There were always dangers in the expensive battle Woolworths and its CEO, Roger Corbett, waged last year in an attempt to control Australian Leisure and Hospitality. Now it seems Roger has run into a bit of trouble in NSW, where ALH was yesterday accused of breaking the law by paying out large poker machine prizes in cash in its hotels (see here). Oops.

Not the best publicity, especially as Woolies has already had trouble battling a number of alleged breaches of the Trade Practices Act. The latest claims could result in an embarrassing fine for the company from the NSW regulators who have been cracking down on the payment of cash prizes from poker machines.

NSW law says that any prize of $1,000 or more must be paid as either a cheque or electronic funds transfer, not in cash. Paying out the prizes in cash encourages people to put the money back through the machines, lifting turnover, profits and the value of the pubs over time.

Tsk tsk. Not the sort of stuff you’d expect from such a pillar of the business community as Roger Corbett, who this week handed over a cheque for more than $2.7 million to the Salvation Army’s Red Shield appeal.

And a devout Christian, who’s pushing ahead with plans to convert a small supermarket in Castle Hill, in the heart of Sydney’s bible belt, into a huge Dan Murphy’s liquor store.

There was always the fear that buying ALH, with its thousands of gaming machines in Queensland, NSW and Victoria, would push Woolworths and Corbett into unchartered territory.

What Woolies really wanted was the takeaway grog sales and the land around the more than one hundred hotels and bottle shops. It got those, but it’s also ended up also some unwanted bad publicity.

Peter Fray

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