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02 November 2010

Australian Gambling News, by Greg Tingle - 2nd November 2010

Punters, entertainment and celebrity news junkies, casino and media millionaires and billionaires, and one and all. It looks like we're in for another huge week. We've got more on James Packer and Shane Warne at the celeb poker game at Crown Casino, Tatts eyeing off Tabcorp, John Singleton and friend buying into Aussie pubs with a pokie palace VS non pokies twist, Mildura Casino proposal still alive, and if you happen to be an Aussie, Melbourne Cup Day Media Man and Gambling911 start your week off right with another jam packed edition of Australian gambling news...

Mildura Casino Proposal Still Alive; Not Dead Yet!...

The ALP says a proposal for a casino in Mildura is not dead, despite the Coalition and Greens refusing to support it. The Government has always indicated the casino would require bipartisan to go ahead but the Opposition parties now say the social costs are too high. However, the ALP's Member for Northern Victoria, Candy Broad, says an interdepartmental inquiry looking at the $400 million project will run its course. "We believe the Nationals and Liberals are letting down Victorians in the Mildura region by refusing to even support an investigation into the social and economic impacts of the proposal," she said. "The fact is that no-one can be certain what the social and economic impacts of this proposal are until they have been assessed. "It remains our view that this proposal could potentially create jobs and investment in the area, that is why we set up an interdepartmental [inquiry] committed to look at the proposal and evaluate its impact on the Mildura region - we intend to continue with that investigation."

Racing Sector Compensated For Online Betting!...

South Australia's racing industries have reached a settlement they say will ensure them adequate compensation as punters increasingly turn to the internet to bet. Bookmaker Sportsbet has dropped legal action that was blocking payments being made to horse and greyhound racing in SA. Thoroughbred Racing SA estimates the breakthrough will mean an annual return from all online bookmakers of approximately $5.5 million annually for its operations. Chief executive Jim Watters believes the success of the negotiations was critical for prize money and the future of racing generally. "Without the introduction of that (payment) very seriously it was going to undermine the racing industry in South Australia," he said

James Packer - Lachlan Murdoch Media And Gambling News...

The news appointment of James Packer and Lachlan Murdoch to the board of directors at the Ten Network added a new and complicating twist to the Australian Competition and Consumer Commission's examination of the impact on competition following Packer's share raid on the television network. It also raises questions about the effectiveness of cross-media ownership rules as the media platforms continue to blur and players take stakes in various listed and non-listed media companies and assets.
It is understood that the news of Murdoch's appointment to the Network Ten board has prompted the ACCC to widen its scope to include Murdoch's private and family interests in the media, which includes News Corporation. It also means the ACCC will look at how NBN Co fits into the mix, given Siobhan McKenna, who is a managing partner of Murdoch's privately held company Illyria, sits on the NBN Co board. Packer and Murdoch have joined forces before, including in the failed One.Tel and a botched attempt to privatise the Packer-controlled pay-TV investment company Consolidated Media more than two years ago. Their arrival on the Ten board comes as the government is on the verge of a new draft of the anti-siphoning regulations that dictate the carve-up between pay and free-to-air TV of certain sporting events. This is crucial to Fox Sports, which is jointly owned by Packer and News Corp, and the pay TV operator Foxtel, which is 50 per cent owned by Telstra, 25% owned by the Packer-controlled Consolidated Media and 25 per cent by News. From the point of view of the ACCC, Fox Sports competes with Ten's digital sports channel One for sports rights. One will cost Network Ten more than $20 million over the next year. If this is phased out, it will be one less competitor bidding for sporting rights. It is an indication of how incestuous media is becoming. Kerry Stokes controls Seven Network and West Australian Newspapers and has a significant stake in Consolidated Media. Murdoch sits on the News Corp board, has 9.8& of Prime TV, which is a Seven affiliate, and he bought half of DMG Radio last November. The ACCC chairman, Graeme Samuel, said last month that the watchdog was interested in the consequences of Packer taking an 18% stake in Ten, rather than his actual shareholding. ''It's controlling influence over a company's affairs that's far more important,'' he said. Samuel's concern was that Packer might have bought 18% of Ten, but there were three other shareholders on the Ten share register who have said they were supportive of Packer: WIN TV's Bruce Gordon, who has a 13 per cent stake, and the fund managers Perpetual and Paradice, with combined holdings of almost 15 per cent. Thus his actual control could be far greater. With this in mind the ACCC sent letters to various parties and asked them to communicate what they were doing. This will now be extended to Murdoch. The ACCC is conducting its review of Ten on the ''hypothetical assumption'' a combination of shareholders may vote together to control Ten, and what they then might do that could lead to changes in company strategy that could have an impact on competition. On this basis the ACCC will look at the impact of the purchases of content, the supply of content and advertising. If it finds that there is a substantial lessening of competition from the arrival of Packer and his hypothetical takeover of Ten, it has the power either to ask a court to order the sale of the shares under section 50 of the Trade Practices Act or take court orders to stop certain transactions taking place. Packer wants Ten to focus on viewers aged 16-39 - Ten's old target market - as well as sell its outdoor advertising business and change its strategy for its digital channels One and Eleven. Using one of Ten's high-definition channels to broadcast Sky News is also believed to be part of the strategy. One observer said: "Packer and Murdoch will say they don't control Ten … but Nick Falloon didn't cease an executive role just for fun … and clearly Packer will downsize Ten sports." If Packer and Murdoch can get away with it, it will be a media coup at a modest price of $300 million. However, the deal is a bit of small fry in comparison to Packer's main game: gambling, and the opportunities about to be presented with the break-up of Tabcorp. It's clear that Packer thinks Crown is undervalued. Last month he spent $200 million lifting his stake to 43%. Crown's market cap is $6.3 billion, valuing Packer's stake at just under $3 billion. Tabcorp's casino business includes Star City, Jupiters Gold Coast, Jupiters Townsville and Treasury in Brisbane. Its overall market cap, including its gambling, wagering and casino business, is $4.5 billion. Gambling and media are two industries that are riding a roller coaster and you can bet the ACCC will continue to watch both closely.

Pokies Should Show Odds Of Losing; Not Winning!...

Pokie machine operators should be forced to display the odds of winning and losing on every machine, an Australian mathematician has gone on record with. Victoria University's Tristan Barnett, who has spent years calculating poker machine betting odds, is calling for legislation to be changed to protect consumers and help problem gamblers. His latest research, set to be published in the Gaming Law Review and Economics, has found in one hour of play on a $1 poker machine, at 18 spins per minute, the expected loss for a player is $108. But he says there is a 35% chance of losing more than $300. "Giving those extreme statistics might change the decision of the consumer and how long they might actually play for," he said. Dr Barnett says statistics on profit/loss odds are currently too hidden. "The workings or the mechanics of the poker machine are driven by the mathematics and consumers are not given that information and that information is not even available," he said. "Poker machines are the only casino game where you can't calculate the complete set of mathematics - the information is just not available." Dr Barnett says pokie machines mislead consumers by only showing how much gamblers have won and not how much they have lost. "You've got to take into account the amount you've actually put into the machine and the amount that's actually being returned - they need to be combined together with the total profit," he said. "Say if a player was to bet $10 on a machine and if they were to get a return of $7, the machine would actually display a win when it's actually lost money. "The machine should actually indicate when they've actually won money and when they've lost money. "It's not realistic - it's actually misleading and unfair." Dr Barnett says even though pokie machines have to show the per cent house margin - how much the machine will take in the long run - that is not enough to properly inform consumers. He says the per cent house margin is generally about 10%, but it is as high as 17% in New South Wales. He says manufacturers deliberately avoid properly informing consumers. "It's to do with the marketing. Obviously the manufacturers want it to look as if these machines will be a good experience and they tell the consumers they're winning as much as possible and they're not actually indicating how much they're losing," he said. "And, of course, giving the information that losing more than $300 is a high per cent chance isn't a very good incentive to play the machine. "So to some extent it is misleading and consumers are being taken advantage of." The chief executive of the Australian Gaming Machine Manufacturers Association (AGMMA), Ross Ferrar, says its members' machines display all the necessary information required by law. "Our members' gaming machines comply with all the standards that are required by states," he said. "It varies state by state." Ferrar points to Victoria, where certain information is required on player screens, like the probability of winning top five, and he says AGMMA's members comply with such rules. Stay tuned for more.

John Singleton And Mark Carnegie Buy Bellevue Hotel; Pokie VS Entertainment Debate...

Aussie advertising and horse racing king John Singleton and investment banker friend Mark Carnegie are set to add to their pub empire with the purchase of Paddington landmark (in Sydney) The Bellevue Hotel. The famous watering hole in Hargrave Street is owned by well-known chef Damien Pignolet. His co-owner, psychologist Ron White, passed away in May while on a walking holiday in Britain. The pair bought The Bellevue from publican Susie Carleton and political lobbyist Eric Walsh for $5.5 million in 2004. Under Carleton and Walsh's 25-year stewardship, The Bellevue was a renowned Labor party haunt, the scene of wild celebrations for former Aussie PM Paul Keating's ''True Believers'' victory and an even wilder one to celebrate the life of Labor stalwart Mick Young. The purchase price for The Bellevue has not been disclosed as yet. Singleton and Carnegie have bought a string of hotels this year including Kinselas in Darlinghurst for $12 million and the Manly hotel The Steyne for about $28 million. They also bought the Peakhurst Hotel earlier this year from bankrupt publican Richard Wynne for about half the $20 million that Mr Wynne paid for it only a year earlier. The pub investments are being done through Carnegie and Singleton's bankrolling of the Riversdale group, run by Paddy Coughlan and Rod Kelly. The hotel industry has slumped over the past 18 months. Many hotels have been selling for greatly reduced prices. According to Coughlan, many publicans have relied too heavily on profits from poker machines and have not paid enough attention to hospitality. The consortium's plans for Kinselas include refurbishment of the upstairs bar and the opening of an entertainment venue on the third floor. It is likely that Singleton and Carnegie will add more pubs to their impressive portfolio. Coughlan said the group had between $50 and $100 million to buy distressed hotels. ''Once we reach our initial target of $100 million we plan to take the distressed pub fund public with the backing of our consortium and investors,'' Coughlan has said previously. Singo is understood to have an interest in getting into the online gambling sector and raping up the horse racing sector on the internet, and Media Man will be putting forward a proposal on this in the coming months. Watch this space.


Australian Gambling Wars: Tatts Group Eyes Tabcorp!...

Tatts Group chief Dick McIlwain has confirmed his company's interest in acquiring Tabcorp's wagering and gaming business. He revealed that he would be closely monitoring his rival's planned demerger over the coming months. Speaking outside the Tatts AGM a couple of days ago, McIlwain said the two companies had held numerous discussions about potential transactions over recent years but had failed to agree on price. "Obviously, part of (Tabcorp's) business -- the gambling business -- is of some interest to us. It's the same kind of business as us," he told News Limited "It's got to happen first. We've got to see the consequences of (the demerger) and what it does for the share price of the ongoing part of the business. We're not in any hurry." Shares in Tabcorp have risen strongly since the company last week announced its plan to split its casinos business from the main gaming and wagering group. Several analysts say the move will position the company for a takeover. Mr McIlwain agreed that the demerger had merit, pointing out that the business of running casinos and hotels, which typically required significant ongoing investment for facility upgrades, was different to running a gambling business where cashflows and earnings were more reliable. "What it does do is it makes it easier for investors to choose. It makes it easier for shareholders and makes it easier for acquirers as well," he said. While Tatts only recently completed its acquisition of NSW Lotteries, which it expects to contribute a further $120 million in operating earnings by 2014, Mr McIlwain said a sound balance sheet ensured the company remained "opportunistic" and "acquisition-enabled". Tatts recently reported a $119m profit for the year to June 30, down from $277.4m the previous year on the back of a writedown to its loss-making British gaming venture Talarius. Following a tough period for most companies exposed to discretionary spending, signs of renewed confidence in the economy were starting to emerge, Mr McIlwain said. "Consumers, punters, players . . . have started to put their hands deeper into their pockets now," he said. He told the meeting that revenue and profits across the group had improved since July 1. And while he noted that the analysts' consensus was for underlying operating earnings to increase from $560m to $650m in 2011. It appears there's a strong chance that Tatt's will grab Tabcorp's wagering business, but this may take months or even over a year to happen. First the demerger, than things should fall into place.

Melbourne Cup Day Line Up...

Happy Melbourne Cup Day. Here's the tip. Punters, media and and insiders have backed So You Think to do today what no horse has done in the 150-year history of the Melbourne Cup. Trainer Bart Cummings' latest champion will start the warmest Cup favourite in 39 years and is entitled to start odds-on according to two of Australia's most respected form experts. The Melbourne Cup is regarded as the main event on the Australian racing calender, and is also thought to be the hardest to pick a winner! It's a bookies dream (usually)

James Packer, Warnie, Celebs Play And Party At Crown Casino...

Well, Derby Day might have been a wash out, but Crown Casino is on fire. Today's is Australia's 150th Melbourne Cup, but Crown seems to be getting more than their fair share of headlines thanks to the Packer / s - Warnie and friends collaboration and celeb poker tourney. The Crown Poker Room (home of the Aussie Millions Poker Championship), played host to the annual ''Joe Hachem and Shane Warne Charity Poker Tournament''. Promo talk has it as as the most prestigious fund-raising poker event on the social calendar, which is about on the money. The happening nets in Australia's most successful players (Hachem, Emad Tahtouh), high-profile sports stars (Warne, Gary Ablett, Kevin Muscat, Aaron Hamill), influential business leaders (James Packer, Andrew Bassett, Michael Kroger, Andrew Fox, Jeffrey Browne), and celebs from down under's Aussiewood (Jason Dundas, Kris Smith, Michael Gudinski, James Matheson, Fifi Box). They are looking to raise more than half a million bucks for sick and needy kids in Australia via The Shane Warne Foundation. Media Man understands that more than 350 punters paid $1000 each to take a seat at this event. The Packer family and the super A-list spent Saturday night at their traditional karaoke party, which is nestled away in one of the finest, most exclusive parts of the casino. As you might imagine the Victoria Racing Club is praying for much better weather today for The Cup after Saturday's raining cats and dogs which turned Flemington's Birdcage and many of its guests into quite the country barn yard, with jokes among patrons and staff of mud wrestling, Noah's Ark, Mission: Impossible, Water World being a bit of light relief. We'll be getting back to our vast and loyal readership with more from Crown Casino and the tourney very soon, so stay tuned. Well done Crown Casino, Packer, Warnie and all you 'Aussie Gumleaf Mafia' out there. It's a been a huge week in the world of casino and poker news, and we're pleased to finish on this high note.

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Wrap Up...

Readers... er, punters, how did you like our report today? Who's looking good for the Melbourne Cup? Any favorite games we should know about? Tell us in the forum.

If you have a bet, please bet with your head, not over it, and for God's sake, 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. They cover a dozen industry sectors including gaming and offer political commentary and analysis.

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