FactCheck: are 'around 5,000 jobs' at risk if pokies are removed from pubs and clubs in Tasmania?

The gaming industry estimates that around 5,000 jobs are at risk if electronic gaming machines are removed from pubs and clubs.

– Excerpt from the Tasmanian Liberals’ Future of Gaming in Tasmania policy document, February 2018

The future of electronic gaming machines – commonly known as poker machines or “pokies” – in Tasmanian pubs and clubs has become a key battleground in the state’s upcoming election.

The incumbent Tasmanian Liberals have promised to end the monopoly on poker machine licenses currently held by the Federal Group, and put the licenses for non-casino machines to public tender in 2023.

Meanwhile, Tasmania’s opposition Labor Party has promised to remove poker machines from pubs and clubs by 2023, offering A$50 million to assist venues make the transition.

In a document outlining its policy, the Tasmanian Liberal party cited “gaming industry” estimates that “around 5,000 jobs are at risk if electronic gaming machines are removed from pubs and clubs”.

Are those estimates correct?

Checking the source

The Conversation contacted Tasmanian Premier Will Hodgman’s office to request sources and comment to support the claim, but did not receive a response.

Nonetheless, we can test the statement against publicly available data.

Verdict

The claim promoted by the Tasmanian Liberal Party that “around 5,000 jobs are at risk if electronic gaming machines are removed from pubs and clubs” is an exaggeration – and a significant one.

Finding precise employment figures for the gambling industry is difficult.

But data recently released by the Tasmanian Government Department of Treasury and Finance estimated that in 2017, there were 370 full time equivalent jobs related to poker machines and keno in hotels and clubs in Tasmania.

Even when we consider that the number of people employed would be higher than an estimated 370, because some people work part time, the claim that a change in legislation would place “around 5,000 jobs” at risk is a significant overstatement.

How do we count jobs in the gambling industry?

Finding employment figures for the gambling industry is difficult, because generally the government doesn’t collect detailed employment data for this sector.

The most reliable source for jobs figures, at this stage, is the Fourth Social and Economic Impact Study of Gambling in Tasmania report, released by the Tasmanian Government Department of Treasury and Finance in December 2017.

This report provides comprehensive employment estimates using information received from stakeholders in the gambling industry, including industry associations, local governments and the Tasmanian Liquor and Gaming Commission.

The authors of this report did note that the full time employment estimates are “based on limited industry employment data and stakeholder insights”, and warned that “caution must be used when quoting these figures”.

What did the report find?

That study estimated that in 2017, the total gambling industry in Tasmania employed approximately 1,086 full time equivalent jobs across the state. According to the report, this was approximately 0.5% of total full time equivalent employment in Tasmania.

About one third of those jobs (370) were related to pokie machines and keno in hotels and clubs.

The Australian Bureau of Statistics defines ‘hotels’ as pubs and similar venues, so we’ll use the terms interchangeably in this FactCheck.

One “full time equivalent” job is equivalent to 38 hours of employment a week, or 1,748 hours a year. So the number of people employed in the gambling industry is likely to be higher than 1,086 – because some people will work part time.

But given that there are 370 full time equivalent jobs in hotels and clubs related to pokies and keno, saying that “around 5,000 jobs” would be at risk if pokies were removed from pubs and clubs is an overstatement – even accounting for the difference between full time equivalent roles and the number of people employed.

Even if we consider the number of 1,086 full time equivalent roles for the entire Tasmanian gambling industry, to say around 5,000 jobs would be at risk is a significant overestimation.

Redirecting the money spent on pokies

The Treasury report found that in May 2017, there were 3,596 poker machines in casinos, clubs and hotels in Tasmania, including 36 on board the Spirit of Tasmania ships.

Neither the Tasmanian Liberal or Labor parties are proposing to remove poker machines from casinos. So, excluding casinos, we can see that 89 hotels held licenses for 2,248 poker machines, while seven clubs held licences for 127 poker machines.

According to the report, in the 2015-16 financial year, A$191 million was spent on pokies in Tasmania. That A$191 million figures is for pokies alone, and doesn’t include race wagering, gaming in casinos, keno, lotteries, sports betting and online gambling.

It’s important to keep in mind that even if some jobs were lost in the gambling industry as a result of the change in legislation, other jobs would be created elsewhere in the economy.

This is because at least part of the spending on gambling in hotels and clubs could be expected to be redirected to other activities. As mentioned earlier, in the 2015-16 financial year, A$191 million was spent on pokies in Tasmania.

If pokies were removed from pubs and clubs, some of this spending would likely go to gambling in a casino, or to online gambling. But another part would likely go to other forms of spending, which in turn could generate additional income and jobs in the rest of the economy.

A study published in July 2017 by Professor John Mangan at the University of Queensland specifically examined these ‘spillover’ effects for the Tasmanian economy.

Mangan’s analysis suggested that removing pokies from hotels and clubs would be beneficial to the Tasmanian economy, and could increase employment in Tasmania. – Fabrizio Carmignani

Blind review

I agree with the conclusion of this FactCheck. Based on the most authoritative available estimate of gaming-related employment in Tasmanian hotels and clubs, which this FactCheck uses, it is impossible to take seriously the assertion that the removal of poker machines from them in five years’ time could cause the loss of around 5,000 jobs.

That would imply that for every job directly attributable to the presence of pokies in hotels and clubs, more than 13 jobs were created indirectly in Tasmania. And if that were really true, then the installation of poker machines would have to be the most effective form of job creation ever devised, anywhere – which is nonsensical. – Saul Eslake

The Conversation’s FactCheck unit is 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.

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