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Gambling is a popular leisure activity but also a significant public health issue in Australia. The severity of gambling in Australia is characterised by unprecedented gambling expenditures and losses representing the highest gambling rates in the world, which has led to renewed interests in understanding the factors influencing gambling behaviours. We contribute to the debate on the determinants of gambling by providing the first study that examines the impact of ethnic diversity on gambling. Using data from the Household, Income and Labour Dynamics in Australia survey, we find that ethnic diversity is positively associated with gambling. This result is robust to alternative estimation approaches, alternative ways of measuring ethnic diversity and irrespective of whether gambling is measured using the Problem Gambling Severity Index, gambling expenditures or number of gambling activities. Our results also suggest stronger effects of ethnic diversity for problem gamblers compared to gamblers in other risk categories. These results support the need for policies that promote social capital in diverse communities to reduce the risks of social isolation, which is an important motivator of gambling behaviour.

Australia’s Gambling Epidemic: The Role of Neighbourhood Ethnic Diversity