Gambling News: Woolworths shamed, Crown reveals pokies revenue, Michael West, Victorian losses, Ross Ferrar, VCGLR case wrap and much more

Gambling News: Woolworths shamed, Crown reveals pokies revenue, Michael West, Victorian losses, Ross Ferrar, VCGLR case wrap and much more

In this bumper edition of Gambling News, we reveal a new poll showing strong support for gambling reform, cover the latest Woolworths pokies profits and scandals,  assess the newly disclosed pokies losses at our biggest casinos and the latest Victorian data and pokies cases. We also unveil our support for Michael West’s investigation into NSW clubs and encourage Ross Ferrar to retire (which he did) after his latest OTT claims about his beloved pokies industry.

Essential Media poll shows strong support for gambling reform
Woolworths confesses as pokies profits jump again
Crown and Star Entertainment reveal $1.376b in pokies losses
Victorian pokies losses jump for 8th straight month
Alliance supports cracking Michael West probe of NSW pokies clubs
Ross Ferrar jumps the shark - time to go?
Clubs and pubs pushing back in NSW
Busy times for applications at the VCGLR
ACMA moves to ban advertising during live streaming of sport
Best of the gambling media

Essential poll show strong support for pokies reform

Essential Media has done a poll on the gambling industry and discovered there is very strong support for reforms, with gamblers even more enthusiastic for change than non-gamblers.

The online poll of 1035 respondents found there was 63% support for introducing $1 maximum bets as proposed twice by the Productivity Commission with only 15% opposed or strongly opposed. An even stronger  69% of regular poker machine gamblers backed this measure.

Changed regulations to make machines less addictive was supported by 71%, and even 60% backed reduced trading hours of pokies venues.

The deluge of TV ads continue to annoy viewers with 69% supporting a ban of TV ads during sporting events with only 16% opposed to this.

Have a read of the full report starting on p15 because it shows the majority of respondents never gamble and less than 10% gamble more than once a month.

Essential Media co-founder Peter Lewis discussed the findings with James Valentine on ABC Sydney earlier this week (listen 40 minutes into this audio file).

He noted with interest that people who gamble more than once a month were more supportive of reforms than non-gamblers. That suggests gamblers are aware of the harm being caused.

All up, this confirms yet again that the major political parties are way out of step with the public as they continue to deluge world record levels of harm on citizens despite strong community support for reform.

Woolworths confesses to appalling pokies practices as profits soar again

The Woolworths annual profit was released on August 20 and once again it showed a record contribution from the company’s pokies pubs division, coinciding with the supermarket giant’s  stunning admissions about cowboy pokies practices.

The hotels division lifted earnings before interest and tax (EBIT) by 11.1% to $259 million (see p9 of presentation) and this constituted a record share of 10.16% of overall group EBIT. (See our media release setting out the full history of rising pokies profit share.)

And 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 on August 6 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, the Woolworths joint venture with pokies billionaire Bruce Mathieson, along with full divestment by Woolworths, similar to what Coles is currently exploring with private equity firm KKR.

The leadership changes include someone other than a Mathieson running the business and the long overdue departure of ALH chairman Roger Corbett who was this week described in Eternity magazine as “Australia’s most controversial christian”.

If you believe his comments to Eternity magazine, Corbett is saying everything is fine and dandy straight after leading an investigation which found a series a major problems and led to sackings of various ALH venue managers and staff.

And since the ALH investigation concluded, there has been more stunning media revelations from both Seven West Media and Fairfax involving different whistleblowers as follows:

Another cracking Nick O'Malley scoop on predatory ALH practices
Sydney Morning Herald, 21 August, 2018

Brian Seymour on predatory Woolies pokies tactics
The West Australian, 20 August, 2018

The Woolworths AGM is coming up on November 21 in Sydney and it promises to be another lively affair after all the drama of the past year. Here is the transcript from the 2017 AGM in Melbourne.

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. Further action is contemplated in 2018 if the board fails to take more decisive action.

Crown Resorts and Star Entertainment reveal combined pokies revenues of $1.376 billion

For the first time, we finally have pokies revenue data from Australia’s biggest pokies venues after Crown Resorts bowed to Alliance requests from last year’s AGM and disclosed that it took $715 million from poker machines gamblers in 2017-18. (See all the detail in this media statement.)

However, interestingly, the figures reveal there is no pokies revenue growth at Crown’s Melbourne or Perth casinos, whereas pokies losses at the Sydney and Queensland casinos run by Star Entertainment continue to rise, matching the trend noticed in the recent NSW and Queensland budgets which were predicting large increases in pokies tax revenues. (see media release)

The Crown result was out on August 9 and then Star Entertainment released its 2017-18 profit last week, so we now have much great visibility into pokies losses at Australia’s 5 biggest casinos.

Crown Melbourne is clearly the biggest with $450 million in losses, but The Star in Sydney also does a lot of damage after lifting pokies losses from $319 million in 2016-17 to $335.6 million in the latest year. (see p31 of this presentation)

The Star declined a request from The Alliance to break out the pokies revenue at its two Queensland casinos in Brisbane and the Gold Coast,  instead just providing an overall 2017-18 figure of $326 million, up from $308 million in the previous year. (again, see slide on p31)

This means The Star managed to lift overall pokies losses by 5.5% or $34.6 million to $661.6 million in 2017-18.

It still trails Crown’s $715 million, but the $450 million from Crown Melbourne was only up 0.2% for the year and the $265 million lost on the pokies at Crown Perth was down 0.6% for the year. (See p4 of the Crown presentation to the ASX).

We only have 2 years worth of data from Crown’s casinos but here is the longer history of pokies losses at The Star in Sydney, the world’s most pokies saturated major city:

2011-12: $239.4m
2012-13: $242.1m
2013-14: $255.6m
2014-15: $288m
2015-16: $313m
2016-17: $319m
2017-18: $335.6m

The Star is pretty pleased with the extra losses in 2017-18, declaring on p7 of its ASX announcement that it achieved “record market share” in the Sydney pokies market. That’s also record levels of harm in the world’s most gambling harmed city, something the NSW Government and Opposition urgently needs to address going into the March 2019 state election.

Victorian pokies losses jump for 8th straight month

The pokies losses at Crown Melbourne might have been stable at $450 million in 2017-18, but they continue to rise strongly at the 497 club and pub pokies venues across the state.

Last Friday we got the monthly figures from July 2018 and they showed another jump of 3.9%, compared with a year earlier. The biggest percentage increases were felt in council areas including Brimbank, Wyndham, Geelong and Manningham.

We are now almost certainly headed for record calendar year losses and a record financial year loss in 2018-19. This is how the Victorian monthly losses have rolled out so far in 2018:

Monthly losses

2017 ($m)

2018 ($m)

Numeric Change

Per cent Change

Jan

$209.4

$221.7

12.3

5.9

Feb

$193.6

$203.5

9.9

5.1

Mar

$213.2

$227.3

14.1

6.6

April

$210.5

$220.5

9.9

4.7

May

$212.4

$227.2

14.8

7.0

June

$212.2

$223.3

11.1

5.2

July

$230.1

$239.0

8.9

3.9

Year to date

$1,481.3

$1,562.5

$81.1

5.5%


Australians were already the world’s biggest gamblers before the Victorian Parliament decided to increase the harm with a 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, that excludes the $450 million lost at Crown Melbourne and then when you factor in the likely $120 million increase this calendar, total Victorian pokies losses will exceed $3.2 billion in 2018.

As The Alliance outlined in this media statement responding to the 2017-18 data, virtually all of the increase came in the last 7 months of the year, after the legislation had been passed. This trend is now continuing into 2018-19.

The past 10 years of pokies losses (excluding Crown) 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.

Questions asked at budget estimates established that the industry paid $56 million in February as their first instalment on the new 20 year licences and the switch of 414 club entitlements to pubs is expected to generate an additional windfall for the government.

Whilst state government revenue dependency is an inhibitor of reform, perceived industry power and intimidation is a far bigger problem, particularly after the recent Tasmanian experience when $5 million was spent backing the pokies-captured Liberals after Labor proposed removing all pokies from pubs and clubs.

Alliance backs Michael West probe into NSW pokies clubs

As part of our strategy to discredit a ruthless and enormously harmful industry, The Alliance has decided to back independent investigative journalist Michael West as he probes the big NSW pokies clubs.

We were impressed by this cracking initial story West produced about the notorious Dee Why RSL and were also shocked to learn about the growth of gambling harm in this piece published on Tuesday night about the enormous Dooley’s pokies venue, the largest associated with the Catholic Church in NSW.

Our brief with Michael West is that we want him to engage financial experts to comb through the financials of some of the biggest suburban casinos in Sydney’s club scene, revealing just how much they make from their addictive machines. We have noticed that many of these clubs have poor transparency, long-serving largely male directors, along with excessive perks and executive pay, so we are encouraging a journalistic and financial investigation which makes the case for improved transparency and accountability at major NSW Clubs.

Down the track, there might even be a strong case to use the fruits of some serious financial investigation to pursue a “Club Watch” website which promotes better transparency and accountability at NSW clubs, along with reduced gambling harm and political influencing.

Michael West has complete editorial control over the project and we don’t see the stories before they are published.

The arrangement is flexible, transparent and simple: a modest amount of funding is provided to have a dig into the gambling industry.

We look forward to seeing what he produces and are pleased to support investigative journalism.

As editor of Gambling News, I’ve also taken out a personal $20 monthly subscription to support West’s independent journalism and encourage other readers to do the same. The payment section is to the right of every story on the website, including this latest piece on Dooley’s.

As West says on his website, “Don’t pay so you can read it. Pay so everybody can read it.”

NSW is the epicentre of Australia’s notorious gambling industry capture - the industry lobbies all state governments saying “but in NSW they let us do whatever we like”. This is why our campaign must make headway into the big NSW Clubs which has a peak body in Clubs NSW that has a ruthless operating style akin to the NRA in guns-captured America.

Pokies spruiker Ross Ferrar jumps the shark - then retires!

The Victorian gambling regulator didn’t turn up but the Queensland and NSW regulators must have been acutely embarrassed about agreeing to participate in the Gaming Technologies Association annual trade show in Sydney earlier this month.

Long-serving GTA CEO Ross Ferrar sparked much mirth in his over the top address at the beginning of the conference, particularly when he said the following:

"When the anti-gambling activists drive off down the pokies-funded road to drop their kids at the pokies-funded school and when they have to visit the pokies-funded hospital, I hope they remember that government revenue from gambling benefits all Australians, whether they like poker machines or not."

The Age’s Nick Toscano covered these outlandish statements, including some strong sentiments from The Alliance with our deputy chair Allison Keogh quoted citing a recent study showing the total social cost of gambling harm was estimated to be almost $7 billion a year in Victoria alone.

It is also worth remembering that the 1300 NSW pokies clubs are the most under-taxed of all pokies venues in Australian states and pay no tax on the first $1 million in losses by gamblers each year. Collectively they should be paying at least $500 million a year more than the miserly $803 million they are forecast to contribute to the NSW budget in 2018-19.

Rather than materially funding roads, schools and hospitals, this amounts to less than 1% of the $81.1 billion in total revenue NSW is expecting to receive this financial year.

As Michael West has pointed out in his separate pieces on the Dee Why RSL and the giant Dooley’s Catholic Club in Lidcombe, total gambling losses at these gold-plated suburban casinos dwarf the claimed community benefit. Indeed, they can only afford to build these extravagant edifices because the pokies taxes are so low and they contribute so little back to the community, especially when compared with the $7 billion that will be lost on $10 maximum bet poker machines in NSW this year.

Having been CEO of the GTA since 2001, we think it is perhaps time that the organisation moved on from Ross Ferrar and found some new more contemporary leadership. It is telling that the GTA has an all-male board and staff, which is typical of the gambling industry.

PS. Lo and behold, Ross Ferrar's retirement was announced on the same day we emailed out this newsletter, although we only became aware of it the following day. See industry coverage here.

Clubs and pubs pushing back in NSW

The Alliance now has 19 Victorian councils on board for 2018-19 with City of Frankston the latest to join.  

It is rare indeed to meet a pro-pokies Victorian councillor, which is very different to NSW where the ruthless clubs industry deploys all manner of tactics to slow or derail long overdue reform.

Indeed, two recent, relatively modest attempts by NSW councillors to bring in some actions to address gambling harm in their communities has sparked a pushback from the industry.

Back in November 2017, Clrs Pat Daley (Lib) and Natalie Warren (Green) got a motion supported calling for a cap on pokie numbers on the Northern Beaches, and a request that staff prepare a report on actions council could take.

That well-researched report suggested a strategy council could consider. That draft went on public exhibition and over 200 submissions were made, the majority of which supported reform.

However, at least some of those submissions came in response to the local clubs sending a letter to ClubGrant recipients, giving misleading information about a non-existent threat to ClubGrants in the strategy, and asking the recipients to send in submissions against the entire strategy. The Dee Why RSL pokies club, centre of a media storm, even sent such a letter to a gambling counselling service. They were so mad to receive the thinly veiled threat, they wrote in support of the strategy.

Elsewhere, just last week the Greens councillors on Inner West Council put up a detailed and strong notice of motion, seeking everything from a cap on pokies numbers, the use of landlord powers to put clauses into new leases banning pokies from public land, to proposals to ask the NSW Local Government Association to start resourcing councils with support and research on minimizing gambling harm.

Before the meeting, the Labor councillors revealed their “better plan” - an unspecified roundtable with unspecified participants including clubs and The Alliance at an unspecified time to discuss unspecified measures to deal with “problem gambling”. We think the Inner West needs action, not another gabfest, but we’ll turn up whenever the roundtable is convened.

Busy time for applications at the VCGLR

The Victorian government’s unhealthy commitment to making sure every possible poker machine in Victoria is in operation has resulted in a wave of applications to the Victorian Commission for Gaming and Liquor Regulation this year with no sign of a slowdown.

This week, the community had a rare win with the decision on the Lynbrook Hotel in the City of Casey being released. The Commission found that a further 20 machines would likely result in “a net moderate negative social and economic impact to the well-being of the community in the municipal district in which the Premises are located if the Application is approved” and declined the application. Community opposition was a significant factor in the decision.

The Preston community were not so fortunate with a decision in favour of the Darebin RSL allowing 15 more pokies and additional opening hours. Alliance partner Darebin City Council is appealing this case to VCAT on the grounds that the application will cause further harm to a community that is already saturated with pokies.


Meanwhile, residents in Officer in Melbourne’s south-east continue to battle against plans for an 80 EGM pokies palace in the centre of their town. After a community win at the VCGLR, the case heads to VCAT later this year. This week, community members launched a poster campaign with this great poster going up around town.

We are currently awaiting decisions on two venues owned by the Castello’s group, one in Maribyrnong and the other in Pakenham. Both were opposed by councils.

Hearings are coming up for the Dandenong RSL, Leopold Sportsman’s Club, Geelong RSL, Altona RSL and Ballarat Golf Club. It appears that the unhealthy reliance of so called RSL clubs on pokies revenue could be set to increase – an example of an organisation which has lost a sense of what it stands for if ever there was one.


VCGLR decisions and forthcoming cases can be found here.

ACMA moves to ban gambling ads during live streaming of sport

The Alliance was pleased to see ACMA has finally moved to ban gambling ads during the live streaming of sport.

No advertising will be allowed between 5am and 8.30pm, as was outlined in this media statement yesterday. ACMA has also produced this useful explainer on how the system will work.

The ban will start on September 28, some 6 months after the more limited restrictions on TV advertising started on March 30.

As was revealed in our last newsletter, TV advertising spend on gambling soared by 31% in the first quarter after the so-called restrictions commenced, thanks to the World Cup and the major foreign bookies shifting their advertising to other prime time programming, such as the during the 6pm evening news.

Clearly, we have a long way to go to stop the deluge, but the belated live streaming restrictions are a reasonable start.


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 a few items that are worth sampling:

Roger Corbett: Australia's most controversial Christian
Eternity Magazine, 29 August, 2018

Holy Dooley: how Catholic clubs make a killing out of pokies
Michaelwest.com.au, 28 August, 2018

Tim Costello interview with Geraldine Doogue on pokies economics
RN Saturday Extra, 25 August, 2018

Speech by Senator Orrin Hatch on US sports betting
Senate transcript (p37), 23 August, 2018

Former Woolworths pub employee speaks out
Tweed Valley Weekly, 23 August, 2018

US casinos pull in a record $US40.2b in 2017
Reuters, 22 August, 2018

ACT clubs remain split as debate rages about pokies reduction mechanism
The Canberra Times, 22 August, 2018

More detail of Canberra's overhaul of pokies community contributions|
The Canberra Times, 22 August, 2018

Another cracking Nick O'Malley scoop on predatory ALH practices
Sydney Morning Herald, 21 August, 2018

Pokies being paused during NZ Gambling Harm Awareness Week
Scoop, 21 August, 2018

Canberra clubs to get cash for surrendering pokies
The Canberra Times, 21 August, 2018

Brian Seymour on predatory Woolies pokies tactics
The West Australian, 20 August, 2018

There are 3200 unused pokies entitlements in Queensland
Gold Coast Sun, 19 August, 2018

Charles Livingstone: Australia has a long way to go
The Conversation, 16 August, 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