Woolies nearly out of pokies part 2 - Alliance for Gambling Reform

Endeavour pubs in NSW

Woolies nearly out of pokies - part 2

It took more than two years and ended more with a whimper than a bang, but in July 2020 Woolies-owned ALH (now Endeavour) pubs were found to have illegally provided free alcohol to people to encourage them to gamble more. Again, the investigations were sparked by whistleblowers, taking evidence to Andrew Wilkie (Independent MP in Tasmania) and Justin Field (Independent MP - former Greens, NSW) about how managers demanded that staff record people’s gambling behaviour, take notes on their food and drink preferences, and supply free alcohol in order to keep them gambling more and for longer

After the allegations were public, ALH did an independent review and then self-referred 53 NSW venues to Liquor and Gaming. The L&G compliance teams, after over a year, ended up only referring Westower Tavern in Ballina and South Tweed Tavern to the regulator (ILGA). The manager in question was banned from the industry in NSW for 5 years, which doesn’t mean much because he works for ALH in Queensland. And in Queensland, it’s perfectly legal to ply gamblers with free booze! Interestingly, neither venue remained in the ALH/Endeavour holdings.

The NSW regulator (ILGA)  spoke bluntly about how the legislation prevented them from fining the manager, and ALH generally, for behaviour that was clearly directed by the senior management. Two licensees copped small fines (paid for by ALH), the two pubs were closed for two weeks, and ALH had to pay $172,000 in costs. Small beer, you could say.

What’s the current position of ex-ALH, now-Endeavour pubs in NSW? We did some analysis. You can find the full list here (as at March 2021) .

Let’s be fair - the group branding of each pub’s online website has no mention of gambling rooms, and each has a link to the ALH Group’s responsible service page (Endeavour Group’s version here), where, among other things, they note they don’t provide complimentary alcohol in any gambling room (wonder what sparked that?). And currently, many of the pubs highlighted Dry July with a Cheers to Zero promotion. [If you happen to notice any of the Group pubs breaching their responsibility charter, do let us know.]

But it’s not so fun when we look at poker machine impact and losses.

There are 1,335 Endeavour owned pokies in NSW, from the far north to Eden in the south. But they aren’t evenly distributed. You’d expect their pub locations to be proportional across the state, taking into account the known impacts of poker machines, if they took responsibility seriously. Here’s what they really do. These “band” names are arbitrary divisions of the state created by Liquor and Gaming based on socio-economic disadvantage and poker machine densities, with Band 3 so affected that no more poker machines are allowed in:

 

Band

Nr of pokies

Difference from expected

Estimated losses taken per year**

Band 1

458

32% less

$48 million

Band 2

403

1% more

$48 million

Band 3

474

78% more

$117 million

 

Endeavour ensures that their pubs are disproportionately located in the most disadvantaged areas of the state, where poker machine losses and density are much, much higher than the average. Over 50% of their profits from poker machines come from these areas, which in fact are only around 20% of the state. This is predatory behaviour.

Of their 52 pubs, one is open 24/7 (Narrabeen Sands), and a further 12 have opening hours, at least part of the week, significantly longer than the standard 10am-midnight hours. Although NSW claims to have a daily 6 hour close down of poker machines, venues like the Crows Nest Hotel, Colyton Hotel, Penrith’s Pioneer Tavern, and the Belfield Hotel have only 3 or 4 hour shutdowns (from 6am to 9am) on the weekends. Altogether, 64% of their pubs are open after midnight. 

As far as we can estimate from the poor data Liquor & Gaming supply, only 3 pubs earn less than $1million a year from their pokies, and some are earning over $9million.

Endeavour has already started expanding in NSW by buying a pub in the Sydney northern suburbs, (not included in analysis) so we don’t expect it to get better.

And Woolworths remains a significant shareholder in this business. Family friendly? We don’t think so.

It’s even worse in Victoria - see part 3.

 

** if you’re really keen on data, read our blog on how we get these estimates for NSW