Gambling activity in Australia

Findings from wave 15 of the Household, Income and Labour Dynamics in Australia (HILDA) Survey
Research Report – November 2017

6. Gambling and the household budget

Introduction

This chapter presents gambling expenditure in the context of household budgets, and explores the impact of gambling expenditure on households of different income levels. Gambling expenditure is compared to spending on two essential consumable groups, groceries and utilities. Expenditure on these three groups is compared and examined as a proportion of the combined disposable income of all household members in homes containing a gambler. Expenditure patterns are examined across five household income quintiles ranging from low income to high income households, and also across risk groups. Rates of household financial stress are also compared across risk groups. Details of variables used are provided in Appendix C.

Key findings

  • Gamblers in the lowest income quintile households spent a much greater proportion of their household incomes on gambling compared to those in the highest income households (10.4% vs 1.3%), despite a lower average spend in dollar terms ($1,661 vs $2,386).
  • Higher risk gamblers within each household income quintile spent greater proportions of the household's disposable income on gambling. Problem gamblers in the lowest income households spent the greatest proportion (27%) - equivalent to four times the average yearly household utility bills, and more than half the grocery bills, of that income group.
  • Households containing higher risk gamblers experienced a much higher rate of stressful financial events than those of lower risk gamblers. 51% of problem gamblers lived in households where someone had to ask for financial help; 27% were unable to pay the mortgage or rent on time.

Gambling expenditure as a proportion of household disposable income

Gamblers' households are the units of observation in this subsection, meaning that income refers to the sum of all household members' disposable incomes in homes containing a gambler. Gambling, grocery and utility expenditure likewise refer to the sum of all members' expenditure in homes containing a gambler. Table 6.1 shows that in gambling households there was an average of 1.4 regular gamblers. The mean number of gamblers per household was less in lower income households, reflecting their having a smaller average number of adults.

Table 6.1 shows that gamblers in lower income households spent a much greater proportion of their household's disposable income on gambling than middle and higher income households. Among households in the lowest income quintile, gamblers spent 10% of disposable income available to all members on their gambling activities. Among middle income homes, this was 2%. Among homes in the highest income quintile, this was only 1%.

Figure 6.1 expands on the expenditure information to also show the proportion of gambling households' disposable income spent on groceries8 and utilities9. Compared to expenditure on essential consumables, gambling accounted for a similar proportion of disposable income as utility bills across most households. Groceries accounted for four to six times as much. The lowest income households were an exception, with gambling accounting for 60% more disposable income than utilities.

Table 6.1: Proportion of gambling households' disposable income spent on gambling, by income quintile
Disposable household income Mean income Mean household gambling expenditure % of income spent on gambling Mean number of adult household members Mean number of adult household members who are gamblers
<$38,000 26,019 1,661 10.4 1.4 1.2
$38,000-$63,749 51,371 1,806 3.6 1.8 1.3
$63,750-$92,499 77,675 1,675 2.2 2.2 1.3
$92,500-$131,999 110,921 2,035 1.9 2.5 1.4
$132,000+ 207,194 2,386 1.3 2.9 1.4
All gambling households 96,874 1,930 3.6 2.2 1.4

Notes: Values are based on weighted data and uncapped expenditure at a household level. Annual income and expenditure data are presented.

Figure 6.1: Proportion of gambling households' disposable income spent on groceries, utilities and gambling, by income quintile

Figure 6.1: Proportion of gambling households’ disposable income spent on groceries, utilities and gambling, by income quintile

Gambling expenditure as a proportion of household income by risk group

Individuals' expenditure on gambling was further compared to the total disposable income brought into their household by all members, by risk group membership.

The pattern of lower income households spending a higher proportion of household income on gambling was even stronger when a member was a higher risk gambler (Figure 6.2). Table 6.2 provides further context to these findings, showing the dollar values these proportions represent for the average household income in each quintile.

A remarkable finding was the relative impact that problem gambling had on households with different income levels. Among homes in the lowest income quintile, problem gamblers spent an average of 27% of their households' disposable income on gambling. Among households in the highest income quintile, problem gamblers spent only 4% of household income.

Among non-problem gamblers, those in low income homes were spending on average about 5% of their total household budget on gambling, compared to 1% in middle income homes and 0.5% in high income homes. This figure (5%) is also higher than the percentage of total household income spent by problem gamblers from homes in the two highest income quintiles.

Figure 6.2: Proportion of gambling households' disposable income spent on gambling, by risk group and income quintile

Figure 6.2: Proportion of gambling households’ disposable income spent on gambling, by risk group and income quintile

Table 6.2: Proportion of gambling households' disposable income spent by gamblers, by risk group and income quintile
    Non-problem gamblers low risk gamblers Moderate risk gamblers Problem gamblers
Disposable household income Mean income %
spent
$
value
%
spent
$
value
%
spent
$
value
%
spent
$
value
<$38,000 26,019 5.4 1,410 7.9 2,048 12.4 3,234 26.5# 6,891
$38,000-$63,749 51,371 1.7 889 4.1 2,127 6.6 3,389 13.7 7,033
$63,750-$92,499 77,675 1.0 802 2.4 1,844 3.7 2,857 11.5 8,960
$92,500-$131,999 110,921 0.8 862 3.2 3,515 2.8 3,130 3.8 4,247
$132,000+ 207,194 0.5 1,101 1.1 2,248 3.1 6,362 3.4 7,055

Notes: Values based on weighted data and capped expenditure at a participant level. Percentages may not total 100% due to rounding. Expenditure calculations exclude those who reported they had participated in an activity in a typical month, but who did not report a dollar amount when prompted for the expenditure. # RSE between 30% and 50%.

Financial stress

All household members aged 15 or above were asked whether they had experienced range of stressful events in the past year, such as going without meals or being unable to pay bills on time, due to a shortage of money. As financial stress may be experienced differently by different household members, these answers were combined to show whether any household member had experienced these events. Rates of household financial stress were compared across gambling risk groups to explore the relationship between gambling-related problems and household financial wellbeing. Table 6.3 presents the proportion of Australian adults and adult gamblers whose households experienced common stressful financial events in 2015.

It is evident that households containing gamblers who had problems experienced a much higher proportion of events than those of non-gamblers. Conversely, a lower proportion of non-problem gamblers' households experienced stressful financial events than those of non-gamblers. Risky gambling behaviour, but not gambling participation in and of itself, was associated with a higher likelihood of household members reporting any stressful financial event.

Most common to all risk groups were the experiences of being unable to pay electricity, gas or telephone bills on time, and needing to ask friends or family for financial help. Around one in five non-problem gamblers' households experienced these events, increasing across risk groups to one half of problem gamblers' households asking for help. Following the same pattern, a quarter of households containing problem gamblers were unable to pay the mortgage or rent on time, and went without meals - events experienced in less than one in 10 non-problem gamblers' households. The findings show that problematic gambling behaviour is strongly connected to the financial wellbeing of households.

Table 6.3: Proportion of adults whose household experienced stressful financial events, by risk group
  Australia Regular gamblers Non-gambler Non-problem gambler Low risk gambler Moderate risk gambler Problem gambler
Someone in householda % % % % % % %
Could not pay electricity, gas or telephone bills on time 18.5 18.7 18.3 17.1 23.0 30.7↑ 33.8↑
Could not pay the mortgage or rent on time 9.4 9.5 9.3 8.6 10.0 16.3↑ 26.7↑
Pawned or sold something 8.9 8.6 9.1 7.7 11.6 11.6 28.0↑
Went without meals 5.5 4.8 5.9 3.9↓ 6.2 9.9 21.4↑
Was unable to heat home 5.1 5.0 5.2 4.2 7.1 8.3 17.4↑
Asked for financial help from friends or family 19.7 17.7 21.0 15.7↓ 23.7 25.8 50.8↑
Asked for help from welfare/ community organisations 6.4 5.6 6.9 4.5↓ 11.1↑ 8.5 18.5↑
Experienced any event 31.0 29.8 31.8 27.2↓ 37.2 44.8↑ 60.9↑
Experienced two or more events 18.6 18.3 18.7 16.4↓ 23.3 29.1↑ 44.2↑

Notes: Values based on weighted data. Percentages may not total 100% due to rounding. ↑ and ↓ are used to indicate values significantly above or below non-gamblers at p<.05 a - Combined response of all responding household members aged 15 or over

8 Includes food, cleaning products, pet food and
personal care products. Does not include alcohol or tobacco.
9 Includes electricity bills, gas bills and other heating fuel such as firewood and heating oil.