Surging pokies revenue proves NSW Labor has failed to reduce gambling harm as promised, advocates say

Anti-gambling advocates say surging tax revenue from poker machines in New South Wales is a betrayal of the Minns government’s promise to reform the industry.

Tuesday’s state budget forecasts the annual revenue from all gambling taxes will rise from $3.8bn in 2025-26 to $4.7bn by 2029-30. That includes an annual rise in revenue from poker machines in pubs and hotels of 7.5%, outstripping inflation, meaning the government expects to pocket $2.2bn from pokies in 2029-30 compared with $1.6bn this financial year.

The NSW treasurer, Daniel Mookhey, told reporters on Wednesday that Treasury had not modelled the effect of any gambling reform on future tax revenues. But he denied that meant there would be no further changes to curb gambling.

“The process by which we construct modelling for a budget does reflect policy settings at the time,” Mookhey said.

Speaking inside the budget lockup on Tuesday, the treasurer said while there was “legitimate” disagreement on the appropriate level of gambling, it was Treasury’s job to “call the numbers as we see them”. Compared to the current annual revenue, the state government will pocket more than $2.2bn extra in gambling taxes over the forward estimates, before adjusting for inflation.

The chief advocate for the Alliance for Gambling Reform, Rev Tim Costello, said Tuesday’s figures showed “Labor has a gambling problem”.

“This is a terrible fail by the Minns government and a breach of trust,” he said.

Progress on gambling reform in the state has stalled after the premier, Chris Minns, promised before the 2023 election that he would reduce the number of poker machines and implement a cashless gaming trial, as he sought to match an anti-gambling push by former premier Dominic Perrottet.

After a 2024 trial, Labor has not committed to implementing cashless gaming cards which were a harm reduction and anti-money laundering recommendation by the state’s crime commission.

The government has not yet responded to 30 recommendations made by the Independent Panel for Gaming reform in November 2024, including a statewide “centralised account-based gaming system”.

Analysis by the Wesley Mission shows gamblers are on track to lose more than $10bn to poker machines in 2026.

The state government has continued to benefit from poker machine profits, in particular from pubs and hotels. While the annual growth rate for profits in registered clubs is at about 4%, Treasury forecasts predict profits in pubs and hotels – despite being limited to 30 machines per venue – will increase by 8% a year until 2027-28.

The Wesley Mission chief executive, Stu Cameron, said that since poker machines were first allowed in hotels and pubs in 1997 by then Labor premier Bob Carr “they’ve been perfecting what is a profit-driven model”.

“These pubs have become clinical and hyper-efficient in squeezing every dollar they can out of the machines they have on their floor,” Cameron said.

Unlike hotel poker machines, those in clubs are subject to a tax concession which is forecast to cost the NSW government more than $1bn in the current financial year.

The Greens gambling harm reduction spokesperson, Cate Faehrmann, said the state continued to give “millions in tax handouts to wealthy clubs … all while people are losing homes and families are falling apart as a result of pokies addiction”.

“The Minns government has thrown any good intention, however small, that they may have had to reduce the extent and level of harm from gambling in NSW out the window.”

The almost 90,000 poker machines in the state – accounting for about half of those nationwide – will be a point of contention at the NSW Labor conference next weekend, when the Labor left will bring a motion with cross-factional support to commit the party to cut at least 45,000 machines over 10 years.

In question time on Tuesday, Minns defended the government’s record on gambling reform, including lowering a statewide limit on machines from 99,000 to 95,739, the revocation of 670 “outdated” exemptions to a mandatory gaming machine shutdown between 4am and 10am, and a reduction of the cash input limit for new machines from $5,000 to $500 from 1 July.

“I just do not think it is reasonable to say that the government has done nothing,” he said.

Asked on Wednesday about further potential reforms, a government spokesperson said: “We are closely considering the complexities and costs associated with gaming reform in an industry that supports more than 150,000 workers in NSW, while also ensuring the latest technology works with the reform process.”