Poker Machines Rule

Tattersall's and Tabcorp have filed for an extension of their exclusive (and lucrative) poker machine franchise beyond 2012 and to lift the cap on what may be 30,000 poker machines already in place around the southern Australian state. Government is clearly reluctant on both counts while gleefully looking forward to a record-breaking A$1 billion in gambling taxes this year.

The two companies have proposed in regulatory submissions to the Bracks government that their money-spinning poker machine franchises be extended for another twenty years. Tattersall's itself wants to be allowed more machines in "growth" or high-activity areas. The poker giant also painted a rosy future of "super clubs" that each house 250 of the colorful video machines. There are already between 27,000 to 30,000 poker machines spread around 540 Victoria state pub and club venues. Some quarters have expressed alarm at a poker "addiction" rate that the gaming industry admits has reached 2% of the population. From time to time, local media play up stories of poker machine losses in the millions of dollars.

To deflect criticism, the two licensees have already found it politically correct to launch the first-ever "Responsible Gambling Week" from June 20 to 26.

The same social concerns evidently underlie Gaming Minister John Pandazopoulos' marked lack of enthusiasm for the industry's proposals. Mr. Pandazopoulos has declared that no more poker machines should be installed in low-income areas and that running up the total number of poker machines just was not in the works. The government is also sensitive to criticism that it has become too dependent on tax revenue from lotto and poker machines. Taxes from gambling already comprise the third biggest revenue source, excluding Federal payments.

Mr. Pandazopoulos pointed out that Victoria has the lowest "per-capita" count of poker machines in all of Australia. He also argued earlier this week that gambling taxes came up to less than 5% of government revenue, lower than under the former Kennet government. In the next breath, he conceded that the state has the highest tax rate on gambling in the nation. "The reality is when you have a gambling industry you have to tax it, and unashamedly we are the highest taxing state on gambling products of all of Australia"

At the same time, the torrent of cash has attracted prospective competitors. Interested entrants - a Woolworths-Bruce Mathieson consortium and Racing Victoria among others - have declared that it is high time the Tatts-Tabcorp poker machine duopoly was broken.

Up for immediate review is the lottery license, which has been exclusively Tattersall's for fifty years and will expire next year. Mr. Pandazopoulos frankly sees this as an opportunity to introduce competition and foster innovation. "We believe lotteries as a product have been very flat in the marketplace. There hasn't been much product innovation. That's simply because there's been a monopoly."

September 03, 2006
Brian Nelson