Billions Lost to Poker Machines as NSW Audit Slams Lack of Harm Reduction Efforts

The New South Wales (NSW) government is failing short in its efforts to reduce harm caused by poker machines, a damning new report from the Auditor-General has found.

The “Regulation of gaming machines” report acknowledges that the government has a clear strategy and priorities, which it has communicated to stakeholders.

However, the report warns that there’s a lack of clear focus on reducing gambling harm. Furthermore, there are no measurable targets:

“The strategy does not have a sufficient focus on the areas that are considered high-risk for gambling harm and does not set any targets for reducing harm associated with gaming machines. Gaming machine losses and the social costs of gambling harm continue to be disproportionately concentrated in socio-economically disadvantaged communities.”

Major Findings and Government Shortfalls

As of June 2024, NSW is home to 87,749 machines, accounting for more than half of Australia’s total.

While the NSW government reduced the machine cap from 99,000 to 95,739 in December 2024, the current total is below that, allowing for thousands of additional machines.

Despite legislative intent to reduce the number of machines, the total has grown by 958 in the past two years. At the current rate of removing 598 machines per year, it will take NSW 55 years to reach the national average per capita.

In 2023-2024, the machines generated AU$ 8.4 billion ($5.5 billion) in profit. During that period, NSW collected AU$ 2.3 billion ($1.5 billion) in tax revenue.

The Auditor-General highlights several shortfalls of the NSW government:

• Regulation is consistent, but there is a lack of harm minimization strategies, such as benchmarks and targets in place to mitigate potential harm.
• There is no consistency in license condition reviews, resulting in many venues operating under outdated conditions.
• Despite the 2001 forfeiture scheme aimed at reducing the number of machines, the number is increasing.
• Gambling losses have increased for three straight years.
• Gambling helpline calls have increased by 8.5% between 2023 and 2024.
• Disproportionate concentration of losses in low-income and disadvantaged communities.

Recommendations for Reform

The report also outlines specific actions for two key government bodies.

By June 2026, the Department of Creative Industries, Tourism, Hospitality and Sport should:

• Increase its focus on harm minimization by setting clear baselines and targets to track progress, prioritizing enforcement of rules, and publicly evaluating and reporting the outcomes of its regulatory activities.
• Strengthen the gaming machine forfeiture scheme by reviewing and removing current exemptions that cannot be justified by evidence and prioritizing incentives for licensees to forfeit machines voluntarily.

Meanwhile, by June 2026, the Independent Liquor and Gaming Authority should:

• Conduct regular reviews of license conditions in high-risk locations and align them with current best practices in harm reduction.
• Increase clarity around its decision-making process on machine applications. Actions include publishing detailed statements on the reasons for its decisions. Also, providing clear explanations to those who have been denied a license.

Report Echoes Activist Charity’s Calls for Action

The Auditor-General’s report aligns with recent calls for stronger regulation by Wesley Mission, a charity advocating for gambling reform.

The charity’s recent study revealed that NSW gamblers have lost AU$ 2.17 billion ($1.41 billion) playing poker machines in the first 90 days of 2025. That represented a 5.7% yearly increase, equivalent to AU$ 1 million ($650,000) per hour, or AU$ 24 million ($15.6 million) per day.

Wesley Mission stressed that the highest losses are concentrated in Sydney’s western suburbs. It called for specific actions for the government to take to reduce losses:

• Mandatory machine shutdowns from midnight to 10 a.m.
• A tighter cap on the number of machines in high-risk areas.
• Introduction of a cashless gambling card with enforceable harm reduction limits.

The NSW government implemented a trial of cashless gambling cards in 2023 but did not decide whether to incorporate them.

Wesley Mission was also on the NSW government’s expert independent panel on gambling reform, which released recommendations in 2024. However, the NSW government has not yet responded to those recommendations.