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New South Wales is forecasting a sharp rise in gambling tax revenue over the next four years, a budget trajectory that has intensified criticism from gambling reform advocates who accuse the Minns government of retreating from promises made before the last state election.
Budget papers released this week show gambling taxes are expected to climb from $3.8 billion in 2025-26 to $4.7 billion by 2029-30. A significant share of that increase is tied to poker machines, with revenue from pokies in pubs and hotels projected to grow well beyond the pace of inflation.
Treasury estimates indicate the state will collect roughly $2.2 billion from hotel and pub poker machines by 2029-30. That compares with about $1.6 billion in the current financial year, suggesting government finances are becoming increasingly reliant on a sector that was once targeted for substantial reform.
Revenue Growth Outpaces Reform
The projections landed awkwardly for a government elected after campaigning on measures aimed at reducing gambling harm. Before the 2023 election, Premier Chris Minns pledged to reduce poker machine numbers and backed a trial of cashless gaming technology, positioning Labor alongside a broader push for reform that had also been championed by former Liberal premier Dominic Perrottet.
Yet two years later, many of the most significant proposals remain unresolved.
Treasurer Daniel Mookhey argued that budget forecasts simply reflect existing policy settings rather than future political decisions. Treasury, he said, had not attempted to estimate how potential reforms might affect gambling revenue over coming years. The budget process, he maintained, requires officials to base forecasts on the rules currently in place.
For opponents of the industry, that explanation offered little comfort.
Tim Costello, chief advocate for the Alliance for Gambling Reform, viewed the rising revenue forecasts as evidence that the government has drifted from its earlier commitments. In his assessment, the budget numbers reveal a state increasingly comfortable collecting money from gambling losses while delaying major changes recommended by regulators and experts.
Key Recommendations Left Waiting
One of the central unresolved issues remains cashless gaming. After a trial conducted in 2024, the government has stopped short of committing to a statewide rollout despite recommendations from the NSW Crime Commission, which argued the technology could help combat both gambling harm and money laundering.
Another report has also been left sitting on the government’s desk. More than six months after an independent gaming reform panel delivered 30 recommendations, including the creation of a statewide account-based gaming system, the government has yet to issue a formal response.
The delays have become a growing source of frustration for anti-gambling groups, which argue the state’s reform momentum has slowed considerably since the election campaign.
Billions Lost on the Machines
Meanwhile, losses continue to mount.
Research compiled by Wesley Mission suggests gamblers in New South Wales are on course to lose more than $10 billion on poker machines during 2026. The organisation argues that growth has been particularly pronounced in hotels and pubs, where operators have steadily increased earnings despite strict limits on machine numbers.
Treasury forecasts appear to support that trend. While profits from machines in registered clubs are expected to rise at a more moderate pace, revenue generated by pokies in pubs and hotels is projected to increase by around 8 per cent annually through 2027-28.
Wesley Mission chief executive Stu Cameron traces that pattern back decades. Since poker machines were introduced into hotels and pubs in the late 1990s, he argues, operators have refined business models designed to maximise returns from every machine available to them.
The Tax Concession Debate
The financial structure surrounding the industry has also drawn renewed scrutiny.
Poker machines in clubs continue to benefit from tax concessions not available to hotel operators. Those concessions are expected to cost the state more than $1 billion during the current financial year, a figure critics say undermines claims that government is serious about reducing gambling harm.
Greens MP Cate Faehrmann seized on the budget figures as further evidence that reform efforts have stalled. She argues that public subsidies and tax benefits continue flowing to large clubs while the social consequences of gambling addiction remain visible across the state.
Pressure Building Inside Labor
The political pressure is unlikely to fade anytime soon.
Poker machines are expected to become a flashpoint at next weekend’s NSW Labor conference, where members of the party’s left faction, backed by supporters from other factions, will push for a commitment to remove at least 45,000 machines over the next decade. New South Wales currently hosts close to 90,000 poker machines, roughly half the national total.
The proposal would represent one of the most ambitious machine reduction targets put forward within the party since Labor returned to government.
Government Defends Its Record
Minns has rejected suggestions that his government has stood still. During parliamentary question time this week, he pointed to a series of measures already implemented, including reducing the statewide cap on poker machines, removing hundreds of exemptions from mandatory overnight shutdown periods and lowering cash input limits on new machines from $5,000 to $500 from July.
Those changes, he argued, demonstrate that reform is underway even if larger structural proposals remain unresolved.
A government spokesperson said ministers continue to assess the costs and practical challenges associated with broader gaming reforms while considering the impact on an industry that supports more than 150,000 workers across the state.
Whether that argument satisfies critics may depend less on what has already been introduced than on what happens next. For now, the budget paints a clear picture: gambling revenue is expected to keep climbing, and the state is preparing its finances accordingly.
Source: theguardian.com
