Sure,December 2028 is too late,but by now in the NSW electoral cycle,both parties have normally signed a memorandum of understanding with ClubsNSW committing to do absolutely nothing to reduce pokie losses – which are running at $7 billion a year.
Despite the proposed gambling reform,the share price of poker machine giant Aristocrat has soared by 20 per cent since January.Flavio Brancaleone
But with both sides shunning the MOU straitjacket and Chris Minns’s Labor still yet to decide whether to match,let alone better,the Perrottet play,here are a few other suggestions for pokies policy options leading into the March 25 NSW election.
Firstly,set a revenue reduction target. The clubs and pubs never publicly explain why the NSW community needs to lose a staggering $7 billion on the state’s 87,000 poker machines to keep them viable and maintain all those jobs and grants they crow about. In per capita terms,this is more than any other jurisdiction in the world. Couldn’t they make do with $5 billion?
Secondly,why does NSW need to retain Australia’s most high-intensity machines with a $10 maximum bet? The Productivity Commission twice recommended a $1 maximum bet. Victoria went from a $10 maximum down to $5 with not too much trouble 15 years ago,meaning that you can only south of the Murray but $1200 an hour across NSW. Put simply,NSW machines are more dangerous in terms of the size of losses. Put some speed limits on them,beyond the cashless card which will,commendably,allow for gamblers to set their own limits.
NSW Premier Dominic Perrottet and Opposition Leader Chris Minns have differing approaches to gambling reform.Renee Nowytarger,Dominic Lorrimer
Third,get serious about trimming the enormous NSW pokies fleet above and beyond the token 2000 machine reduction that both sides are currently proposing.
There are two sensible ways to do this. The first is through a voluntary buyback mechanism linked to the introduction of cashless pokies. If clubs and pubs don’t want to invest in safer machines that prevent criminal money laundering,let them sell their licences back to the government before the end of 2028. Don’t force anyone to sell but set a decent reduction target of up to 20,000 machines and give it a serious budget,such as $500 million.
The second longer-term option is to end the peculiar NSW rort of perpetual pokies licences. Victoria is in the midst of raising $1 billion in additional licence fees from pubs and clubs when their 10-year licences expired in August 2022 and the government issued new 20-year licences. Broadly the Victorian licence fee equated to about six months of revenue,which in NSW terms would raise around $3.5 billion. If the NSW government declared that all existing licences would continue for free until expiry in 2033,it would create a jumping off point and a revenue-raising opportunity to get numbers down below 50,000. Again,no one would be forced out,but they would pay a bit more to stay in.
The National Party clearly used their leverage in cabinet to extract some generous transition payments for regional clubs. There’s a better way. If regional pokie clubs are worried about their viability,they should hand the keys to their local council.
Local clubs are owned by the very same ratepayers that are their members,although club membership fees are negligible relative to rates because the business model relies on a small number of addicted gamblers losing enormous sums of money.
Thanks to NSW clubs paying the lowest pokies taxes in Australia,there is more than $10 billion of assets sitting on their balance sheets. Councils and their communities would benefit from adding those assets to their balance sheets and would have the financial strength to dial down the reliance on pokie revenue while keeping the golf courses,bowling greens,tennis courts,cricket ovals and rugby fields open to the public.
Perhaps the best indicator of the relatively low overall impact of Perrottet’s policy is shown by the reaction of investors in Aristocrat Leisure – which supplies about 50 per cent of Australia’s poker machines. Aristocrat shares are up 20 per cent so far this calendar year and hit a three-month high of $36.45 on Friday,giving it a market value of $23.3 billion.
That wouldn’t have happened if there was a half-decent bipartisan agreement to reduce machines numbers in NSW. Instead,cashless gaming on the existing fleet will arguably boost Aristocrat’s profits,given that every machine in NSW will need to be reconfigured and many cashed-up clubs will just decide to buy new machines,at more than $25,000 a pop.
Aristocrat shares were,valuing the company 27 years ago at just $303 million. Since then,more than $100 billion has been lost on NSW poker machines,further enriching the founding Ainsworth family which still own more than 10 per cent of the company and have amassed a fortune estimated at more than $5 billion. They can afford to give a bit back.
Interestingly,Aristocrat is one of the largest suppliers of poker machines to the seven venues owned by the ALP in the ACT and Sydney,through the Randwick Labor Club and the Canberra Labor Club,which have together amassed balance sheets with combined net assets of around $120 million. No other mainstream political party in the world runs gambling dens to support their operations,but this might go some way to explaining why NSW Labor is so reluctant to get with the reform program.
The final piece in the puzzle for successful gambling reform in Australia will come when there are apologies in parliaments across the country for state-sponsored abuse,and compensation funds established for those whose lives have been destroyed by addiction.
That’s a long way off,but Premier Perrottet has made a historic first move,and it’s now up to Labor,the teals and the rest of the NSW political community to finally stand up and protect their community after decades of capture by a ruthless and predatory industry.
We didn’t allow the tobacco industry to dictate policy in NSW,and it’s time to treat the damaging gambling industry in a similar fashion by embracing a range of policies far broader than just shifting to fully cashless pokies more than five years from now.
Stephen Mayne is a former spokesperson for The Alliance for Gambling Reform,a local government councillor in Victoria and is standing for the board of Aristocrat Leisure at their February 24 AGM on a platform that they embrace cashless pokies.
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