FactCheck: would pokies reform in South Australia wipe out 'many' of 26,000 jobs?

  • Written by Fabrizio Carmignani, Professor, Griffith Business School, Griffith University

This plan will decimate hotels across South Australia, wiping out many of the 26,000 jobs it directly creates.

Australian Hotels Association (South Australia) chief executive Ian Horne, quoted in The Guardian, February 21, 2018

… a majority of pub employees (over 26,000 in SA!) will likely lose their jobs.

Letter signed by the McCallum family, owners of The Lonsdale Hotel, February-March, 2018

SA Best leader Nick Xenophon has said that if his party wins the balance of power in this Saturday’s South Australian state election, poker machine reform would be “a key issue in any negotiations” about the formation of the next government.

Among other reforms, Xenophon has proposed a reduction in the number of poker machines in some pubs by 50% over five years, and the introduction of a $1 maximum bet per spin for machines in all venues other than the Adelaide casino.

The South Australian branch of the Australian Hotels Association (AHA SA), led by chief executive Ian Horne, says the SA Best policy would “decimate hotels across South Australia, wiping out many of the 26,000 jobs it directly creates”.

A letter signed and shared by the owners of one Adelaide hotel went further, saying “a majority” of 26,000 South Australian pub employees would “likely lose their jobs”.

Is that right?

Checking the source

In response to a request for sources to support the claim made in the Lonsdale Hotel letter, Keith McCallum referred The Conversation to the AHA SA.

A spokesperson for the AHA SA pointed The Conversation to a February 2018 newsletter from Ferrier Hodgson Adelaide partner David Kidman, and the ‘No Way Nick’ website, authorised by AHA SA chief executive Ian Horne.

The Conversation asked the AHA spokesperson to quantify what the association meant by “many” jobs, but did not receive a response to that question.


The claim made by Australian Hotels Association of South Australia that proposed poker machine reforms would wipe out “many of the 26,000 jobs” in the South Australian hotel industry appears to be grossly exaggerated.

The Australian Hotels Association did not provide modelling or evidence to show how “many” jobs might be affected.

The number of gaming related jobs in South Australian hotels in 2015 was around 3,000. In the same year, less than 20% of the South Australian hotel industry’s revenue came from gaming.

The reforms proposed by SA Best aim to reduce the number of poker machines in some hotels, and reduce maximum bet limits, rather than removing the machines entirely.

Based on these factors, the Australian Hotels Association claim greatly overstates potential job losses.

In addition, at least some of the money not spent on poker machines would be spent on other recreational activities.

This means that potential job losses due to poker machine reforms may be partially offset by increases in employment elsewhere in the economy – or even within the same hotels.

What changes is SA Best proposing?

Among a suite of reforms, the SA Best party wants to reduce the number of poker machines in pubs with 10 or more machines by 10% each year over the next five years. This reduction wouldn’t apply to not-for-profit community clubs or the Adelaide Casino.

SA Best is also proposing the introduction of a $1 maximum bet per spin and a maximum win of $500 for machines in pubs and and not-for-profit community clubs.

SA Best leader Nick Xenophon said these reforms would reduce the number of poker machines in South Australia from around 12,000 to around 8,000, and reduce potential personal losses on pokies in pubs and community clubs from around $1,200 an hour to around $120 per hour.

The policy includes a poker machine buyback scheme, a “jobs fund” to assist affected employees, and the possibility of compensation for smaller poker machine operators.

Would ‘many of 26,000 jobs’ be wiped out?

First of all, let’s look at how many people work in the hotel industry in South Australia, and how many of those jobs are related to gaming.

This information is not available from the Australian Bureau of Statistics.

However, in January 2016, the South Australian Centre for Economic Studies published a report that examined the economic contribution of the hotel industry in South Australia.

The report was commissioned by the AHA SA, but it adopts a sound statistical approach to measuring employment in the hotel sector.

According to that report, a total of 26,250 staff were employed in hotels in South Australia in 2015. Of those, 3,048 were classified as gaming staff (or 11.6% of total employment).

Of the 26,250 people employed across the industry, the majority were casual staff (rather than permanent or part-time staff).

The SA Best proposal is to reduce poker machine numbers and maximum bets in some venues, as opposed to removing pokies entirely. So it’s clear that not all 3,000 gaming staff would be at risk.

However, the AHA SA is arguing that reduced revenue from pokies would threaten other jobs.

According to the same report, in 2015, 17% of the South Australian hotel industry’s annual revenue came from gaming. Around 80% of revenue came from liquor sales, food and beverage sales and accommodation.

So even in light of reduced gaming revenue, assertions that “many” or “the majority” of 26,000 pub employees would be affected appear to be unsubstantiated.

Jobs may be shifted elsewhere

To understand what might happen if Xenophon’s proposed reforms were introduced, we need to take two factors into account.

On the one hand, if less money is spent on poker machines, then the number of hours requested to service gaming activities decreases. This could result in less demand for labour, and hence a potential reduction in the number of those roles.

On the other hand, money not spent on gaming could be redirected to other recreational activities – like going to cafes, restaurants and cinemas – or to the retail sector. This would mean that new jobs would be created in other parts of the economy.

Spending diverted to food and beverage sales and other forms of entertainment could also see new jobs created within the same venues.

Another report conducted in 2006 by the South Australian Centre for Economic Studies, commissioned by the South Australian Independent Gambling Authority, found that following the introduction of electronic gaming machines in South Australia, employment in hotels did increase.

However, most of this increase came at the expense of other businesses, like cafes and restaurants. This shows that there is a strong substitution effect in employment between gaming activities and other recreational activities.

Having been published in 2006, the exact numbers in the report are dated. But the qualitative argument is unlikely to have changed. This conclusion is also supported by more recent studies.

In summary, while some of the 3,000 gaming-related jobs in the hotel industry may be lost as a result of the proposed poker machine reforms, claims that “many” or “the majority” of 26,000 jobs would be lost are grossly exaggerated, and not supported by available evidence or existing research. – Fabrizio Carmignani

Blind review

I agree with the conclusions of this FactCheck.

The assertions that “a majority” or “many” of the 26,000 jobs in the South Australian hotel industry would be lost if the proposals put forward by SA Best were to be implemented are gross exaggerations.

They might not be quite as gross an exaggeration as the analogous assertions made in Tasmania during that state’s recent election campaign, but they are an exaggeration, nonetheless. – Saul Eslake

The Conversation is fact-checking the South Australian election. If you see a ‘fact’ you’d like checked, let us know by sending a note via email, Twitter or Facebook.

The Conversation thanks The University of South Australia for its support.

FactCheck: would pokies reform in South Australia wipe out 'many' of 26,000 jobs? The Conversation FactCheck is accredited by the International Fact-Checking Network.

The Conversation’s FactCheck unit was the first fact-checking team in Australia and one of the first worldwide to be accredited by the International Fact-Checking Network, an alliance of fact-checkers hosted at the Poynter Institute in the US. Read more here.

Have you seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link or a photo if possible.

Authors: Fabrizio Carmignani, Professor, Griffith Business School, Griffith University

Read more http://theconversation.com/factcheck-would-pokies-reform-in-south-australia-wipe-out-many-of-26-000-jobs-93189

Australia Today

Dry Carpet Cleaning Vs Steam Carpet Cleaning: Which one to Choose?

News Company

A clean carpet not only improve your interiors, increases your comfort around the office and home but also beneficial for your health. This is why it is necessary to choose the right way to do it. Either you can take the high road and do it yourself, or you can hire the professional to do the clea...

Read more

Creating research value needs more than just science – arts, humanities, social sciences can help

Rachel A. Ankeny, Professor of History and Associate Dean Research (Faculty of Arts), University of Adelaide

Actually yes, science and the arts do work together. from www.shutterstock.com This week we’re launching Making science for people, a series of articles that explores how humanities, arts and social sciences expertise is applied to problems typically corralled into the science and technology s...

Read more

Patriarchs on pedestals? How doctors are taught to improve their bedside manner

Mark Wilson, Associate professor, University of Wollongong

Student doctors need good role models to learn good patient communication. from www.shutterstock.comUp until around 30 years ago, in the days of paper patient files, doctors were on pedestals and patients generally did as they were told, in a more patriarchal model of patient care. Over 2,400 years ...

Read more

How the Anglican Church has hardened its stance against same-sex marriage

Muriel Porter, Honorary Research Fellow, Trinity College Theological School, University of Divinity

In the aftermath of the legalising of same-sex marriage in Australia, the Anglican Church has ramped up its discrimination against gay people to new heights.Not content simply with the discrimination built into the legislation – per ministers of religion to refuse to marry same-sex couples &nd...

Read more

rejecting neoliberalism shouldn't mean giving up on social liberalism

Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW

shutterstockRichard Denniss’s Quarterly Essay, “Dead Right: How Neoliberalism Ate Itself and What Comes Next”, is a thought-provoking call to arms against an array of perceived ills – economic rationalism, market forces, small government, tax cuts, incentives, even corporate ...

Read more

Holidays & Travel

Dredging works underway Plantation Island

Tourists and workers travelling to popular tourist destination Plantation Island, Fiji, are set to benefit from safer access when marine channel dredging is completed at the end of June 2018...

Top 5 Tips for Traveling With Dogs

Travelling with your dog can be thrilling, but sometimes it can turn into a real nuisance. Unless you know how to properly restrain the pooch, whether it’ll be able to...

Top Island Destinations for 2018

When we picture island destinations in our minds, we often imagine a tropical beach of white sand, a sun lounger laid out in the shade of a line of palm...

Why Car Rental Excess Insurance is a Smart Choice

Some car rental agencies include basic damage cover in the standard rental fee, with the option to add on liability reduction, or excess insurance. The addition of excess insurance normally...

More Than a Third of Australians Feel 'Too Busy' With Work to Take a Holiday

New research from InterContinental Hotel & Resorts has unveiled a large number of Australians (32 percent) are simply too busy with work to take some much-needed rest and relaxation. Almost...

Matakauri Lodge and Mahu Whenua Lodge

TRIED, TRUE AND SOMETHING NEW  A luxurious accommodation package at Matakauri Lodge + Mahu Whenua Lodge South Island, New Zealand  Available 1 May, 2018 - 30 September, 2018   Central Otago, NEW ZEALAND –...

Heaven is the Adelaide Hills

Looking for a quick getaway? Enjoy food and wine? How about stunning countryside? Look no further! The Adelaide Hills has something for everyone. We flew to Adelaide for a weekend-getaway...

5 Amazing Australian Holiday Ideas

Australia is one of the most fantastic places in the world to travel, explore, and witness all of the beauty that Mother Nature has to offer. With so much rich...

Top Amenities You Enjoy by Renting Luxury Caravans for Road Trips

Do you love to undertake road trips? What the luxury cruises on the ocean are for ocean travelers, luxury caravanning is the same for land-lubbers. Traveling in a luxury caravan...

Fashion & Beauty

Simple Secrets To A More Confident Smile

We all know just how important first impressions are. After a handshake, what’s one of the first things people will notice about you? It’s your smile. A friendly smile is...

Improve Your Body Confidence and Feel Great

No matter how good you feel about yourself, sometimes you just can’t help but see a few little flaws that seem gigantic to you and make you feel self-conscious. Whether...

First-Timer Tips For Your First Lip Filler Appointment

Getting injectable lip fillers can be a quick and effective way to plump up your smile with minimal drama. They’re a cost-effective and safe way to boost the natural shape...

The Most Common Skin Conditions and How to Deal with Them

We often underestimate the importance of our skin, but as the largest organ in our body, and our primary layer of defense, it is constantly affected by many environmental factors...

Beach Babe Basics: Everything You Need to Look Stylish at the Beach

Summer is right around the corner, and this year, we all should make the best of it. Right now, it is not just about looking stylish on the streets, it...

Easy Dress-Up Tips for Lazy Girls

Look, getting all dolled up is fun, but you may not always be in the mood for it. Unfortunately, though, this is exactly when you are asked to go to...


My Health Yoga

Carrie-Anne Fields of My Health Yoga has taken her Gold Coast yoga teacher training worldwide. She started her health business 20 years ago aged 22 and has grown into a...

Fit Body 101 - Increase Your Fitness Effectiveness

You have to find some space for physical exercise in your weekly schedule in order to live a good life. Embracing this way of life is very beneficial because it...

The World of Dentistry: 5 Most Common Dental Procedures in Australia

Are you dissatisfied with the state of your pearly whites? Do you often experience discomfort and pain while eating and drinking? Well, be sure that you’re not the only one...

How You Can Conquer Your Dental Anxiety

Does the thought of going to the dentist fill you with dread? Well, you will be pleased to know that you are not the only one. A large number of...

Up and away: the impact of flying on your health

These school holidays, many people will take to the skies, unaware of the risks flying can pose to their health. Brisbane based house call doctor Ryan Harvey said it was important...

How to Lose Weight After 40

As you age, your metabolism slows down, which makes losing weight much harder. Additionally, your hormones start to fluctuate significantly, causing easier weight gain. Sticking to the same tricks you...


Dry Carpet Cleaning Vs Steam Carpet Cleaning: Which one to Choose?

A clean carpet not only improve your interiors, increases your comfort around the office and home but also beneficial for your health. This is why it is necessary to choose...

Carpet cleaning: Things you need to know

Carpets are one of the most essential room interiors, and the kind of maintenance it requires is nothing worth comparison. We understand the importance of good health and hygiene at...

Get The Look: How to build a beautiful weatherboard home

Coastal, Queenslander and Contemporary Australia’s love affair with the weatherboard look can be seen in many of our historic and most popular styles – from the Queenslander to coastal and new...

The Fabrics That Make the Simple Indian Saree Sizzle

6 Yards of Sophistication and Sensuality Saree – an attire that can take you from boardroom to cruises; from kitchen to red-carpet; from lounging to marathon; from weddings to vacation –...

6 Tips for Mixing Design Styles Like a Pro

Each interior style is unique in its own way, creating a specific ambiance in our homes. While some accentuate simplicity and formality, others embrace playfulness and authenticity. Thus, you’re left...

Deborah Hutton: Designing My Dream Hamptons Inspired Home

Television presenter, magazine editor and media personality, Deborah Hutton is renovating her charming three bedroom house in Bronte, into her own Hamptons inspired forever home, with work due to be...


Morning greens: the breakfast skincare regime

It’s safe to assume that most Aussies fail to eat enough greens. Although this was momentarily resolved with the rise and popularity of the green juice movement, the lack of...

Best Hidden Gem Hong Kong Restaurants

You finally find yourself enjoying the endless beauties of China and this fascinating city. In a place with so much variety, all your senses will be wide awake, and your...


Johnny Di Francesco, world champion pizzaiolo and owner of Melbourne’s Gradi Group of restaurants, is excited to announce he has been named official ambassador for Eat Street Melbourne 2018. As Ambassador...

The best Mother's Day gift EVER!

Whether it’s to celebrate a special occasion, or just wind down at the end of a long day, there’s nothing much better than pouring yourself a glass (or two…) of...

Sing for Your Supper at Chargrill Charlie’s

To celebrate the final curtain call of the Barden Bellas, Chargrill Charlie’s is giving you the chance to Sing for your Supper! Show off your best acapella vocals to win...


Whether it’s to celebrate a special occasion, or just wind down at the end of a long day, there’s nothing much better than pouring yourself a glass (or two…) of...