King Edward has been hopelessly outdated for a very long time.

I turn to the nature of the licence. Whoever the purchaser is, the new wagering operator will have to apply for a licence. They will have an exclusive licence for tote and fixed-odds betting, as the TAB currently has, but they will also be able to bet on simulated races, which are also included in that licence. Currently in Western Australia, only Crown Casino offers betting on simulated races. If this bill is passed in its current form, both the casino and the wagering licensee, via the TABs, will be able to offer betting on simulated races. We know that there are differences of opinion about what that actually means in relation to simulated races. The argument that has been made about why simulated races will be absolutely fine is that people will have to be physically present at a TAB to use the terminals, and it is argued that that at least is better than being on a phone or online. It has also been said that it is intended that under the licence—who knows whether it will be changed, and the licence is not in the bill, so that is not something we will determine here—hours for betting on simulated races will not exceed the retail TAB outlets’ standard trading hours. For TABs at licensed premises, the permitted hours are whatever those premises’ hours may be under the liquor laws. For other TABs, it is 14 hours out of 24. But, members, even then we are talking about a huge number of hours. It may not be 24 hours a day, like the casino, but this will be happening in our suburbs and in our regional areas, so we are talking about a huge span of hours within which people will be able to access simulated races in a way that they cannot at the moment.

It has also been argued that it is intended that the game be provided predominantly only between live races and broadcasts on TV screens. But again, it is not up to this house to determine that, so we are simply being told, right now in August 2019, what is being proposed with regard to how it is intended to operate. This could change at any point; it is by no means certain that this is what will occur in practice. I will come back to the issue of simulated racing in a moment.

The bill also looks at the circumstances in which a licence will be granted. Part of that is looking at whether the applicant has met the licence condition of having in place a Gaming and Wagering Commission–approved consumer protection policy for responsible gambling, harm minimisation and consumer protection. I asked the government what the content of the approved consumer protection policy would be. This, again, is in the context of the introduction of Trackside. I was told that it would be a condition of the wagering licence that the wagering licensee complies with the principles of the “National Consumer Protection Framework for Online Wagering in Australia—National Policy Statement”, and that that framework is publicly accessible. The “National Consumer Protection Framework for Online Wagering in Australia—National Policy Statement” was part of the Council of Australian Governments response to the 2015 “Review of Illegal Offshore Wagering”, otherwise known as the O’Farrell review. The framework developed by commonwealth, state and territory governments aims to reduce the harm of online wagering by providing a range of nationally consistent protections and that is intended to apply to interactive wagering service providers, regardless of the Australian jurisdiction within which they are licensed or provide their services. It is also to afford consumers of licensed interactive wagering services effective safeguards, regardless of the Australian jurisdiction within which those services are consumed. I would like to table a copy of the “National Consumer Protection Framework for Online Wagering in Australia—National Policy Statement”, because I am about to make reference to it. I seek leave to table this document.

Leave granted. [See paper 2923 - National Consumer Protection Framework for Online Wagering in Australia — National Policy Statement (November2018).]

Hon ALISON XAMON: Bearing in mind that this document will potentially be used as part of the protections provided, one of the reasons I wanted to table it is that I was interested in looking at the exclusions at pages 21 and 22. I would like to get advice on this, because it appears to me that betting on simulated races at a TAB is excluded from this framework because it is listed in the table at page 21 as “Device at a venue (e.g. betting terminal)”. If I have this wrong, I ask the minister to please correct me. I have been assured that, at the very least, this is the framework that will apply, yet upon closer examination, I am concerned about whether it may not apply. I would like to be assured on that, please.

The bill also enables the wagering operator or the licensee to establish betting agencies as and where they wish to, subject to, if at a racecourse, prior approval from the body controlling the racecourse; and, if at a licensed premises, subject to prior approval under liquor laws. According to the Treasurer, currently less than five per cent of licensed premises and 13.7 per cent of pubs and clubs have a TAB. Existing TAB agencies are taken to be betting agencies under the act.

There will be a review in three years—in other words, after two full years of performance data is available. The report of the review is to be tabled in Parliament, so that is welcomed. I note that the review must address the impact on the racing industry, including its funding, as well as the structure and functions of Racing and Wagering Western Australia and administration of the racing infrastructure fund. That makes perfect sense, because we are trying to see whether that will have the effect that we hope it will. I also note the amendment that was moved in the other place by a member of the opposition and supported by the government to ensure that the review also addresses the impact of simulated racing on problem gambling. I am pleased about that, but I am concerned that it is simply trying to gather evidence of the damage after it has occurred.

In terms of what is in it for everybody, the racing industry will get the continuation of RWWA’s usual role, including representation of the industry and the distribution of funds to the three codes. RWWA will retain in its account its pre-existing cash reserves, which are estimated to be about $80 million. As I have said, it will get 35 per cent of the net sale proceeds, and any interest that is earned will go to a fund for racing infrastructure. I note that this is to ensure that racetracks will be of a sufficient quality and condition to supply racing products as agreed under the racing industry agreement and that capital or revenue, or both, from the fund can be used, and I will have a little more to say about that in a moment. There will be a racing industry agreement with the new wagering operator for funding and other services as agreed and, as noted, no licence can be granted to the wagering operator without this agreement being in place. The agreement is intended to include a funding guarantee period and, beyond the initial guarantee period, RWWA will continue to receive a percentage of the operator’s gross wagering margin for the term of the licence. Of course, that means that the funding will vary depending on the TAB’s performance. Mechanisms will prevent the new wagering operator from transferring customers and revenue out of WA and there will be an obligation for the licensee to act in the TAB’s best interests. The agreement’s term is intended to match that of the licence, which, as has been noted, can be up to 40 years, but may be more like 25 or 30 years. I understand that this is considered to be sufficient to align the interests of the new racing industry. The racing industry will also get any unclaimed dividends or winnings or refunds and a race field fee. The maximum penalty if the licensee uses the WA race field without RWWA’s approval is a $5 000 fine. I note that there may be approval conditions, including as to fee, and that RWWA’s decision is reviewable by the State Administrative Tribunal. I asked the government what matters SAT will take into account if it is asked to review RWWA’s decision and I was told that it will be up to SAT to determine. That is all I was told. I find it surprising that this will be left entirely to SAT’s discretion without any guidance whatsoever. I ask the minister to clarify that answer further, please. Race field fees will be collected by RWWA and distributed to the three racing codes. There will also be continued receipt and distribution to the three codes by RWWA of 30 per cent of the revenue that is raised by the point-of-consumption tax.

During the debate in the other place, the Treasurer tabled a letter from RWWA’s CEO that states that RWWA and the racing committees support the legislation as drafted and that the funding elements are consistent with the principles agreed between the government, RWWA and the racing committees before drafting, but this is not a unanimous view, because I note the report that five of six members of the thoroughbred racing committee have quit, saying that RWWA was not engaging genuinely with them. I know that all is not entirely harmonious.

Let us talk a little about what country racing will get. I note that concerns have been raised in the other place and in this place that the voice of country racing will not be heard on expenditure on infrastructure, particularly at racecourses, and therefore the bill needs to provide for country representatives on the RWWA board. This bill does not make any changes to the make-up of the RWWA board or functions regarding country racing. If there are any concerns about that, I suspect they will just continue. RWWA’s ongoing ability to fix race dates throughout WA is also a protection to ensure that country racing can continue.

The TAB agents—there are about 320 retail TAB outlets—will get protection. That is one of the things they said that they wanted. They supported the sale, but wanted some protection. I note that TAB agencies will continue to be the sole provider of retail betting. As noted, TAB agents will get the ability to offer simulated racing via the licence to the wagering operator, and the value of this is not going to be known because the figures that are available are from interstate, where simulated racing competes with other gambling products such as keno and the pokies. Simulated racing contributes about three to four per cent of wagering turnover there. The government has said that it does not expect simulated races to be a significant contributor to the overall revenue base.

In terms of RWWA staff, the submission by the Community and Public Sector Union–Civil Service Association of WA on the discussion paper says that there are up to 500 RWWA staff jobs, some of which relate to TAB functions, and they were seeking an employment transfer plan to ensure that those jobs remained secure. It is likely that some people will be made redundant, although I note that they signed a new staff agreement in April this year, so I imagine that a number of them will get payouts.

It is interesting to see what our poor struggling casino will get out of this! It gets the assurance that simulated racing will not be offered by TABs for shorter times or more frequently than is offered at the casino, where simulated racing will continue to be available. I note also that the casino will not get a reduced licence fee. Good! It has plenty of money and can afford it. I am not particularly worried about that. However, I note that if the incoming wagering operator elects to offer simulated races, it will have to pay Crown Perth $1.2 million. I want to make an additional point here. We asked the government for a complete, current, consolidated copy of the casino state agreement, because the bill includes the fifteenth supplementary agreement to it. As expected, we did not get that consolidated version. We got a link to the Western Australian Legislation website instead. As we discovered previously when seeking the Alcoa state agreements, that website provides a consolidated version of the act but not of the schedules to it, which contain the state agreement. They are simply tacked onto the end of the act in the order that they were made. This is an ongoing concern. People might wonder why the Greens have consistently had concerns about the nature of state agreements. Members, I am not alone on this. Transparency International is also concerned about this, and this is one of the reasons why. It is very difficult to get a comprehensive history of state agreements. I remind members that these should be readily available within Parliament, but they are not. Unfortunately, by not making this available, it is virtually impossible to track the changes that have been made. I once again flag that I would like to get a complete, current, consolidated copy of the casino state agreement. It is not commercial-in-confidence, so there is no reason it should not be able to be supplied. I make that very clear.

Let us talk about what the government and taxpayers will get. As we have said, the state will get 65 per cent of the net sale proceeds, which will be used as a down payment for the upgraded maternity hospital. We will get a wagering licence fee and continued receipt of the share of revenue from the point-of-consumption tax. I was provided by the government with a figure of $371 million from the tax’s introduction to the end of the 2022–23 financial year, but I suspect that this is a total figure, not the share that the government and taxpayers will get. I ask the minister to please clarify the amount of the government and taxpayers’ share. I understand it is an increase on the figure provided to Parliament when the tax was first introduced due to better quality wagering industry data being provided or being used in the subsequent forecasts, but I would like to get that clear amount, please.

I now get to the two key issues that the Greens have about this bill. The first is: what will the racing animals get? The answer is that the racing animals will get absolutely nothing. There are no new funds or conditions to monitor or improve animal welfare. There is not even a requirement that any spending on racetracks from the infrastructure fund needs to consider animal welfare. The Greens are very, very disappointed that of all the money, the millions that this measure is expected to bring in, not a single cent is being set aside to increase current expenditure on improving the welfare of animals used by the racing industry or on addressing problem gambling. I assure members that there are plenty of problems that need to be addressed. We know that horses can suffer in the racing industry in a variety of ways. They suffer from long-term stabling, from whipping and from overexertion, which can cause injuries such as exercise-induced pulmonary haemorrhage and exercise-induced injuries, especially to their feet. When horses are raced when they are too young or unfit due to injury, they get fractures. They are then euthanased for human or pet meat because of injury or because the industry has no further use for them. Horses frequently die on our racetracks, even in the most high profile races such as the Melbourne Cup. Equine vets are frequently concerned about the number of horses getting injured when they are racing and also when they are raced while unfit or too young. Those concerns do not seem to get heeded.

Greyhounds are suffering for the racing industry in a variety of ways. They experience kennel conditions that are physically harsh and they lack behavioural enrichment or socialisation. They suffer terrible racing injuries. According to Racing and Wagering Western Australia’s most recent annual report, between 1 August 2017 and 31 July 2018—so only within a 12-month period—there were 335 incidents of dogs suffering grade 1 muscle injuries or minor skin lacerations during a race, which incapacitated them for one to 10 days. There were 214 incidents of dogs suffering sprains, skin lacerations or grade 2 muscle injuries during a race, which incapacitated them for 11 to 21 days. There were 113 incidents of dogs suffering grade 3 muscle injuries or fractures during a race, which incapacitated them for more than 21 days. There were 45 incidents of dogs suffering severe skull or spinal trauma or complex fractures during a race, which either killed them outright or required them to be immediately euthanased, yet only 1 144 greyhounds raced in that 2017–18 season. That is an extraordinary number of injuries. We also know that greyhounds suffer from doping. In February 2015, a WA trainer was suspended after pleading guilty to doping dogs with anabolic steroids. Greyhounds also suffer premature death or are euthanased. This can be because of racing-related injury. They can also be euthanased because they are, unfortunately, considered to be unsuitable for rehoming. In fact, 43 dogs were killed for that reason between 1 August 2017 and 31 July 2018, and 53 the year before, according to the last RWWA annual report. Greyhounds as Pets also euthanased five per cent of its adoptive dogs because they were either too unwell or considered unadoptable. The third reason that greyhounds get euthanased is that the industry has no further use for them and they are considered to be a waste. RWWA’s last annual report says that no dogs were euthanased for this reason between 1 August 2017 and 31 July 2018, but seven were the year before. I stand here to be unequivocal about this. I mentioned from the outset that I am not necessarily the greatest fan of the racing industry; I never pretended to be. When it comes to greyhounds, I think greyhound racing should be banned. I would be quite happy to see greyhound racing not continued in Western Australia at all. One of the questions I have for the minister, which has been put to me to ask the minister, is whether by locking in the sale of the TAB there will be a requirement for greyhound racing to continue for the duration of the entire contract, which could be 40 plus two years—that is potentially proposed—or whether there could still be the option, should the attitudes towards greyhound racing shift, for it to be banned within that time frame without the need to compensate the purchaser of the TAB. Could I please have confirmation whether that is the case or whether, by signing this contract, we are also locking in a particular code of racing that a number of people in Western Australia—certainly me and the Greens—would like to see end in its entirety?

I also want to talk about what extra funding, should it be part of that 35 per cent, could do to improve animal welfare in the racing history. I am not suggesting that nothing is being done about these issues, because it is, and the latest RWWA report explains that, but there is no way that anyone could argue that work in this area is complete. Much remains to be done. An injection of part of either or both the extra $27 million or $30 million that is going to go to the three racing codes and the extra $94 million that is going to go into consolidated revenue could give a much-needed boost for strategies to improve animal welfare in the racing industry. We know there is a great need for full life-cycle tracking of racing animals and for better data collection around breeding, injury and mortality. We need to know exactly what is happening so we can act on it. Some work is happening in this space, but we do not yet have full life-cycle tracking for racing animals. Further, since the public purse funds racing, I think that data needs to be publicly accessible. There is also a need for increased investment in making sure that injured animals are getting proper veterinary treatment, and there is a need for investment to improve the day-to-day stabling and kennel conditions for racing animals. This needs to be ongoing and consistent, not just when they are training or competing. All of these things are needed to improve animal welfare in the various codes of the racing industry. We need to make sure that animal welfare policies and codes of practice are reviewed and being kept up to date with current scientific knowledge and community expectations, and we need to ensure that compliance monitoring is independent. Last but not least, I think there is a need for investment in independent research into improving the welfare of racing animals and implementing its recommendations. For example, there is research currently being done by the University of Technology Sydney into greyhound track design. As we have seen in WA in the past, the hardness and the softness of the track surface can affect the risk of fractures and muscle injury and also the risk of sand or grit being kicked into the faces of any dogs behind, which can cause some very bad eye injuries. Much could be done to improve the welfare of animals in the racing industry using the bit of the bonus that these bills deliver to the racing industry and state coffers.

Of course, the second big area I am going to speak on, which members have already alluded to, is what problem gamblers will get under this bill, and the answer is nothing. They will not get anything that is going to help them if they have a problem with gambling. We know that the consumer protection policy, which is approved by the Gaming and Wagering Commission, is a condition of the wagering licence, and any breach is subject to disciplinary proceedings; however, as I indicated earlier, I am concerned that it does not appear to apply to simulated racing at TAB outlets, so I do want to know. We know that funding will continue to be provided by the wagering operator to problem-gambling services, but only in the same way that it is now, so there will be nothing additional. Problem gamblers may be worse off as a result of the introduction of simulated racing. That concern has been voiced vociferously by people who work in this area—people who work with people who have problems around gambling. We should be listening to them. We do not know how much of an impact it is going to have. No-one knows how much revenue will come from this source in an environment in which the product is not competing with pokies or keno. We do not have a clear comparison, such as they have in the other states.

I know that in the other place, one opposition member took the approach that if simulated racing is good for revenue, it is probably bad for problem gambling, and that if it is insignificant for revenue, then it need not be included as a sweetener for the TAB sale. I note the response from the Treasurer was that those views are extreme, which I think is not paying attention to exactly what is being said. If simulated races are introduced to the TAB outlets, Parliament will not learn how much revenue that raises to help us assess the impact on problem gambling because the government says that that information is likely to be commercial-in-confidence. I would like to confirm whether it is indeed the case that the amount that will be raised by the purchaser of the TAB specifically from Trackside will remain commercial-in-confidence or whether we will know. The Gaming and Wagering Commission will be able to request a report on the number and location of TAB outlets that are offering simulated races and it will be able to request information about the amount of revenue from simulated races, but it will not be able to disclose that information, as I understand it. We will never know.

Page 2 of the second reading speech sets out the government’s objectives in respect of the sale of the TAB. It refers to wanting to support the racing industry and optimising value for the state and the racing industry. It refers to maintaining the integrity of racing and wagering activities and the need for a fair and robust process. However, absent from this list is anything about minimising the negative social impacts of gambling. There is an inconsistency between the government’s position on the Gaming and Wagering Legislation Amendment Bill 2018, in which it wisely took a harm-minimisation approach, particularly in relation to synthetic lotteries—a position supported by the Greens—and its position on this bill, under which the government is allowing TAB outlets to have synthetic racing in an attempt to increase the TAB sale price. If the new wagering operator chooses to introduce simulated races, people are going to be able to play them at any TAB outlet that offers them instead of only at the casino, which has been the bipartisan position until now. Races are going to be shown on television screens and bets will be placed at existing terminals. It is noted that there are controls on simulated racing and some differences between the nature of simulated racing and pokies; nonetheless, the bill undeniably makes simulated racing more broadly available, including introducing it to regional Western Australia for the first time. It is not something those areas have had before. It introduces into TAB outlets a gambling product that is based on a mathematical algorithm. The government argues that this product is going to replicate what is already available at TABs and is simply available to be used between live races, but live races do not involve a machine with a mathematical output. It introduces into TABs a gambling product that is not affected by the weather and subject to licence conditions, so it can be used to fill voids in the racing timetable or even run simultaneously with and potentially overrun it, because the limitations on how it can be used are not prescribed within this bill.

The second reading speech states that the Gaming and Wagering Commission does not oppose the introduction of simulated racing, subject to the proposed regulatory measures; however, many people oppose it very strongly. Members have received considerable correspondence from people who oppose the inclusion of simulated racing in the TAB (Disposal) Bill. In fact, it is the only aspect of the bill on which I have received correspondence, except when I met with the Free the Hounds group, which has also expressed its concerns. I have already asked the minister a question about that.

The Western Australian Council of Social Service and the Financial Counsellors’ Association of Western Australia have said that they fear that the result is going to be an increase in problem gambling. Anglicare has said that it fears that the introduction of simulated racing is the thin edge of the wedge. In fact, the 2014 Gunston report, which I referred to at the beginning of my contribution, confirmed that there is going to be pressure to expand this further. We know that no new money is being put into problem-gambling services, although this is something that both WACOSS and the Financial Counsellors’ Association of WA have said they want. The Treasurer has already said that he believes there is no need for more funding for problem-gambling services because there are no waiting lists at existing services. That would probably be because we do not have simulated racing or any sort of electronic gambling widely available within the community at the moment, but hey. During the debate, he also expressed a willingness to review now, within the six months before the TAB sale occurs, the effectiveness of existing problem-gambling programs to see whether anything can be done better, but he did not undertake to go ahead and do so. I subsequently asked whether that review had commenced; and, if not, whether the government would commit to undertaking that extra review. I was not able to get any such commitment from the government. I was simply told again that there is going to be a review of the impact of simulated racing on problem gambling three years after the new arrangements have commenced, as per the proposal within the bill.

The Greens absolutely oppose the simulated racing provisions in the bill. As a result—we will talk about this more when we get into committee—we will be attempting to move the Trackside provision within the amendments that we have proposed, which were circulated during the winter recess. They are quite lengthy, but I want to assure members that they aim to do only one thing, and that is to remove the simulated racing provisions from the bill. I would urge all members to seriously consider them.

There have been some who have wanted to belittle the important voices of the people who raise concerns about the introduction of Trackside through this bill, and I want to give those people a voice. It is really important that I raise the concerns that have been raised with me. Comments have been made to me that these machines are going to be particularly bad for country racing clubs, because they actually have nothing to do with the reason that people within country communities come together; they are simply going to be used for the purpose of sitting down and engaging in electronic gambling. Frontline services are particularly concerned about the prospect of a wave of gambling-related financial hardship stress and relationship breakdown. Financial counselling and emergency relief services in WA are already turning away more people than they are able to help, and no-one in the WA government has modelled or announced a plan to fund the additional services that are going to be needed to cope with demand. I am quite happy to table any of these letters, but I have a letter from WACOSS about opposing simulated racing machines. It states —

Western Australia has been rightly proud that we have prevented the proliferation of electronic gambling machines throughout our community, as has been seen in the eastern states. The current legislation before parliament, however, will allow countless monitors into the 908 TABs across Western Australia—dramatically increasing the accessibility of gambling in our state.

The WACOSS submission goes on to state that these so-called simulated racing machines have much more in common with pokies than with betting on a live race. That is true. They are a device to increase how often people are able to bet and so increase people’s exposure to the harmful impacts of gambling. The submission continues —

The harms from gambling can have a devastating impact on communities who then see increasing demand for services covering financial counselling, homelessness, alcohol and other drugs, and counselling.

The submission points out—as do many of the other letters —

WA currently has the lowest per capita expenditure on gambling in Australia at $683 per capita, compared to the national per capita spend of $1,251. By allowing electronic simulated racing machines into our TABs, the amount of money Western Australians lose on gambling will only increase. Any revenue that the State Government will receive by including the permission to use Trackside as part of the sale of TAB, will be greatly eclipsed by the social costs of gambling harm.

We also heard from the Financial Counselling Network, which notes that in other jurisdictions, electronic racing terminals resemble slot machines. I go back to a question Mark McGowan asked the then Minister for Racing and Gaming on 28 June 2016 —

I refer to confirmation by the Minister for Racing and Gaming that the state government is considering allowing Keno and virtual horseracing machines outside Crown Casino as part of the proposed sale of the Western Australian TAB.

(1) Do Keno machines and electronic virtual horseracing machines require punters to put money into the machine, and can punters lose their money?

The then minister, Terry Redman, replied —

(1) Keno and electronic virtual horseracing games operate in a similar manner, in that a player makes a bet selection and can win or lose based on the outcome.

The answer to that question is effectively, “Yes, that is what they do.” I note that at that point, correctly, the now Premier was making the correlation between simulated racing and keno. He was obviously concerned about this, yet now there just seems to be this really weird attempt to try to separate the two, as though somehow one is absolutely benign and the other still continues to be a problem. But, no, members, that is not the case. I go back to the letter from the Financial Counselling Network, which states —

Financial Counselling Australia’s report ‘Problem Gambling Financial Counselling—Survey and Case Studies’ found that overwhelmingly, the main form of problem gambling was poker machines across all genders and age groups. Of those experiencing problem gambling, almost all are unable to pay bills, half had borrowed money for their gambling and half had also experienced relationship breakdown due to problem gambling. Family violence, suicide ideation and fraud are also associated with this group.

The letter also refers to how the agency is already turning away more clients than it is seeing and to the social impact and cost associated with the introduction of electronic gaming machines as being catastrophic for those who are already doing it tough. Members, we should be listening to this. We should not just dismiss it and say, “No, it’s not going to be a problem.” I am really keen to return to a comment by the Premier reported in an article by Jessica Strutt from the ABC in 2018, in which he talked about the potential expansion of gaming machines, including electronic horseracing as part of a potential TAB sale, of which Mr McGowan was apparently highly critical. The article states —

“All that will mean, is more people will pour their money into those machines, ... particularly those on pensions, and those who can least afford it, will lose money,” Mr McGowan said at the time.

“It brings some of those social ills, in particular gambling addictions and the like that we’ve seen in New South Wales, Victoria, and Queensland now for decades to Western Australia.

“It is a very, very disturbing development and I oppose it absolutely.”

This was in June 2018, which is really not that long ago.

Hon Colin Holt: It was 2016.

Hon ALISON XAMON: I have the article, so I will double-check that for the purposes of Hansard.

Members, the Premier was right then and he is wrong now. Other organisations have raised concerns. The Women’s Council for Domestic and Family Violence Services has raised concerns, and so it should, because we know there is a direct correlation between increased levels of family and domestic violence in homes in which there are gambling problems. Of course it is going to be concerned about this legislation. The Public Health Association of Australia submission states —

Gambling causes harm to the physical, social and mental health of communities and individuals. Moderate to severe problem gambling has been linked to suicide, relationship breakdown, financial difficulty, mental health issues, and crime. Gambling affects vulnerable groups in our communities, including people from low socioeconomic backgrounds.

Western Australia is currently the only Australian jurisdiction that restricts simulated racing and poker machines to the casino. The restrictions are the result of decades-long bipartisan commitment. Prior to the 2017 State election, both the Labor and Liberal parties committed to keeping the current restrictions in place.

The Public Health Association makes it very clear that it strongly opposes the installation of simulated racing machines in TABs and states —

Any expansion of electronic gambing is likely to increase gambling harm across our communities, as electronic gambing machines are generally held responsible for the majority of gambling harm.

The Public Health Advocacy Institute of Western Australia has issued a comprehensive gambling position statement in which it refers to who is deeply at risk and says, “Please do not introduce this to our state.” A submission from Anglicare WA states —

A plethora of evidence produced by both researchers in this country and overseas, attests to the damaging impact, both personal and societal, of addictive gambling, particularly involving digital gaming machines.

Members, this is the insidious nature of the type of gambling mechanisms that we are talking about. They are addictive and they are intended to be addictive. There is a reason why it is considered to be appealing to have these sorts of machines in a future sale of the TAB; that is, they make money. They make money because people are losing money. People are losing money because the machines are highly addictive. Notwithstanding some members’ comments that not everybody has a gambling problem—that is, absolutely, 100 per cent the case—we should be trying to limit those mechanisms that contribute to harming those people who do have a gambling problem. This state has a long and, I think, very proud history of ensuring that we do not have these electronic gaming machines in our suburbs. Personally, I would not care if they were gone from the casino. I do not know about other members, but I walked through the pokies section of the casino about 12 months ago, and I thought it was a dismal little place. Nevertheless, I understand that people usually have to drive a very long way to be able to go to the casino. This would be very different; machines would be just around the corner and attached to a pub where someone could have had far too many drinks and potentially gamble away not only their money but also the money of the people who may depend on them.

I also refer to the Salvation Army’s contribution. It states —

Whilst we acknowledge the perspective that these machines introduced into TAB agencies are a service already provided but just in electronic form, it is portrayed as a “game” being simulated with the underlying premise being consistent with Pokies—that of weighting heavily in favour of the operator. The outcome of this legislation does nothing to prevent the impact of problematic gambling; only enhancing its prospects. The Salvation Army supports the current policy of restricting gaming machines to one specific location and encourages a determined resistance of any Government not to relent to external pressures.

Our best advice in this area of problem gambling is to deliver public policy that impacts in the following areas:

• Recognise—Understand the impact to individuals and our broader community and in this case consider: what are the possible outcomes that are counter-productive to our community health?
• Reduce—One strategy in WA has been to attempt to contain the impact of problematic gambling by limiting gambling activity to a single venue. This provision at question is potentially counter intuitive as the increased saturation of available gambling options across the entire state heightens the risk exposure.
• Prevention—The current proposal does nothing to prevent the impact of problematic gambling.

It goes on to say —

We are naturally concerned if the representation of gaming machines is decentralised into the heart of our communities no matter what the nature of the gaming machine is; it remains an opportunity for addiction to take its hold.

We have heard concerns from Communicare, which is also at the forefront of working with people with a gambling addiction, and the Youth Affairs Council of Western Australia, which is deeply concerned about safeguarding young people in particular from gambling harm. I also acknowledge the Australian Christian Lobby, which has been consistently concerned about this. I have also heard from many individuals, as have other members. One comment was —

It’s very concerning to see the government imply that these machines are not pokies. The reality is that simulated racing machines have much more in common with pokies than betting on a live race, particularly as the odds are generic and the winner randomly generated by a computer.

Having seen a close friend help a family member through a pokies addiction, which is still ongoing, I am concerned about the increased availability of electronic gambling machines outside the casino. At the moment, my friend’s mother has to travel to access pokies and other electronic gambling machines. Should this bill pass as proposed, she will be able to access electronic gambling machines in her own suburb. The experience has also taught me that gambling affects people other than the gambler and results in a wide range of issues, including relationship breakdown, financial difficulty and mental health problems.

This is the sort of personal impact that gambling has. I pick up on the words of another individual who has written to us. They ask —

• What provisions have been made to limit technological changes to Simulated Racing Machines ... only?

Good question! I imagine that a lot will change over the duration of this licence. It continues —

• What provisions have been made to ensure lost data for SRM (from Day 1) are transparent and accessible to the community, researchers etc?
• What provisions have been made to restrict multiple individual SRM terminals to operate in TAB outlets and pub and club venues?
• What provisions have been made to cover increased costs of gambling related harm?

We know a lot of this, members. We know that nothing has been done to help this. It continues —

While hoteliers associations and the gaming industry may suggest SRM are not electronic gaming machines, they most certainly are. They may suggest no one will play them, they are wrong. They may suggest SRM replicate real horse races, they do not.

They do not! I agree with Anglicare and I am happy to go on the record. I stand here in August 2019 to say that I think this is the thin edge of the wedge. I am really disappointed that we have gone down this path. I want to be clear that I am not concerned merely about Trackside potentially leading to other electronic gambling operations being made available, although I am very concerned about that because the Gunston report made clear that the interest all along was to expand the operation of various electronic gambling operations. I am also concerned about Trackside in its own right because there is concern that it will be addictive. People can play up to 200 games a day on these machines, even with the limitations being proposed for time between games. A huge amount of money could be lost by people with gambling problems or people who may not have gambling problems but develop gambling problems. That is incredibly disappointing.

I want to say to how disappointed I am to hear the contributions of members who seem to have a fatalistic view of the issue of problem gambling. When a member stands and says, “What is the issue? People can access it on their phones now”, all I hear is that they have given up and think that there is nothing we can do, that people are going to gamble and we should let them go crazy and do anything all the time. I respect that some members might ideologically hold that view, and I respect the consistency of that at least. However, many of us are concerned about problem gambling and recognise that it is an enormous issue for individuals and families. It impacts negatively on our communities and, as a result, for good reason, we try to not only regulate but also limit people’s capacity to engage in problem gambling. I make the clear statement that I think this is a pathway to pokies, but I also think that it is bad on its own terms and that we should reject electronic gambling. I am very disappointed that this has been made an integral part of the sale of the TAB. It is a deeply flawed approach and, ultimately, we will end up paying more for it as a community. For the small amount of money that will be made available from this—it has been estimated to be around three per cent or four per cent—we will be paying much higher costs as a community. It is desperately disappointing that the bipartisan approach we have held for years in opposing the introduction of this type of electronic gambling in our state has been shattered. For that reason and the concerns I have about animal welfare, the Greens will oppose this legislation.

Comments and speeches from various members

Debate adjourned, on motion by Hon Sue Ellery (Leader of the House).