In this study of gambling frequency and problem gambling in school‐based young people from the western suburbs of Melbourne, 710 students from Years 10, 11 and 12 were surveyed in 1996, and 776 students from the same years and from the same schools were surveyed in 1998. The mean age of both cohorts was 16.3 years. The major aim of the study was to assess changes in youth gambling patterns over this two‐year period. A second aim was to compare gambling patterns among Asian youth in comparison with their Anglo‐European counterparts. Results indicated that gambling frequency (including use of poker machines) had significantly reduced over the two‐year period, as had problem gambling. Contrary to the stereotype, young Asian background students were less likely to gamble than Anglo‐European students, spent less money on gambling, but paradoxically, scored higher on the problem gambling scale. Possible reasons for this anomalous finding were discussed.