The Australian Government is struggling to find a legislative solution to problem gambling that is both politically acceptable and socially responsible. Although a big majority of Australians support  regulation, the government is faced with a highly funded campaign by the gambling industry targeting Labor marginal seats.

Gambling organisations, and particularly the poker machine vendors, claim the legislation is too cumbersome to be administered and that their resultant losses would shut down many community sporting clubs and community facilities if imposed on them.

Under huge backbench pressure, the Gillard government has already backed off on an agreement with Tasmanian independent member Andrew Wilkie who jointly holds the balance of power in the House of Representatives.

Mr Wilkie’s support for the Gillard Government was dependent upon an agreed limit to be imposed on problem gamblers and the rate of expenditure slowed down so that families were not left starving or facing eviction because of excessive addictive gambling.

Here is a possible solution. All business as well as the gambling industry have being pushing for less regulation and want that legislation to be modified by agreement to make it more workable for their particular business rather than one size fits all regardless of their size or what unique circumstances effect their business.

This is how it could work for the gambling industry. Given that 40% of revenue comes from addicted problem gamblers, the government fixes a 40% tax on all revenue from gaming machines. The vendors are then required to impose rules on gamblers to significantly reduce or ameliorate problem gambling in their particular venue.

This solution can be registered with the government and if the vendor provides proof that their rules are effective, the rules can be put before parliament as subsidiary legislation. If the vendor rules are approved by parliament the vendor gets a reduction in their tax rate.

The subsidiary legislation is to be reversible if the rules are seriously breached, or shown to be not effective. Other vendors can adopt these rules, or register their own rules if they do not suit their business. For instance, rules that work for community centres may not work for a big casino.

The beauty of this method is that it makes the vendors responsible for finding their own solutions otherwise they are hit with a large tax bill. The government role is simply policing the venues to make sure the rules are being properly applied. No more heavy hand of government and a strong incentive for the industry to act responsibly. Most importantly the taxpayers are not picking up the bill for destitute families who are victims of gambling, it is the industry cleaning up its own mess.