By Sean Nicholls
A landmark report into the harm caused by gambling in NSW has recommended banning a controversial feature of poker machines known as "losses disguised as wins", blamed by experts for fuelling addiction.
The state government has been sitting on the report and its recommendations for two years, including while James Packer's Crown and poker machine giant Aristocrat fight a court challenge in which it is alleged the feature is "misleading and deceptive".
Racing minister Paul Toole now says it will consider the recommendation as part of a broader review of prohibited features on poker machines in NSW.
The report, by the University of Sydney gambling treatment clinic, was commissioned in 2013 by the Office of Liquor, Gaming and Racing and delivered to the government in 2015.
The NSW government has released a long awaited report on gambling harmCredit: AFR
Losses disguised as wins refers to a poker machine feature where music and celebratory graphics are played when a player wins an amount, despite it being less than what was gambled.
The report uses the example of a player betting $1 and being returned 25c. "This loss is presented to the player as if they have won 25c, when indeed they have lost 75c," it notes.
"Flashing lights and symbols, and jubilant audio tunes often accompany gaming machine wins," it says.
"This audibly notifies the player that they have won, and as such acts as a cue for winning, and the monetary reinforcement that follows.
"Losses disguised as wins" was a key feature of a case against Crown and Aristrocrat, launched by former poker machine addict Shonica Guy.Credit: Joe Armao
"Similarly, when a player wins back a portion of their initial wager (a net loss), the same sensory features are activated. These 'losses disguised as wins' are, as the name suggests, often mistakenly perceived by the player to be wins."
The report notes that the NSW Independent Liquor and Gaming Authority maintains a register of prohibited poker machine features that are "likely to cause harm to the user" but losses disguised as wins is not among them.
"We recommend positive alerts to players, in reference to 'losses disguised as wins', where the return is less than the amount wagered, be added to the Gaming Machine Prohibited Features Register, on all future gaming machines," it says.
In the Federal Court case, Crown and Aristocrat are defending allegations that a poker machine called Dolphin Treasure is misleading, deceptive and in breach of consumer law.
Crown has 38 Dolphin Treasure machines in its Melbourne casino.
Crown and Aristocrat have attacked the claims as "fanciful". Judgment is due within months.
The case was launched by former poker machine addict Shonica Guy, represented by law firm Maurice Blackburn.
Monash university gambling researcher Charles Livingstone said the "losses disguised as wins" feature – banned in Queensland and Tasmania - is common to most poker machines elsewhere in Australia.
He said it was "a key feature of the case against Crown and Aristocrat".
"There is now overwhelming evidence that losses disguised as wins are a key contributor to gambling addiction," he said.
In its response to the report, the NSW government says the recommendation is "noted".
It says the government will "undertake a review" of the prohibited features register to align it with the new principles-based Gaming Machine National Standard and consider the development of a national approach to prohibited features and gambling harm minimisation."
"The government will work with industry, the wider community and other jurisdictions to move to a consistent national model for determining which specific gaming machine features present an unreasonable risk of harm to players," it says.
"The issue of 'losses disguised as wins' will be considered as part of the review."
The report also recommends extending advertising restrictions to "all risky gambling products" and banning gambling companies from offering "all types of inducements to new or existing customers in NSW".
Mr Toole has also announced that the government will conduct "a major new study into the prevalence of problem gambling as well as harms caused by excessive gambling".
"Both these studies will help us better understand gambling-related problems and ensure we have the most effective measures to address them," he said.