The Elwick Hotel is a double-storey Edwardian establishment amid a block of mostly nondescript late-20th century shops in Glenorchy in Hobart’s traditionally working-class north.

Built in 1904, it used to offer accommodation for punters headed for a bet and a day out at the nearby Elwick racecourse, home to the Hobart Cup. Since the 1990s, the Elwick has been radically transformed and now is most well-known for a different kind of gambling experience.



The hotel rooms are long gone, there is no kitchen and the front bar shuts by 10pm on a Saturday, earlier most other nights. The bulk of its floorspace is given over to a gaming room, which hosts 30 poker machines. It is open 8am to 4am, seven days a week.



On a recent Saturday night, over the course of an hour, Guardian Australia saw three people at the Elwick’s front bar and 17 playing the hotel’s 30 poker machines. With one exception, those in the gaming room arrived and sat alone, mostly with an unused machine between each player. There was no chatter; the brief conversations witnessed were between bar staff and the handful of patrons who bought a drink. The punters may have been enjoying themselves but, if so, there was no outward expression of it.



This is, of course, an anecdotal and unscientific observation, based on just one hour out of the 140 the venue is open each week. Maybe it is different at other times. What isn’t subjective is that, from the owners’ perspective, the Elwick is easily Tasmania’s most lucrative pokies pub – what independent federal MP and anti-pokies campaigner Andrew Wilkie calls “ground zero for poker machines” in the state.



According to unreleased government data leaked to Wilkie, gamblers lost nearly $4.5m on the Elwick’s gaming machines in 2015-16 – an average of more than $400 per machine per day. Average household income in Glenorchy is less than $1,100 a week.



The Elwick is owned by Vantage Hotels, a subsidiary of the Sydney-owned Federal Group that has held the exclusive rights to poker machines in Tasmania since they were introduced. During the recent state election campaign, when Labor broke the long-held bipartisan support for poker machines by pledging to force their removal from pubs and clubs by 2023, the hotel carried a banner that read “Save Our Jobs, Vote Liberal”.



While the canvas banner would have been cheap, the campaign it was part of – an industry-funded advertising and billboard push across Tasmania – was not. The extent to which the campaign influenced the election result is impossible to know – an improved economy and concerns about a Greens-backed Labor minority government were also central to the Liberals’ win – but analysts say the scale of the spending was unprecedented. Few argue the flood of pro-Liberal and anti-Labor advertising was not a significant factor.



Charles Livingstone, senior lecturer at Monash University’s School of Public Health and Preventive Medicine, says: “They wouldn’t do it if it didn’t work.”

They wouldn’t do it if it didn’t work Charles Livingstone on the pokies industry campaign in Tasmania

A similar fight is playing out in the South Australian election, though on different terrain. Former senator Nick Xenophon, now leading the centrist SA Best party, has dropped his call for an outright ban in favour of tighter regulation, including a one-third reduction in gaming machines over five years, cutting maximum bets from $5 to $1, and banning political donations from gambling interests.



It has sparked a forceful campaign from the Australian Hotels Association, which says he is putting 26,000 jobs at risk. The attack mirrors the Tasmanian Hospitality Association’s claim that Labor and the Greens were putting 5,000 jobs at risk, when a government-sponsored report found only 317 directly linked to pokies in pubs and clubs. Coincidentally or otherwise, a recent poll suggests support for Xenophon has dipped.



Among anti-pokies campaigners, the bruising Tasmanian and SA experience has heightened debate over whether arguing for better regulation is an effective way to bring about change. It has also fortified a view that Australia’s gambling industry – cashed up and politically influential – is the local equivalent of the American National Rifle Association (NRA).



Tim Costello, spokesman for the Alliance for Gambling Reform, says there are several similarities. He says firearms in the US and pokies in Australia have a foothold in their communities not replicated elsewhere.



Just as Americans own more guns than comparable countries, Australia has the most poker machines per person of any country excluding gambling holidays spots such as Macau and Monaco. In 2015, there was one gaming machine for every 114 Australians. The country is also the undisputed champion of gambling losses, forfeiting 40% more per head than second-placed Singapore.

Costello says both the NRA and the Australian gaming industry thrive due to political capture, developing such close links with the political class that they can resist attempts at reform.

‘Ground zero for poker machines’: The Elwick hotel in Glenorchy in Tasmania. Photograph: Adam Morton/The Guardian

In the Tasmanian election, the Liberal government had indicated it would hold a tender for the pokies licence after 2023 – an approach that would have delivered the state hundreds of millions of dollars in revenue – but late last year announced it would instead give licences directly to the pubs and clubs who already house them. Its policy was nearly identical to that proposed by Federal Group and the Tasmanian Hospitality Association, which strongly backed the Liberals’ re-election campaign.

The gold standard example often cited is the then prime minister Julia Gillard’s broken deal with Wilkie to introduce gaming reform after the 2010 election. Gillard’s promise to introduce mandatory pre-commitment technology, requiring gamblers to place a binding limit on how much they could lose, was delayed and watered down following unhappiness over the policy among some Labor MPs and Kevin Rudd signalling he might dump the policy if restored to the party leadership. Gillard was so compelled to drop the policy she offered the speakership to the disaffected Liberal Peter Slipper – a decision she came to regret when Slipper was forced to resign in a matter of months – to ensure her minority government could survive without Wilkie’s support.



Costello says the policy change in 2012 was a clear result of the industry targeting Labor-held NSW marginal seats, including putting up anti-ALP billboards and holding public rallies. “Labor backbenchers marched into Gillard’s office under pressure from pubs and clubs and said, ‘Tear up the deal or we’re going to vote for Rudd’,” he says.



The successful gaming industry campaign followed two senior ClubsNSW executives travelling to Washington DC to take a course on how to use a large membership base to force political outcomes. Speakers included Glen Caroline, the director of the NRA grassroots programs and campaign field operations.



Livingstone says the gaming industry has learned over time how to use its money to win influence. “My sense is they have a carrot and stick approach. The carrot is the money and the influence, and the stick is the marginal seats campaign,” he says. “They give the money to both parties and spread it through branches and keep a large number of members from both sides on the payroll. It gives them a voice inside and allows them to get intelligence from inside.”



ClubsNSW dismisses the NRA comparison and describes the Alliance for Gambling Reform as prohibitionists “who somehow have built a profile on a confected crisis and out of demonising poker machines”.



In response to Costello’s criticism, a ClubsNSW spokesman says: “Tim Costello is a classic fire-and-brimstone temperance man. He is a prohibitionist … thank goodness most Australians aren’t.”



If polls are believed, most Australians do not like poker machines. An overwhelming majority say they would like to see them removed or reduced, but few feel so strongly that it would influence how they would vote ahead of primary areas of concern such as jobs, health and education.



The evidence of the damage caused by gaming machines was laid out by the Productivity Commission in 2010. In its report to the federal government, it found the risk of addiction was higher with pokies than other forms of gambling. About 4% of Australian adults played pokies at least once a week, and about 15% of those – just short of 100,000 people across the country – were problem gamblers who between them shared about 40% of all losses. It estimated the social cost of gambling in Australia was $4.7bn a year and called for targeted policies to reduce it. A recent study commissioned by the Victorian Responsible Gambling Foundation went further, putting the social cost at $6.7bn in that state alone.



The Productivity Commission recommended limiting the amount of cash that can be fed into a machine at one time from up to $10,000 to $20, lowering the amount that can be bet per button push to $1, introducing pre-commitment systems and reducing gaming room opening hours.

Tim Costello is a classic fire-and-brimstone temperance man ClubsNSW

In the wake of Gillard’s backdown, none of these recommendations have been broadly adopted. But Livingstone says he senses a shift in sentiment.

He lists recent examples: AFL leaders including commission chairman Richard Goyder and Collingwood president Eddie McGuire saying they wants clubs to move away from relying on pokies revenue; regulators in Victoria factoring in the social cost of gambling and its link with domestic violence when considering applications; authorities blocking the introduction of gaming machines in greenfield sites in Victoria and South Australia; Woolworths chairman Gordon Cairns opening up the possibility the company could divest from pokies pubs in the wake of accusations its venues have used personal information to encourage gambling.

“It shows business leaders and regulators are starting to change the way they see these things,” Livingstone says.



He says the exception remains NSW, home to half of Australia’s poker machines. The gaming industry is embedded at sporting and community clubs across NSW in a way it is not in other states; they have relied on pokies revenue for decades and have deep roots within the community. The NSW government last week announced changes to gambling laws that it said would cap the number of machines in high-risk areas but critics say this is misleading – that the proposed legislation would allow new pokies venues to be built in suburban pockets where there are currently none, and give clubs the power to lease and move pokies to sites that draw the highest revenue, many of which are in relatively disadvantaged areas.

Livingstone says it is a deeply cynical policy. “NSW is entirely captured by the gambling industry and has been for many years. But even in NSW they are starting to feel the need to pretend they are acting to protect poor communities. There is no evidence they do – they couldn’t give a tinker’s cuss, it’s a gross masquerade – but that is what they are trying to say.”

According to unreleased government data leaked to Andrew Wilkie, gamblers lost nearly $4.5m on the Elwick’s gaming machines in 2015-16. Photograph: Lukas Coch/AAP

In the face of this, some anti-pokies activists including Livingstone are abandoning the long-held push for improved regulation and instead lobbying for an outright ban on poker machines outside casinos. While they have not been publicly critical, many were disappointed by Xenophon’s shift to backing harm minimisation over complete removal.



From a ‘small l’ liberal perspective, a complete ban is a denial of freedom of choice. The overwhelming majority of people can use pokies without becoming addicted and pokies should not be compared to guns because, no matter how harmful they are, they will never be as lethal.

From a campaigner’s perspective, the argument in favour of improving regulation over removing machines is, in part, that the latter would be legislatively and bureaucratically complex. Tasmania was a one-off – its sole pokies licence was up for renewal after 20 years and it could be discontinued without the need for legislation. In other jurisdictions, governments have a range of contracts of different lengths with different licensees. Breaking them would be politically difficult and likely involve a hefty compensation bill.

But some of those running poker machine reform campaigns are increasingly persuaded that regulatory changes won’t work. They say the gaming industry is powerful enough to block or shape them. Rohan Wenn, of the campaign group Bad Bets Australia, says a ban is cleaner, easier to understand and has widespread community support.



“If you give the industry any wriggle room, they will wriggle like crazy,” he says. “You have to just say ‘it’s a dangerous product and we don’t want it in the suburbs’.”



While Federal Group did not respond to an interview request, ClubsNSW says the Liberals’ emphatic victory in Tasmanian election shows the electorate had rejected this argument. “Voters obviously felt that Rebecca White had her priorities all wrong,” a spokesman says. “We don’t think that there is a chance of her colleagues on the mainland making the same mistake.”



Though described by ClubsNSW as a prohibitionist, Costello is among those who believe harm can be minimised through regulation. He hopes that, though it looks like a loss now, the Tasmanian campaign may ultimately be seen as a tipping point in public debate.

“I think the dirty little secret – the spending, the exerting the muscle to influence a result – is out,” he says. “That’s the other analogy to the NRA. What was invisible in terms of political capture is now visible.”

