Tasmania's pokies addiction: the state most dependent on gambling revenue

The state that can't quit

If you wanted to design a gambling policy that maximised harm while minimising accountability, you'd be hard pressed to improve on Tasmania's current arrangement. The island state has the highest poker machine density per capita of any Australian state, a near-monopoly licensing structure that funnels profits to a single company, and a government that has spent decades treating gambling revenue as too important to seriously reform.

This isn't a story about personal choices or individual vice. It's a story about policy - who designed it, who benefits from it, and why it keeps surviving despite overwhelming evidence of harm.

The numbers you need to know

Let's start with the basics:

• Tasmania has approximately 2,800 poker machines across the state, serving a population of just over 570,000 people
• Tasmanians lose roughly $200 million per year on poker machines - around $350 per adult annually
• The Federal Group, a private Tasmanian company, held an exclusive licence to operate all poker machines in the state's pubs, clubs and casinos for decades under an arrangement critics called one of the most generous gambling monopolies in the world
• That licence, originally due to expire in 2023, was extended and renegotiated under both Labor and Liberal governments with minimal public consultation

The Federal Group arrangement meant that unlike most Australian states - where poker machines are spread across registered clubs that return profits to the community - Tasmania's gambling losses flowed almost entirely to a single private company with deep political connections.

Why this policy exists (follow the money)

The honest answer is that Tasmania's pokies policy exists because it works very well - for a small number of powerful interests.

For the Federal Group, the exclusive licensing arrangement delivered reliable, enormous profits with limited competition. The company has donated to both major Tasmanian parties over the years and employs significant numbers of Tasmanians in its hospitality and casino operations - giving it genuine economic leverage in a small state with few large employers.

For the government, gambling taxes and licensing fees represent revenue that arrives without requiring politically difficult decisions like raising income taxes or cutting services. Tasmania's government has historically received tens of millions annually in gambling taxes. When you're running a small state budget with limited revenue options, that income is genuinely hard to walk away from.

For both major parties, the Federal Group and broader hospitality industry represent donors, employers, and lobbyists with outsized influence relative to Tasmania's small political ecosystem. A state parliament where a handful of seats determines government is a parliament where well-resourced industries can exert enormous pressure.

Who pays the price

The costs of this arrangement are not shared equally. Problem gambling disproportionately affects:

• Lower-income households, who spend a higher proportion of income on poker machines
• Regional and outer-suburban communities, where poker machine density is often highest
• Families of problem gamblers, who bear financial and emotional consequences they didn't choose

The Australian Productivity Commission has estimated that problem gamblers account for around 40% of total poker machine revenue nationally - meaning the industry's profits are structurally dependent on a minority of users who are, by definition, unable to gamble in a controlled way. Tasmania's concentrated monopoly model has done little to change this dynamic.

Tasmania has among the lowest rates of gambling harm support funding relative to gambling revenue collected of any Australian state. The money flows in; the services don't follow.

What reform has looked like - and why it's stalled

In 2021, the Tasmanian government announced it would allow pokies to move into smaller venues from 2023 as part of a new licensing framework - a move critics argued would increase accessibility and harm rather than reduce it. The Greens and community health advocates pushed back hard. The details of what replaced the Federal Group monopoly remain contested and complex.

Meanwhile, cashless gambling cards - which would allow players to set hard limits on their losses - have been proposed, trialled, and debated at the federal level for years. The previous Morrison government resisted a mandatory national scheme. The Albanese government has moved more cautiously than advocates hoped. In both cases, industry lobbying has been a significant factor in slowing reform.

A mandatory pre-commitment scheme or loss limits on poker machines enjoys strong majority support in public polling - consistently above 60-70% in most surveys. The policy is popular. It just doesn't happen.

This is exactly what direct democracy is for

Here's the pattern that should bother every Australian voter: a policy that causes measurable, documented harm; that is deeply unpopular with the public; that serves a small number of well-connected interests; and that survives government after government regardless of which major party holds power.

This is not a failure of information. Tasmanians know pokies cause harm. It is a failure of political structure - a system where the people who fund campaigns and employ lobbyists have more influence over policy than the people who actually vote.

At Direct Democracy, our model is straightforward: members vote directly on policy, and elected representatives follow those instructions. No donor gets a private meeting that changes an outcome. No lobbyist shapes a decision behind closed doors. If Australians want mandatory loss limits on poker machines, that position gets taken into parliament and voted on - not quietly shelved after a breakfast with an industry association.

On gambling policy, the evidence is clear. The public knows what they want. The question is whether we have a political system capable of delivering it.

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