Woolies nearly out of pokies - Alliance for Gambling Reform

Still cashing in

Woolies nearly out of pokies - part 1

Woolworths has tried to make a virtue of its very belated decision to sell off the drinks and poker machine business it co-owned with Bruce Mathieson, as the Endeavour Group. But it still owns 14.6% of the business, and in Victoria alone, those pokie pubs are structured to allow 24/7 gambling, and they take far more money than nearby venues.

We’re doing an update on the Woolies’ pokie position and how those pub pokies are still contributing to the Woolies bottom line. Here’s part 1, especially if you’re new to this.

One of the foundation campaigns by the Alliance was to add to pressure on Woolies to divest from poker machines. This included a spectacular run for a seat on the Woolworths Board by Alliance board member Susan Rennie in 2017. How does a family friendly supermarket brand end up with 12,364 poker machines? It starts off wanting more bottle shop, because it owns Dan Murphy’s and BWS. But in Queensland, to own a bottle shop, you need to own the nearby pub. And those pubs were full of pokies. Quick to learn, Woolies realised what money spinners poker machines are. 

Stephen Mayne, working as a shareholder activist and Crikey commentator, had been drawing attention to Woolies from as early as 2008. As an Alliance staffer at a crucial stage in the campaign, he kept the pressure up at shareholder meetings and via the media. Our NSW campaigner, Kate da Costa, using a Mayne proxy vote, was able to force the Chairman to admit at the 2019 AGM that investment funds are not so keen on gambling when it comes to ESG decisions (environmental, social, governance factors), pushing the decision of the Board to divest. Woolworths announced in 2019 it would restructure to get out of the poker machine business. Kind of.

Woolies actually owned the ALH (Australian Leisure and Hospitality Group) hotel empire jointly with the Bruce Mathieson Group, and the demerger of the Drinks and Pokies group involved first a restructure, then a sell-off. From 24 June 2021, the Endeavour Group now exists as an independent entity, 14.6% owned by Bruch Mathieson Group, 14.6% by Woolies, and the rest at listing owned by Woolies shareholders who got a 1 for 1 deal. 

As financial commentators note, it will always trade below market value, because ethical investors steer clear of alcohol and gambling.

How are those Endeavour pokie pubs operating? See part 2 of the blog.

Woolworths logo changed to read The Pokies People