Cost Benefit Analysis of Interactive Gambling Act 2001 Presented By: Josephine Chuk & Paul You

What is Interactive Gambling Act 2001? Passed on 28 June, 2001 Passed on 28 June, 2001 Objective of Act: Objective of Act: To address the issue that interactive gambling may provide a “ quantum leap ” in access and an increased risk of problem gambling. Content of Act: Content of Act: Prohibits online casinos from taking bets from Australian Internet users but allows the provision of interactive sports betting and wagering services.

Growth in Australian Gambling Expenditure 1987/88: $45 B 1997/98: $115 B 256%

Expenditure by Type of Gambling Activity Gaming machine & casino shares 72% of total, grow by 190%

IGA2001 Benefit-Cost Analysis Framework CBA of IGA2001 Opportunity Cost of IGA2001 Benefit of IGA2001 Externalities of IGA2001 “With” Case “Without ” Case Net Social Impact “Without” Path“With” Path Cost to Implement IGA2001 Social Impact of IGA2001 Implementation in & outside Gambling Industries Positive Impact Negative Impact Net Benefit or Cost of IGA2001 in 2003 Net Benefit/cost of IGA2001 in Perspective Other Externalities

Net Impact Measurement Framework  What we want to measure: C – D  How we measure: C – D = (A+C-A) – (B+D-B) A+C-A: Positive Impact A+C: “Without” Case A: “With” Case B+D-B: Negative Impact B+D: “Without” Case B: “With” Case A E C D B F Positive Impact Negative Impact ABCD: Gambling Industry CDEF: Internet Industry CD: Internet Gambling

Positive Social Impacts of IGA2001 Implementation Consumer Surplus Consumer Surplus Taxation Effect Taxation Effect Adjustment for Problem Gamblers Adjustment for Problem Gamblers Adjustment for Problem Gamblers with Taxation Adjustment for Problem Gamblers with Taxation

Negative Social Impact of IGA2001 Implementation Tangible Cost - financial costs (bankruptcy) financial costs (bankruptcy) productivity loss productivity loss job change loss (income, job replacement) job change loss (income, job replacement) crime and legal cost (police, court, jail sentences) crime and legal cost (police, court, jail sentences) Problem gamblers treatment costs Problem gamblers treatment costs loss of online gambling revenue loss of online gambling revenue additional legal cost on illegal website additional legal cost on illegal website Intangible costs – Personal and family cost (distress, relationship break-up, depression, etc) Personal and family cost (distress, relationship break-up, depression, etc) Diminish people ’ s enjoyment benefits Diminish people ’ s enjoyment benefits

The Result …

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