The ins and outs of cashless gambling

By Luke Duffy

Cashless gambling refers to gambling without notes or coins on land-based products like pokies. This option is available, in different forms, in all Australian states and territories.

Since 2019, Victoria has allowed two types of cashless gambling – card-based cashless gambling (CBC) and Ticket-In Ticket-Out (TITO). CBC involves the use of a card, linked to an account or digital wallet, to transfer credits to and from a gaming machine. TITO involves receiving a ticket as a payout instead of cash. The ticket can either be inserted into another machine to continue gambling or exchanged for the equivalent cash amount. TITO is now operational in Victoria and is offered by most gaming machine venues.

… mandatory cashless systems are proposed for casinos in Victoria, WA and Queensland.

Following recommendations from various royal commissions and inquiries, mandatory cashless systems are proposed for casinos in Victoria, WA and Queensland. The Tasmanian and NSW governments have gone further, announcing plans to implement mandatory cashless gambling not just at casinos, but all gaming machine venues.

Mandatory cashless gambling, which links an account to a customer’s personal ID, is primarily an anti-money laundering measure designed to prevent large amounts of untraceable cash being put into machines and then cashed out as ‘legitimate’ winnings.

Impact on gambling behaviour

In 2020, the Foundation commissioned Sarah Hare, director of Schottler Consulting, to conduct a review of the evidence relating to the effects of cashless gambling on behaviour.

The limited evidence available suggests that customers may find cashless gambling convenient because it does not require interaction with venue staff, and small amounts of money can be transferred easily to and from machines. Some, but not all, customers have reported that the tracking features of carded play assist them to manage their money.

… ‘pain of payment’ … is thought to assist in regulating spending.

Hare also examined relevant findings from other academic fields. Potentially concerning evidence came from consumer behaviour and cognitive psychology literature. Cashless payments are consistently found to be associated with increased consumer spending because they don’t involve the same ‘pain of payment’ as parting with cash. This ‘pain’ is thought to assist in regulating spending.

Cashless gambling and pre-commitment systems

While these findings suggest that cashless gambling could lead to greater gambling expenditure, and therefore harm, any harm minimisation tools implemented alongside a system are also likely to have an effect.

A central recommendation of the Productivity Commission’s 2010 inquiry into gambling was the use of pre-commitment technology that allows people to set limits on the time and money they spend gambling. These systems fit neatly with cashless gambling cards/digital accounts and can effectively neutralise a person’s impulse to spend more than intended.

Pre-commitment systems come in a variety of forms. The main differences are whether or not a system is universal – meaning all gamblers are required to use it – and whether limits are binding or can be overridden by the customer after they have been reached.

A universal system with binding limits is considered the gold standard for reducing harm.

Universal systems have other advantages, including that there is no stigma around use when everyone must comply; people have access to complete records of their spending; and self-exclusion from gambling venues can be more effectively managed.

A universal system with binding limits is considered the gold standard for reducing harm.

Tasmania is set to become the first Australian state to implement cashless gambling with universal pre-commitment in 2024. The scheme will have default limits of $100 a day, $500 a month, and $5,000 a year. Daily limits can be increased to $500 and monthly limits to $5,000, but a hard annual limit of $5,000 will remain, unless gamblers prove they can afford to spend more.

The NSW Government is also planning to implement mandatory cashless gambling tied to universal pre-commitment by late 2028. While the scheme is expected to include spending limits, these have yet to be announced.

Following the 2021 Royal Commission into the Casino Operator and Licence (Crown), Victoria introduced laws restricting cash-based gambling at the venue to $1,000 per 24 hours and mandating pre-commitment with binding limits for its poker machines by December 2025.

Specific design features

The design features of cashless and pre-commitment systems are likely to influence their effectiveness in reducing gambling-related harm.

Based on the findings of card-based pre-commitment trials, Hare said such features included the maximum card balance and transfer limits; the ease of transferring money to cards; and the accessibility, format and content of balance and activity statements.

… a significant step towards giving people greater control over their gambling.

Maximum spending limits such as those announced in Tasmania are also likely to be important. Users of Victoria’s YourPlay system – which does not impose an effective cap – tended to place limits that were unlikely to reduce the risk of harm, setting a median daily limit of $50,000.

The finer details of cashless gambling and pre-commitment schemes will continue to be developed and refined as proposed systems are rolled out and new jurisdictions adopt the measures. While not a silver bullet for reducing harm, the move towards such systems is a significant step towards giving people greater control over their gambling.