Association between density of gaming venues in a geographical area and prevalence of insolvency: longitudinal evidence from Australia

Abstract

Background and aims: Problem gambling can lead to a myriad of harmful consequences, including unmanageable amounts of debt and serious financial problems. The aim of this study was to examine whether changes in the number of electronic gaming machine (EGM) venues within a local area (due to venue openings and closings) are associated with changes in the rates of serious financial problems.

Design: Area-level longitudinal multivariate regressions controlling for possible confounders (fixed and time-varying local area characteristics).

Setting: Australia's three largest states (New South Wales, Victoria, Queensland), during the period 2011-18.

Participants: A total of 225 local areas (Statistical Area 3 level) within the three states.

Measurements: Serious financial problems were measured by administrative data on total number of personal insolvencies (bankruptcies, debt agreements and insolvency agreements) in each local area per annum. The number of EGM venues in each local area was the regressor of primary interest. Area-level covariates included the number of non-gaming pubs and clubs, unemployment rate, population count, local area dummies, local area linear time trends and a separate set of state dummies for each year.

Findings: A one-venue decrease over time within a local area decreased the number of personal insolvencies by 1.8 per year [95% confidence interval (CI) = 0.4-3.2]. The result is robust to alternative specifications, including allowing for geographical spillovers (β = 2.2, 95% CI = 0.7-3.7), temporal lagged effects (β = 1.6, 95% CI = 0.6-2.8) and the spatial variability of venues within areas (β = 2.7, 95% CI = 0.9-4.5).

Conclusions: There is a positive association between the number of gaming venues in a local geographic area and the number of personal insolvencies in that area. Reducing the number or accessibility of gaming venues could help to reduce financial harms associated with problem gambling.

Keywords: bankruptcy; electronic gaming machines; financial harm; gambling.