Despite reform push, Labor is still married to the gambling industry

After two years of COVID interruptions, Australians are expected to have lost the usual $25 billion to the gambling industry in 2022, once the final figures are tallied.

And despite Australians easily being the world’s biggest gamblers in per capita terms, Anthony Albanese and Daniel Andrews — two of the most successful Labor Left leaders of recent times — have just received thumping majorities to do… very little when it comes to tackling this scourge.

However, despite the lack of gambling promises or debate during the Victorian and federal elections, 2022 wasn’t a total lost cause for gambling reform. The Tasmanian Liberals blazed the trail with a promise to introduce a fully card-based pokies system by the end of 2024, with mandatory pre-commitment limiting gamblers to daily losses of $100 and a maximum annual loss of $5000.

NSW Liberal Premier Dominic Perrettot was impressed with this move, and after a NSW Crime Commission report revealed that money laundering was endemic in pokies across NSW pubs and clubs, he also publicly committed to cashless gaming cards.

Alas, despite considerable pressure from church groups, an energetic Sydney Morning Herald campaign, and Unions NSW boss Mark Morey and even John Howard as recently as yesterday, the NSW Labor Party remains firmly married to the pokies crowd. Plus, NSW Opposition Leader Chris Minns is resisting all requests to join Perrettot on a unity ticket to tackle gambling harm ahead of the March 25 state election.

As Crikey has reported previously, the ALP has been responsible for a clear majority of the historical regulatory and political decisions that unleashed Australia’s gambling beast. For example, it was the Northern Territory Labor government that recently decided to give News Corp and gambling “Rich Lister” Matthew Tripp a licence to launch their BETR outfit into the already over-crowded online bookmaking industry.

With no fewer than 30 different bookmaking and betting exchange outfits licensed by the low-taxing NT Racing Commission, you’d think they might call time at some point and declare a moratorium on new licences.

The Labor Party also remains directly invested in the gambling industry, having built up net assets worth $45 million in the Randwick Labor Club as of 2021 (see page 7 of 2021 annual report), a multi-venue pokies operator 100% owned by the NSW branch.

And Anthony Albanese had no qualms about officially launching the Mercure Belconnen in February 2020, a $50 million 4-star hotel that the Canberra Labor Club was able to build off the profits from its four different pokies venues in the nation’s capital.

The 2020-21 Canberra Labor Club’s annual report states on page 27 that it had $81 million in total assets in 2021, but the net asset position was only $41.7 million because it borrowed heavily from the ANZ Bank to build the Mercure Belconnen.

One of the challenges for gambling reformers is the capture the industry has over key institutions. For instance, if the Catholic Church, the RSL and the Labor Party had big investments in the tobacco industry comparable to their exposure to the pokies industry, do you think Australia would have the world’s toughest tobacco laws and the lowest smoking rates?

However, at least some of the powerful gambling billionaires are getting out. James Packer sold his 37% stake in Crown Resorts to New York-based private equity giant Blackstone in June last year, collecting a hefty $3.3 billion farewell cheque. A few weeks later, even Packer himself was publicly getting stuck into Clubs NSW for unconscionable conduct in suing money laundering whistleblower Troy Stolz, who has terminal cancer.

Packer was lucky that Blackstone didn’t walk away from its $13.10-a-share offer, considering the fines and tax increases keep coming following three unprecedented state-based inquiries into Crown Resorts.

Indeed, shares in Star Entertainment plummeted 30% after NSW Treasurer Matt Kean ambushed it a week before Christmas by announcing permanent tax increases, which will raise $364 million over three years from Sydney’s two casinos. If only Kean would do the same to NSW Clubs, which enjoys the lowest pokies taxes in the country.

Star Entertainment has 75,000 retail shareholders who remember the days in 2018 when the stock traded above $6. Many of those small investors trusted the NSW, Queensland and Victorian governments to treat them fairly when they floated their various TABs in the 1990s. Unfortunately for them, the casino industry is now politically friendless and suffering multiple attacks from embarrassed state governments that failed to regulate them properly for years.

Woolworths has potentially seen the writing on the wall for the toxic pokies industry; it demerged its enormous pokies business into Endeavour Group in 2021, retaining a 14.6% stake, supposedly in order to balance the interests of its aggressive pokies billionaire joint venture partner Bruce Mathieson who also owned 14.6%.

That didn’t last long. Mathieson has been adding to his holding while Woolworths dumped 5.5% of Endeavour at $6.46 a share for $636 million shortly before Christmas, but retained its single seat on the board, for now, despite reducing its stake to 9.1%. Endeavour shares closed at $6.26 yesterday as the spectre of cashless pokies and Tasmanian-style gambling limits looms large over the profits it generates from around 12,500 pokies in 300 venues across the country.

Finally on the gambling front, in 2022 federal and state regulators thankfully agreed to ditch the ridiculous “gamble responsibly” sign after thousands of TV and radio ads polluted the federally regulated airways at all hours of the day.

Come March, the industry will have a choice of seven tougher sign-offs, including: “Chances are you’re about to lose”; “Think. Is this a bet you really want to place?”; “What’s gambling really costing you?”; “What are you prepared to lose today? Set a deposit limit”.

Surely some decent limits on gambling advertising would be more effective. But at least this is another example of progress in a better-than-normal year for those campaigning to curtail Australia’s all-powerful gambling industry.

Disclosure: Stephen Mayne is a shareholder activist and gambling reform campaigner who had a one-hour meeting with Neil Chatfield, the chairman of Australia’s biggest pokies manufacturer Aristocrat Leisure, at the Sydney offices of Freehills this morning, discussing the upcoming director election arrangements at the company’s February 24 AGM.