“They need to be held to account. Their business models make them more akin to mini casinos than a local pub.”
The Markets Hotel and the Wentworth Hotel are situated close to the Sydney Markets in Flemington which trades largely in cash. The Crossroads Hotel,also a consistently high gambling earner,was bought for $160 million in 2022.
Hotels are permitted to operate a maximum of 30 machines,unlike clubs that can operate an unlimited number and include RSLs with more than 700 pokies.
Industry observers say this means that the pokies in pubs are harder working,while many machines in the clubs sit idle for long periods,adding to the allure of choice.
Gaming Consultants International managing director Neil Spencer said pubs had an advantage by being situated in wealthier parts of Sydney,while clubs predominantly operated in the outer suburbs and regions. The averages for the club sector were also distorted by a small number of clubs with a large number of machines. Most clubs had very few or zero machines.
“A club can afford to have many more machines than it needs,so when you walk in you will probably find a machine,whereas in pubs,the utilisation rate is much higher and the turnover of customers is much higher as well,” Spencer said.
Savvy hoteliers are also buying several pubs in the same towns and then consolidating the poker machines at venues that have the longest trading hours. Publican Jim Knox bought three hotels in Griffith and a bevy of hotels in the New England region between 2019 and 2022 (including all five hotels in Moree) and then attempted to increase his gaming machine entitlements at some venues while transferring entitlements to them from other pubs within the portfolio.
The Independent Liquor and Gaming Authority only consented under strict conditions,to which Knox objected,and thematter resulted in legal action. The NSW Court of Appeal confirmed in September that the authority had the discretion to apply harm minimisation measures.
Knox declined to comment.
Similarly,Wentworth Hotel obtained approval to extend trading hours in 2018,and subsequently sought to build a second pub in the car park with an additional 20 machines,but was knocked back by the authority. Gambling revenue is typically higher between the hours of midnight and 3am.
The hotel group that owns the Wentworth has separately beensanctioned for allowing customers there to withdraw cash on credit and for building a doorway between the gaming rooms of two neighbouring pubs in Surry Hills to create one giant gaming floor.
A former pub licensee who asked not to be named out of fear for his personal safety said gaming room staff were incentivised to maximise gambling revenue with bonuses of up to several hundred dollars for high turnover during their shifts.
They set up WhatsApp groups to advise regulars when machines were due to jackpot,illegally brought complimentary food and drinks to them at their machines and allowed them to transfer money to their personal banking accounts to use in the machines when they hit their ATM withdrawal limits. They also ignored the self-exclusion register for people who recognised they could not control their gambling impulses.
“They greet people,‘Long time no see! How have you been?’” said the man,whose pub was one of the top gambling venues in Sydney’s CBD. “And they will bring out drinks and cigarettes.”
Some pubs also did lock-ins for people who wanted to keep gambling after closing time,he said.
In 2019,the regulatordisciplined two North Coast pubs for giving gamblers free drinks and compiling personal information on them to encourage them to gamble for longer. Woolworths,the majority shareholder of the company that owned the pubs,later divested its gambling assets.
The Morning Edition newsletter is our guide to the day’s most important and interesting stories,analysis and insights.Sign up here.