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10 April 2010

Australian Pokies Sports Club Connection, by Greg Tingle - 10th April 2010

Australia remains one of the world's biggest gambling nations.

We investigative and learn that some patches of corporate Australia are getting into the pokie business, lured by massive revenue opportunities, while anti pokie activists fight back.

It's a mix of politics, beer, cigarettes, bible bashers, sports clubs, spin and money...lots of it. Enjoy! Media Man and Gambling911 probe the situation...

Anti-pokie activists are calling on gaming revenue tax discounts for clubs to be stripped, claiming the "community benefits" provided by clubs are B.S.

Independent Senator Nick Xenophon, the Reverend Tim Costello and activist Paul Bendat are calling for the tax break to be stopped.

Australian Leisure and Hospitality Group (ALH), a J.V between Woolworths (The Fast Food ... er, Fast Cash People) and pokies kingpin Bruce Mathieson, struck business deals seeing 660 plus one armed bandits in up to 10 major venues registered as clubs.

Footy clubs Collingwood, Richmond, Western Bulldogs and Hawthorn football are in on the action (the take).

The current Victorian gaming law states commercial operators of pokies pubs must pay a 33.3% tax on gambling revenue. The 33.3% is a key reason governments won't give up pokies, says detractors.

Clubs on the other hand snatch 8.3% discount on the pokies tax and pay 25% to the State Government (if they can demonstrate a "community benefit"), even including employee pay, operating costs and TV's for patrons.

"This is clearly debatable and I think it's scandalous that the Woolworths joint venture is greedily exploiting pokies club tax breaks and the Victorian Government needs to close this loophole soon," Senator Xenophon stressed.

"This highlights the difficulties with the concept of community benefit is when the money is being made off the backs of problem gamblers.

"The great irony here is that people hooked on the pokies can't even afford to buy the groceries that Woolworths sells."

Costello said governments promoted pokies as good things because of the tax revenue they generated.

"But now we see there is effectively unethical tax avoidance going on," he said.

ALH owns the venues and leases out the pokies area to the clubs. It then charges the sports clubs rent and a "management fee" to operate the machines.

A search of Victorian Commission for Gambling Regulation documents shows lion's share of the revenue goes to ALH. Not all the financials show up however.

The business arrangements between the clubs and the ALH are totally legal, but detractors advised they are averting taxes.

Community Benefit Statements do not require a full accounting of all payments.

Monash University gambling expert Prof Charles Livingstone, who has studied the community benefit claims of AFL clubs, said: "Expenses of operating venues, including wages, direct and indirect expenses and fixed assets, amounted to more than 94% ($12.73 million) of the value of community benefits claimed by AFL-operated club venues."

"Clearly charitable or philanthropic expenditures amounted to $462,264, a little more than 3.4 per cent of claims for community benefit".

Pokies activist Paul Bendat is calling on Woolworths' shareholders to question their company's involvement in the gambling industry.

"Woolworths should not be in the pokie business," he said.

"It has nothing to do with their core retail objectives. Woolworths's exploitation of these tax breaks is a disgrace."

The Australian Productivity Commission report into Gambling is due to go into the public domain any day now, however the Government is late again, just as they were with their proposed internet filter, much to the delight of the gaming media and news media who are having a field day take the Rudd - Conroy duo to task on an every increasing frequency.

Australian land based casinos also enjoy generous tax breaks and incentives, with most insiders agreeing James Packer, Crown Casino king, gets the best deals, including a rumoured $1 per year rent - lease on the Crown site in Melbourne. If you can get a great deal, take it.

May you have good punting on the pokies, fruit machines, slots, or whatever the lingo is in you're neck of the woods. Bet responsibly and keep it fun.

*Greg Tingle is a special contributor for Gambling911

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company

*The writer owns shares in Crown Casino

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