Like horses, computers get viruses. Imagine, then, if something akin to what has happened to the horses happened, not to computers, but to poker machines.
Now, I know that as poker machines are not connected in the way computers are they cannot get viruses. But it is an interesting hypothetical.
What if clubs had to “shut down” their poker-machine rooms, preventing patrons from using them? Would there be such a clamour as has happened with the equine flu? Would there be talk of “an industry” making “losses”?
I suspect not.
Many people would say good riddance, including people who are addicted to the machines and lose money on them.
The equine flu, in a way, can put our ideas of “industry”, “economics”, “benefits” and happiness to the test.
These “industries”, and lotteries and other gambling, have to be financed by someone. Someone has to pay for them. Australians lose almost $20 billion a year in gambling – about $1000 per person per year. Of that 75 per cent is lost on poker machines and only 10 per cent on racing.
Money is taken from one pot – punters’ pockets – and put into another pot – the pockets of bookies, poker-machine and horse owners, people who service the machines and horses and people and the tax office.
For a long time poker machines were banned as was gambling off the racecourse. They were not regarded as “industries” but evils. Now they are heavily regulated. In constitutional law they, and lotteries, are generally exempt from requirements for free interstate trade. They are generally exempt from deregulating competition policy.
Having drawn some similarities between poker machines and horseracing, it is worth looking at the differences.
Poker machines are far more efficient than horse racing in providing an “event” against which to gamble. The event – spinning wheels with an unpredictable outcome but with outcomes of precise probability — is easier to provide than doing the same thing with horses.
Maybe because of that poker machines are seen as more pernicious than horse racing. It is all gambling. There is no spectacle. Horse racing has a large element of human skill – in riding and training the horse – and an element of unpredictable horse performance. Because there is an element of skill and a great deal of elaborate effort in staging the event people are prepared to pay just to see it, whether they gamble or not – much as they would pay to see human athletes perform whether as individual or in teams.
I doubt whether horse racing would attract even a quarter of the people it does without the gambling, but there certainly is a spectacle.
Horse racing might be seen as somewhere between a football match and the poker machines. The former is nearly all spectacle and little gambling (it would happen without gambling). The latter is all gambling and virtually no spectacle.
All these activities, like all economic activity, are a result of people pursuing happiness. Whether they achieve it or not is another matter. Playing poker machines is in pursuit of happiness, however hopeless.
With this in mind, you have to consider whether equine flu has put an “industry” under threat of partial ruin and is deserving of help and sympathy, in the way, say, that the banana industry was helped after cyclone Larry. Or would you consider it like the poker-machine “industry” and richly undeserving because the happiness being pursued by its patrons is at best short-lived and almost certainly doomed to have the opposite effect?
Horse racing has been lucky because non-racing horses are affected. They have all sorts of non-gambling uses, so the resources of Government have been applied to contain the virus.
Another reason for government action arises. In the past 20 years or so governments have applied principles of user pays. Now, if a user pays, a user is entitled to get a result for the money. So when quarantine apparently fails, those affected feel they can put out their hand for compensation. When government services were generally free people had less of a case for compensation when they failed.
Giving sympathy and help to stricken banana growers is obvious. Helping a casino going broke or a poker-machine manufacturer in strife would raise eyebrows. Horse racing sits in the middle – not really an industry, but a tolerated activity which does not do much harm and does give the pleasure of the spectacle.
Government decisions on whether to help and in what way usually depend on politics rather than high moral or economic principle. The beneficiaries of equine flu – the punters who have not lost money to contribute to the “industry” – would probably lose their money another way and would not see themselves as beneficiaries. The losers, however, are concentrated and badly hurt – possible voter changers on this issue alone.
On the economic front, a conundrum arises. Economists like the pursuit of efficiency. The spinning wheels are much more efficient than horseflesh in provided a means of gaming. But this road to efficiency removes the romance and emotion of horses – the elements of moral respectability which make us and governments more responsive to appeals for help.
Perhaps it is the very inefficiency of horse racing’s gambling element that lets its participants get away with the label “industry.
The equine flu will provide a topic for many an economics research paper for years to come.