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The South ×îÐÂÌÇÐÄVlogn Centre for Economic Studies today released its latest gambling database which provides regional data on electronic gaming machine (EGM) activity in hotels and clubs in South ×îÐÂÌÇÐÄVlog.

The database, which is made available in an easy to use excel format, has been updated to include 2018/19 financial year data sourced from Consumer and Business Services.

EGM activity at the state level has been dormant
At a statewide level EGM activity was relatively stable in 2018/19. Total net gambling revenue, or player expenditure, fell by just 0.1 per cent to $681.6 million. Meanwhile, average expenditure per adult fell by 0.9 per cent to $496 in 2018/19 – its lowest level since 2000/01.

A range of factors have contributed to the general sluggishness in EGM expenditure. These would include weak wages growth, an uptick in unemployment, subdued consumer confidence, the cap on gaming machine numbers and associated measures to reduce the number of gaming machines in hotels and clubs, the mature nature of the EGM product, and competition from others forms of entertainment. Cost of living issues associated with large price rises for necessities such as utilities and the emergence of small bars without gaming facilities may also have played a role in depressing gaming machine expenditure.

Reflecting the mature nature of the market and regulatory restrictions on gaming machines, there was little change in overall venue and gaming machine availability in 2018/19. There was only one less venue operating at 30 June 2019 (498 venues) compared to a year earlier, while the number of gaming machines at 30 June 2019 (12,130 machines) was only 12 fewer (-0.1 per cent) than a year earlier.

Aggregate expenditure higher in outer northern suburbs Ìý
Gaming machine activity as measured by aggregate expenditure remains greatest in the outer northern, and to a lesser degree, outer southern suburbs. The largest regions in terms of expenditure in 2018/19 were Port Adelaide Enfield ($72.5 million), Salisbury ($66.5 million), Onkaparinga ($59.2 million), Charles Sturt ($58.5 million) and Campbelltown and Tea Tree Gully ($43.9 million). The high degree of EGM expenditure in these regions is a due to the large aggregate resident populations in these regions and the predominance of gaming machines.

However, there is not always a close relationship between the aggregate number of gaming machines and expenditure. For example, although the City of Adelaide had the second largest number of EGMs at the end of 2018/19 (790 machines), it was only the tenth largest region in terms of expenditure ($22.0 million). Similarly, while Prospect and Walkerville was only the 26th largest region (out of 44 regions) in terms EGMs, it was the 13th largest in terms of expenditure.

Port Augusta now has the highest level of relative expenditure
Port Augusta has displaced the City of Adelaide as the region with the highest level of relative gaming machine expenditure in South ×îÐÂÌÇÐÄVlog ($992 per adult compared to $940 per adult in 2018/19). In fact, the City of Adelaide has now fallen back to third place behind Norwood Payneham St Peters ($979 per adult) in terms of relative expenditure.

These ranking changes have been driven by a large decline in relative spending in the City of Adelaide rather than stronger growth in the other regions (relative expenditure actually fell in both Port Augusta and Norwood Payneham St Peters). Average expenditure per adult for the City of Adelaide fell by $85 to $940 per adult in 2018/19. This decline was driven by a significant fall in total gaming machine expenditure (down $1.4 million or 6.1 per cent) and a strong rise in population (up 2.6 per cent). The latter is revealing as it highlights that population growth is not a magic solution to driving growth within particular industries – one needs to offer a product that is appealing to the incoming cohort (e.g. overseas students) in order to exploit the opportunities offered by population growth.

Other regions with high relative gaming machine expenditure in 2018/19 included Whyalla ($858 per adult), Port Lincoln ($743 per adult), Gawler ($734 per adult), Port Adelaide Enfield ($715 per adult) and Berri and Barmera ($708 per adult).

Turning to the other end of the spectrum, regions with the lowest levels of relative expenditure include Goyder and Northern Areas ($103 per adult), the Adelaide Hills ($118), Mitcham and Burnside ($154) and Wakefield ($155). A common feature of these regions is that they have a relative low incidence of gaming machines, which means opportunities for gambling within these regions are less common. For example, Mitcham and Burnside had an average of just 2.4 machines per 1,000 adults at 30 June 2019, which was the lowest of any region.

Expenditure falls in rural and regional areas
While gaming expenditure for the state as a whole was flat in 2018/19, there were some regional variations in performance with expenditure falling in rural and regional areas while holding steady in the metropolitan area. Total EGM expenditure for regions in rural and regional areas fell by $2.3 million (-1.5 per cent) to $149 million, while expenditure for metropolitan regions rose by $1.7 million (0.3 per cent) to almost $533 million. These results suggest that economic conditions have been relatively soft in rural and regional areas.

Naturally there were significant variations in performance within these two broad groups in 2018/19. For example, within metropolitan regions there were large proportional increases in total gaming machine expenditure for Playford (up 4.6 per cent), Prospect and Walkerville (up 4.6 per cent) and Unley (up 3.0 per cent), while there were relatively large declines for the City of Adelaide (down 6.1 per cent), Adelaide Hills (down 2.4 per cent) and Marion (down 1.3 per cent). Meanwhile, for regions in rural and regional areas there were relatively large increases in expenditure for the region comprising Mount Remarkable, Orroroo/Carrieton and Peterborough (up 4.8 per cent), as well as Clare and Gilbert Valleys (up 4.6 per cent) and The Coorong and Tatiara (up 4.0 per cent), whereas there were quite large declines for Wakefield (down 15 per cent), Light and Mallala (down 12 per cent) and Mid Murray (down 7.3 per cent).