Why Australia’s Casinos Are Bleeding Money

Australia has long been known as one of the world’s most gambling-intensive nations. Between poker machines (“pokies”), sports betting, lotteries and online wagering, Australians lose tens of billions annually to gambling. Yet while total gambling losses are rising, many land-based casinos are also seeing profits decline. A unique combination of culture, regulation, and changing consumer behavior is undermining what were once resilient revenue streams.

To begin with, pokies in pubs and clubs, rather than casinos, are deeply ingrained in everyday Australian life. These machines are everywhere: suburban pubs, small towns, and inner-city hotels. Because people don’t need to travel far to gamble casually, the draw of a destination casino is becoming less enticing.

As one analyst put it, there’s less marginal gain from enticing a gambler to visit a casino when that person already has access to pokies just down the road. The prevalence of pokies, which are everywhere, has reduced foot traffic and revenue at casinos.

Regulatory change has also hit casinos particularly hard. Over recent years, stricter oversight of casinos, through more rigorous anti-money laundering rules, mandatory identity checks, “carded gaming” (requiring patrons to use player cards for monitoring), loss/time limits, and slower gaming machine spin rates, has increased compliance costs and dampened discretionary gambling. These rules aim to reduce social harm but also shrink the margin for casual or high-spend gambling in the legal infrastructure of casinos.

Additionally, online gambling, including sports betting, has experienced a surge. Convenience, speed, aggressive marketing, and mobile apps are making it easier for Australians to gamble from the comfort of their own homes. This shift has drawn spending away from brick-and-mortar casinos. While traditional casinos incur large overheads, such as real estate, staffing, and luxury amenities, many online platforms operate with lower fixed costs and can quickly adapt their offers and promotions. This asymmetric cost structure makes it harder for physical casinos to compete.

Casinos have also suffered from reputational damage and legal troubles. Major operators, such as Star Entertainment Group and Crown Resorts, have faced inquiries, fines, and investigations over money laundering breaches, associations with crime, and governance failures. These incidents have often resulted in license suspensions, regulatory restrictions, or additional compliance burdens.

An added complication is the rising cost of living. When households are squeezed by inflation, energy, housing, and groceries, discretionary spending tends to be one of the first things cut. Gambling at casinos, often more expensive in travel, food, and time investment, is more vulnerable to economic downturns than simpler forms of gambling like pokies or online bets.

The financial toll is becoming clear. According to recent data, casino‐based expenditure has declined by over 35% since the 2018-19 period. Meanwhile, other sectors—such as sports betting, online gambling, and pokies located in non-casino venues—are thriving, with much of the gambling “market boom” occurring outside traditional casino walls.

What does this mean for Australia’s casino operators? Cost-cutting is already underway. Some casinos have closed VIP floors, laid off staff, reduced certain services, or delayed expansion projects. Others are trying to innovate by offering non-gambling attractions, more integrated entertainment experiences, or bringing in locals with food, shows, and nightlife, rather than relying purely on gaming revenue. However, these adaptations come with risks and costs. The scale of investment required to compete with online platforms or transform facility use is substantial, and regulatory uncertainty further complicates the challenge.

From a policy perspective, there’s growing public pressure for reform. Advocates highlight the social harm associated with gambling, particularly pokies, and call for tighter regulation, advertising curbs, mandatory loss limits, and better protections for vulnerable communities. Such measures, though likely to reduce harm, may make the casino business environment more constrained for operators.