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The Impact of Vertical Fiscal Imbalance on Gambling Policies in New South Wales, Australia: The Rise of the Poker Machine
Journal article   Open access   Peer reviewed

The Impact of Vertical Fiscal Imbalance on Gambling Policies in New South Wales, Australia: The Rise of the Poker Machine

Barbara Kinder and Michael B. Charles
The Australian journal of politics and history, Vol.First online, pp.1-14
13/07/2026
DOI: https://doi.org/10.1111/ajph.70086
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The Impact of Vertical Fiscal Imbalance on GamblingPoliciesView
Published (Version of record) Open CC BY-NC-ND V4.0

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Abstract

gambling New South Wales poker machines political economy vertical fiscal imbalance
This study traces how gambling in Australia changed from a simple form of leisure, enjoyed by all social classes in colonial times,to a billion-dollar industry driven by political and economic imperatives. Using a case study, it links vertical fiscal imbalance (VFI),caused by changes to the state-federal taxation structure, to the development of the New South Wales (NSW) government's ongoingreliance on gambling taxation, especially via the liberalisation of poker machines. It is argued that, as revenue sources tightenedafter the Second World War, the rush to poker machine gambling taxation accelerated, thereby creating a pattern of relying on suchincome to address state revenue shortfalls, that have seldom been linked to VFI and subsequent gambling policies. Drawing on arange of primary sources, including official Hansard records from parliamentary debates, media reports and industry publications,this analysis makes a unique contribution to the history of the political economy of gambling in Australia. Importantly, it aims toprovide new insights into the state's role in addressing current policy failures in reducing poker machine gambling harm in NSWand suggests that a change in federal–state funding arrangements is required to reduce VFI and prevent gambling-related harm.

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