Gambling News: August 2018 - Alliance for Gambling Reform

Gambling News: August 2018

Gambling News: TV ad spend soars after ban, Kennett’s pokies confusion, Woolies fesses up, Michael West on Dee Why, Crown renewed, mayors unite and Victorian data

Friday, August 17, 2018

In today’s bumper edition of Gambling News we cover soaring TV advertising spending, the Woolworths confession, Michael West’s probe into the Dee Why RSL, Jeff Kennett’s extraordinary pokies loss confusion, rising gambling losses in Victoria, mayors taking action for reform and Crown Melbourne’s licence renewal and unprecedented pokies disclosures. 

Click on one of the stories to jump to it:

  1. Gambling ads on TV soar after so-called Federal crackdown
  2. Woolworths confesses to appalling pokies practices
  3. Memo to Jeff Kennett: pokies cost Australians 6 times more than lotteries
  4. Michael West probes the Dee Why RSL
  5. Victoria reveals biggest jump in pokies losses for a decade
  6. Mayors unite on pokies reform as local papers splash on losses
  7. Hawthorn wins pokies premiership, what will Essendon do?
  8. Crown gets licence renewed - finally reveals pokies losses
  9. Best of the gambling media

1. Exclusive: Gambling ads on TV soar AFTER the so-called ban

The official data is in and Gambling News can now declare the Federal reforms on sports gambling ads on television have failed to make an impact.

Rather than cutting advertising, we can reveal TV gambling advertising has actually gone up by more than 30% in the latest quarter AFTER the restrictions kicked in.

The following is the all television wagering advertising booked through advertising agencies, as supplied to The Alliance by the independent group Standard Media Index:

June quarter 2017: $29.1m
June quarter 2018: $38.29m (an increase of 31.6%)

The advertising restrictions - including a siren to siren ban and limits on advertising before 8.30pm - came into place on April 1, 2018, so the quarter comprising April-May-June 2018 was the first under the new rules.

International coverage - see this recent piece out of the UK in The Guardian - has suggested Australia has taken strong action when, truth be known, it has been largely ineffective and the problem is getting worse.

All the major bookies such as Sportsbet, Crownbet (now Beteasy) and Tabcorp use advertising agencies so the Standard Media Index data is accurate for capturing total TV advertising spend, including pay-TV..

Clearly the football World Cup was a factor in this result, where Tabcorp deluged SBS viewers with ads and then later gloated that it made a handy profit from the $26 million its Australian customers lost on the event.

One solution here is what the Italian government has just done which is a real ban on all gambling advertising.

The Alliance advocates treating gambling like tobacco where all advertising is banned, so that would certainly be a good option for Australia if our political leaders ever took a public health approach to managing our world record levels of gambling harm.

2. Woolworths confesses to appalling pokies practices

After claiming for years they were Australia’s most responsible operator of poker machines, Woolworths has finally admitted this was bunkum.

The Alliance welcomed the admissions after the “independent investigation” into claims by employee whistleblowers about spying on gamblers first aired by independent Federal MP Andrew Wilkie.

In response to the Woolworths admissions, The Alliance has called for substantial leadership changes at ALH, along with full divestment by Woolworths, similar to what Coles is currently exploring with private equity firm KKR.

Here are links to some of the media after Woolworths released the outcome of its investigation:

Woolworths admits to plying big gamblers with free drinks
ABC online, 6 August, 2018

Queensland at the core of Woolworths scandal
Seven News Brisbane, 6 August, 2018

Bruce Mathieson junior speaks to The AFR on pokies scandal
AFR (pay), 6 August, 2018

Woolworths admits ruthless pokies tactics not acceptable
The Australian (pay), 6 August, 2018

Woolworths admits to profiling Queensland gamblers
Sydney Morning Herald, 6 August, 2018

Steve Austin interview on Woolworths scandal (starts 1hr 2min into audio file)
ABC Brisbane, 6 August, 2018

If Woolworths really wants to prove it can be more responsible, rather than only promising not to dish out free alcoholic drinks to gamblers, the first thing it should do is reduce its reckless trading hours.

The Alliance distributed this flyer to Woolworths shareholders at the 2017 AGM listing the 51 of 80 Victorian pokies venues which it operates the maximum 20 hours a day. Unsurprisingly, Woolworths featured prominently with 4 of the 8 most lucrative Victoria hotel venues in the latest 2017-18 pokies loss data, all of which operate the maximum 20 hours.

Woolworths is responsible for about 25% of all pokies losses in Victoria and remarkably, the most common closing time for a Woolworths Victorian pokies venue is 5am.

Alliance director Dr Susan Rennie stood for the Woolworths board at the 2017 AGM and delivered this memorable speech in support of her candidacy. The Alliance is contemplating further action in 2018 if the board fails to take more decisive action.

As this media release explains, Woolworths has been delivering record profits from its huge pokies empire in recent times. If it is getting out of plastic bags, why not something similar with the pokies?

We will get an update from Woolworths on Monday when the company releases its 2017-18 full year results. Here is the data on how the ALH pokies division profits have been rising in recent years:

2015-16: $209m of $2446m (8.5%)
2016-17: $233m of $2326m (10.17%)

In the first half of 2017-18, the pokies operating profit (EBIT) was $163 million out of $1.43 billion, which was a record high share of 11.4%. What will the figures show on Monday? Click on this link at about 9am on Monday morning to find out.

3. Memo to Jeff Kennett: pokies cost Australians 6 time more than lotteries

Former Victorian Premier and prominent pokies apologist Jeff Kennett tweeted out the following comment at lunch time on Tuesday:

“Public spend much more money on Tattslotto every week than they do on gaming machines”

For a public company director on the board of Seven West Media and chair of Equity Trustees, this was a remarkably misinformed comment, as Fairfax business gossip columnist Colin Kruger pointed out in Wednesday’s print edition of The Age and Sydney Morning Herald.

All Jeff needed to do was check out the latest national gambling statistics for 2015-16 on page 53 of this 820 page document produced by the Queensland Treasury. Or he could have read our media release when these 2015-16 stats were belatedly released in December last year.

Even if you include Keno as a lottery, the total national lotteries spend in 2015-16 was $2.47 billion, whereas the total pokies spend identified by the Queensland Treasury was $12.07 billion.

And that enormous but now out of date national pokies loss figure excludes the estimated $2 billion a year lost on the pokies in Australia’s 13 casinos, which had total gambling losses of $5.2 billion in 2015-16. The overall pokies losses in Australia in 2018-19 are likely to top $15 billion, based on the growth forecasts revealed in recent Victorian, NSW and Queensland budgets.

Even more remarkably, Jeff Kennett is President of the biggest AFL pokies club in Hawthorn which notched up a record $24.3 million in pokies losses at its two venues in 2017-18, as is explained in this media release.

And surely when Jeff Kennett bought personal control of pokies servicing company Amtek, his due diligence would have told him that pokies losses across Australia are about 6 times greater than lottery losses, even though the two categories are a lot closer when it come to the taxes paid to state and territory governments.

A quick look at Mr Kennett’s twitter feed shows that he has accepted his mistake.

Now that he knows the truly staggering facts, we will continue to push him to take action, like encouraging Hawthorn to divest their 165 poker machines! Click here to send a letter to Jeff Kennett and the leadership of Hawthorn FC to get them out of the pokie business.

World record levels of gambling harm is a hidden epidemic in Australia, but who really knows about it? Similar political ignorance was displayed by former NSW deputy premier Andrew Stoner when interviewed (pay) in The Constant Investor last year.

Stoner was one of the signatories to this notorious 2014 Memorandum of Understanding between Clubs NSW and the NSW Coalition. Since that agreement was signed, NSW pokies losses have soared by almost 40% to what is expected to be more than $7 billion in 2018-19, yet this is how Andrew Stoner explained the trajectory of NSW pokies losses:

Question: We’ve seen data out last week, New South Wales poker machine losses up another $400 million for the year to $6.1 billion I think it was, so really big losses. Do you think that’s just going to keep rising at $400 million a year or do you think there’s a chance you’ll ever see a clampdown on the most pokies saturated jurisdiction in the world, some people say, in New South Wales?

Andrew Stoner: Yeah, it’s already pretty tightly controlled  in terms of caps on poker machine numbers, on regulation and legislation around problem gambling.  The general licensing type restrictions that cover where these machines are located. I can’t see it growing anymore.  I missed the report in terms of the increase in losses through poker machines. I couldn’t hazard a guess as to why that’s occurred, but I think it’s certainly something the government will have a look at and if necessary, tweak some of that regulation around problem gambling or even access to poker machines and ATMs and all of that sort of thing that forms part of that regulation.

And what has the NSW Coalition Government done in response to these surging pokies losses? Absolutely nothing. Pokies losses are soaring as you can see from the most recent  NSW budget disclosures about pokies tax revenues.

And what has NSW Labor done? Absolutely nothing.

Surely, we won’t see either of the two big parties reaching new agreements with Clubs NSW, Australia’s equivalent of the ruthless NRA, before the next NSW election which effectively shuts down any possibility of meaningful reform for 4 more years.

The Alliance has a very simple policy ask of both parties: do not sign any agreements with the gambling industry above and beyond what the current legislation prescribes and instead simply promise to treat gambling addiction as a serious public health problem during the life of the next Parliament.

4. Michael West hops into the predatory Dee Why RSL

Investigative journalist Michael West has been digging around the Dee Why RSL and published this cracking initial story about the predatory pokies industry on Monday.

He’s right to point out it really does operate like a casino, albeit with dreadful transparency on issues such as executive pay.

Much of West’s journalism is crowd funded, so it you want more digging into the gambling industry, why not support him with a modest monthly contribution.

After Fairfax’s Nick O’Malley broke the story about the tragic suicide of Northern Beaches builder Gary Van Duinen on July 1, Fairfax columnist Peter FitzSimons summed up the feelings of many with this powerful column in the  Sydney Morning Herald.

Alliance deputy chairman Allison Keogh also had this opinion piece in The Sydney Morning Herald. The Dee Why RSL was reckless and ruthless in the way it dealt with Gary and deserved everything it got in this stinging SMH editorial.

Sadly, the Dee Why RSL and its peak body, ClubsNSW, have shown no contrition, with neither the chair or CEO prepared to answer questions submitted by Michael West.

Meanwhile, the RSL brand continues to be damaged by other applications to expand a pokies empire which is already responsible for more than $1 billion worth of gambling losses annually.

The Darebin RSL will be in VCAT later this year against City of Darebin, the Glenroy RSL recently lost a Supreme Court case with City of Moreland, the Dandenong RSL will be up against its local council before the VCGLR in a few weeks and the Geelong RSL has just applied for an additional 30 machines.

In others words, the RSL is already massively into the pokies and they want even more. Inflicting all this harm on the community is so far removed from what the RSL mission is meant to be.

5. Victoria reveals biggest jump in pokies losses for a decade

Australians are already the world’s biggest gamblers in per capita terms and we now know there has been a troubling 6% rise in Victorian monthly losses since the reckless bipartisan deal last November to legislate for new 20 year pokies licences.

The 2017-18 venue loss data was released by the VCGLR last month and it showed that $2695 million was lost in the 12 months to June 30, an overall rise of $86 million or 3.29% for the year.

However, as The Alliance outlined in this media statement responding to the data, virtually all of the increase came in the last 7 months of the year, after the legislation had been passed.

As former VCGLR boss Peter Cohen tweeted, that’s 7 consecutive months where the spend has increased by more than 4%.

The past 10 years of pokies losses in Victoria have been as follows:

2008-09: up $94m to $2707m
2009-10: down $110m to $2597m
2010-11: up $54m to $2651m
2011-12: up $30m to $2681m
2012-13: down $191m to $2490m
2013-14: up $14m to $2504m
2014-15: up $68m to $2572m
2015-16: up $44m to $2616m
2016-17: down $7m to $2609m
2017-18: up $86m to $2695m

Victoria is almost certain to set a new all-time record for pokies losses in the current 2018-19 financial year and exactly what mandate did the two major parties have to cause this outcome?

As was explained in this Alliance media statement, the recent decision to switch 414 lapsed club entitlements to hotels will also further turbo-charge losses. The government is expected to announce the recipients of these licences soon as today is the deadline for venues to accept offers for the new 20 year licences which run until 2042.

Here are links to some of the media coverage on the troubling rise in Victorian losses:

Anna Bardsley felt thrown under the bus by new pokies legislation
Seven News, 27 July, 2018

Victoria hit by the biggest pokies losses in a decade
ABC online, 27 July, 2018

Hawthorn tops the charts again for pokies losses
AFL.com.au, 27 July, 2018

Tim Costello and Anna Bardsley video from Parliament House media conference
News Corp websites, 27 July, 2018

AFL clubs reaped $100m pokies windfall last year
The Age, 27 July, 2018

6. Mayors unite for pokies reform as local papers report on rising losses

The Alliance publicly launched its Victorian state election policy at a “Mayors Unite for Pokies Reform” event  on the steps of the Victorian Parliament on July 24. (See the media release here.)

Speakers included Moreland mayor John Kavanagh, Darebin mayor Kim le Cerf, Whittlesea mayor Kris Pavlidis, acting City of Yarra mayor Misha Coleman, plus Cr Matthew Kirwan from Greater Dandenong and Cr Joseph Haweil from Hume.

Below is a package of media links from the event:

Video of mayors speaking on steps of Parliament House
Herald Sun, 27 July, 2018

Whittlesea calls for pokies reform ahead of state election
Star Weekly, 26 July, 2018

Victorian councils demand $1 maximum bets
The Age, 24 July, 2018

Video package of mayors and Tim Costello speaking on pokies reform
Whittlesea Facebook page, 24 July, 2018

Glen Bartholomew interviews Moreland mayor John Kavanagh
ABC Newsradio, 24 July, 2018

Victorian Liberal leader Matthew Guy leaves door open for pokies reform
AAP, 24 July, 2018

Victorian gamblers set to lose $2.7 billion on the pokies in 2017-18
Herald Sun, 23 July, 2018

Many of the local papers in Melbourne also ran strong stories on the recent pokies loss data in their respective council areas.

Indeed it was the page 1 lead story in the following eight Leader newspapers over the past fortnight: Manningham, Heidelberg, Northern, Cranbourne, Mordialloc Chelsea, Moorabbin Glen Eira, Monash, Northcote.

The online versions of these stories often included video grabs from the July 24 mayors event on the steps of Parliament. Here are 3 examples:

Manningham Leader splashes on surging pokies losses
Manningham Leader, 6 August, 2018

Monash losses rise with Mulgrave Country Club doing the most damage again
Monash Leader, 7 August, 2018

Pokies losses in Knox exceed total rates revenue
Knox Leader, 6 August, 2018

Finally, check out this special page on our website tracking the various gambling related motions put up by councils across Australia, including the three most recent efforts by City of Frankston, City of Yarra and City of Brimbank.

The full list of motions provides a smorgasbord of ideas for councillors across Australia who are keen to get into the gambling reform space.

7. Hawthorn wins pokies premiership, what will Essendon do?

The Alliance was thrilled when Collingwood Football Club decisively exited the toxic pokies industry by selling its two Melbourne venues to Melbourne Racing Club, which is now the biggest not-for-profit operator in Victoria.

However, the move didn’t stop a new record being set for pokies losses at AFL clubs in 2017-18, with Hawthorn once again taking out the pokies premiership with $24.3 million in losses, as this piece in The Age explains.

The focus has now shifted once again to Essendon Football Club to withdraw its proposal for a new 24 year pokies venue lease at the Melton Country Club. (see recent Alliance newsletter plus reports in The Age).

This is pretty simple - Essendon should not ask for a new 24 year pokies lease and if they do, the 9 elected Melton councillors, acting as responsible landlords, should say no, or at the very least insert a City of Melbourne-style clause into the lease providing incentives for future divestment.

If you’d like to send a letter to the Melton Councillors to urge them not to approve this lease extension, click here!

Thankfully, the plan to put the proposal to a vote at the August 20 meeting has been delayed, just as occurred at the July 23 meeting, so hopefully this means Essendon is having second thoughts.

The issue of pokies venues on council-owned land is far too prevalent across Australia, but at least it gives councillors more influence to intervene when it comes to lease renewal.

The Melton Country Club has 89 pokies and in 2017-18 generated annual losses of more than $5.5 million.

The Alliance has been putting pressure on Essendon chairman Lindsay Tanner, a former Federal Finance Minister with a reputation for transparency, innovation and honesty,  to show leadership and a social conscience by leading the club out of the pokies business.

It was pleasing that Mr Tanner recently attended a pokies forum at RMIT where Tasmanian Labor leader Rebecca White discussed the issue on a panel which also included Alliance director, Dr Susan Rennie.

8. Crown Melbourne gets another 5 years - ordered to clean up its act

Crown Melbourne has kept its Victorian casino licence after a comprehensive review by the Victorian regulator, but a number of issues remain up in the air, including the ongoing probe into the 2016 arrest of 17 Crown staff in China.

Monash University’s  Charles Livingstone had a good wrap of the issues this week in The Conversation and also read this Alliance media statement.

The Alliance made this submission to the 5 yearly licence review calling for a new licence condition which limits any individual shareholder to no more than 20% of the company.  This was rejected, even though rival Australian gambling giants such as Tabcorp and Star Entertainment operate with 10% maximum shareholder restrictions imposed by the NSW and/or Queensland governments.

An emerging issue with Crown relates to the enormous skyscrapers it is proposing in Melbourne and Sydney.

The company is taking Supreme Court action against the NSW Government trying to protect its views at Barangaroo, but at the same time has warned it may need to seek an extension of time and a new partner for its enormous One Queensbridge Square project in Melbourne, which is mentioned regularly in the VCGLR licence review.

Should Crown Melbourne get an extension of time if it fails to start construction before the March 2019 deadline? The Andrews Government has quite a record when it comes to doing favours for Crown, as this ABC television 7.30 piece from last year outlines in relation to special planning approval for Crown to build the tallest building in the southern hemisphere.

The Melbourne licence review outcome was revealed shortly before Crown unveiled its 2017-18 full year profit, which for the first time disclosed pokies revenue at its Melbourne and Perth casinos.

See The Alliance media release on that issue teasing out the implications of $450 million worth of losses at Crown Melbourne and $265 million at Crown Perth. The onus is now on Star Entertainment to match this level of disclosure by revealing the separate pokies revenue at its Brisbane and Gold Coast casinos. We’ve asked them to do this, in a similar way to their disclosure of the Sydney pokies losses. (See more on that here.)

Meanwhile, here are links to some of the media coverage after the Crown Melbourne licence decision:

Costello: If Dan Andrews was proud of Crown report, why do it 3pm on a Friday?
Herald Sun, 3 August, 2018

Shareholder class action turns up extra documents in Crown China probe
Inside Asian Gaming, 3 August, 2018

Chanticleer: Crown report highlights board governance issues
AFR, 3 August, 2018

Regulator rejects bulk of Wilkie claims
AFR, 3 August, 2018

Crown Melbourne ordered to lift its game
Seven News, 3 August, 2018

Crown lacking progress on responsible gaming
The Age, 3 August, 2018

9. A wide range of interesting media articles and interviews on gambling

Finally, we’ve been busily updating our web page linking to interesting media on gambling issues from around the world. Here are links to some additional items worth reading:

Michael West probes the Dee Why RSL pokies casino
Michael West website, 13 August, 2018

NSW pokies losses soar again
Sydney Morning Herald, 12 August, 2018

Pressure mounting for action in the UK on saturation gambling advertising
The Guardian, 11 August, 2018

Gambling obsessed Queensland Government hurtles down the casino path
Gold Coast Bulletin, 10 August, 2018

Crown windfall driven by $450m in Melbourne pokies losses
The Guardian, 9 August, 2018

British football getting over-run by gambling ads like never before
Cashlady.com, 6 August, 2018

The misleading Clubs ACT campaign continues
The Canberra Times, 6 August, 2018

UK Gambling Commission shows the Australians how a real regulator acts
The Guardian, 1 August, 2018

Pokies become Victorian election issue, but do the major parties care?
The Guardian, 28 July, 2018

That’s all for now. We’ll be back with another Gambling News update within a fortnight.

Meanwhile, if you’d like to become a financial supporter of The Alliance as we battle to reduce world record levels of gambling harm in Australia, click here.

Until next time.

Do ya best,
Stephen Mayne
Editor of Gambling News
Feedback to stephen@agr.org.au,  0412 106 241 or DM tweet to @maynereport