Counting the cost: inquiry into the costs of problem gambling

This report presents the findings of an inquiry commissioned to inform policy makers and the community about the true costs of problem gambling and where they fall. Key messages: There are a number of obstacles to quantifying the true social and economic costs of problem gambling: there are significant data gaps, methodological issues and a lack of consistency among existing data sources many of the costs are intangible and difficult to value problem gambling is often closely associated with other mental and physical issues, raising the question of causality. Taking into account these obstacles, the Commission estimates that the social and economic costs of problem gambling in Victoria were likely to be between $1.5 billion and $2.8 billion in 2010-11. The vast majority of the quantifiable costs come from two sources: costs associated with excess gambling expenditure by problem gamblers ($1 billion to $1.4 billion); and the intangible costs associated with impacts on mental wellbeing for problem gamblers and their families ($400 million to $1.2 billion). A relatively small proportion of the population — around 30 000 problem gamblers and their families — therefore bear the majority of the costs. Victorian Government spending on problem gambling is also significant. Direct and indirect costs to the Victorian Government, including costs of treatment services and costs to the health, human service and justice systems were estimated to be between $74 million and $147 million in 2010-11. There is limited information on the geographical distribution of problem gambling costs. Local characteristics may drive differences in the prevalence of problem gambling and therefore costs of problem gambling across geographical regions. In metropolitan regions, the number of electronic gaming machines, the level of total expenditure, and measures of socioeconomic disadvantage align with problem gambling prevalence rates. However, the same observation cannot be made consistently across regional Victoria. To improve the information base for policy development, decisions on industry regulation and targeting of service delivery, the Commission recommends the Victorian Government articulate its priorities for problem gambling-related research, focusing on the following areas: better identification of people in the health, social welfare and justice systems who have gambling problems through improved screening of clients better understanding the nature and extent of harms suffered by problem gamblers and their families through targeted studies of problem gamblers evaluating the effectiveness of measures designed to reduce harms from problem gambling, including treatment programs and regulatory measures