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12 May 2010

Australian Pokies Auction Raises $1bn, by Greg Tingle - 12th May 2010

Pokies in Australian casinos, clubs, pubs, hotels et al remain big business.

Media Man and Gambling911 learn that down under, down Melbourne way, the Victorian Government has raised close to $1 billion from the auction of poker machine licences, but some detractors say that they should have raised more and have been short changed...

Aussie Gaming Minister Tony Robinson said $981 million had been raised during the bidding process for Victoria's 27,500 poker machines.

Most of the money will be shifted into health, with the remainder funding bushfire initiatives.

The auction for the 10-year licences, which breaks the current duopoly, ended Monday.

Bids were placed for the the auction of mostly 10-year licences to operate Victoria's 27,500 poker machines (excluding James Packer's Crown Casino).

Average prices: $31,600. To a pub the average was $39,600. A number of clubs paid as little as $5500 per "one armed bandit" in the auction and many hotels $33,500.

Depending on the venue, a poker machine can lure in $190,000 a year with some Melbourne venues making millions of dollars every year. Guess who pays... punters who are not winning!

Pubs and clubs in some regional parts have paid top dollar for licences compared with some other parts of Melbourne.

But most hotel and club owners who participated in the auction were said to be celebrating at the lower than expected prices.

"The prices paid for entitlements did not reflect returns that hotels and clubs receive per gaming machine," Colin Gill from corporate advisers Ferrier Hodgson said in a briefing to pub and club clients.

"This means that hotel and club venues that receive high revenues from each of their machines but paid the minimum price for their entitlements, have hit the jackpot."

The firm said hotels in Horsham paid $153,389 per machine and in Warrnambool the price was $130,500.

A number of industry insiders complained...with only 26,800 machines in service - 700 fewer than the number permitted - the government should have reduced the supply of machines to push up prices. They said a better structured auction could have delivered the government up to $1 billion more!

Richard Macdougall from PGM advised big poker machine operators such as Woolworths had done very well from the auction.

"I think it is a pretty poor price for the Victorian taxpayers," he said. "It seems like low prices in most of the metro areas."

But Gaming Minister Tony Robinson was unrepentant at the government's handling of the auction. "Sometimes good policy costs," he said.

The government's actions to combat problem gambling was causing a ''correction'' in poker machine spending, he said, and this had affected prices for machine entitlements.

Gambling911 and Media Man are of the belief that the proliferation other gambling choices for punters, certainly including the popularity of online casinos, slots, as well as online poker, has cut into the Australian traditional poker machine sector. In addition, Australian pubs, hotels and some casinos, have got a bit of a reputation for being rough places and many passionate punters are opting to stay home are play the pokies or online poker on the internet. Mind you, visiting a safe and friendly pub or casino can also be a very enjoyable experience.

Australia remains in the world's top 10 of countries listed in Forbes and various university studies of having the most passionate and highest spending gamblers (online and offline). Some lists rank Australia as high as number 3, but some of the Media Man researchers reckon Aussies are #1.

Online brands that are understood to be doing well in Australia include PartyGaming and Centerbet. Packer's Betfair is also looking to add slots and online poker to their portfolio. Cleopatra, Sinatra, Tomb Raider, Monopoly and Rambo are understood to be some of the most popular online slot games. Some games are also starting to hit the iphone - smartphone market, but experts say its cheaper and less risky to play the games on a machine or a normal computer.... not a smart phone, where data charges can run into 5 figures, as Gambling911 recently reported. IGT (International Game Technology) inc WagerWorks arm, is one of the biggest game suppliers for both online and offline. Profiles on many of Australia's and the world's gaming and igaming companies can be found on the Media Man website network, and the Gambling911 site also has a section dedicated to Australia and regional areas.

Punters.. er, readers, know the odds, set limits, and have 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 also publish Australian Casino News http://www.australiancasinonews.com

*The writer owns shares in Crown Limited

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