Joan Kirner and her former Victorian Cabinet colleagues have much to be ashamed of today. Way back in 1991, her
dying Labor government gifted a secretive private company one of two
licences (the other went to the government-owned TAB) to roll out tens
of thousands of insidious poker machines
across Victoria.

Fifteen years later, the beneficiaries of Tattersall’s have milked
about $1.5 billion from the losses suffered by Victorians, many
addicted problem gamblers, playing these machines.

On top of those accumulated distributions, Tattersall’s has now floated
on the ASX and at 11:30am today, the shares opened strongly at $3.50
and then traded in a range between $3.47 and $3.62. After half an hour
of trading, 70 million shares had changed hands –
equivalent to 10% of the entire company. The stock steadied at $3.57 by
midday and with 700 million shares on issue, this values the company at
$2.5 billion, more than $2 billion of which relates to that free
Victorian pokies licence.

Retail investors who paid just $2.90 a share are enjoying healthy
profits as it is clear Goldman Sachs-JB Were under-priced the float.
Applicants in Victoria, Tasmania, Canberra and the Northern Territory,
where Tattersall’s has gaming licences, were all cut back to just 550
shares each. That equates to a profit of $368 per investor which is not
much but better than residents of all other states who received no

institutional price of $3.10 was also way too cheap. Collectively,
Tattersall’s received $300 million for the 100 million of new shares
issued which are now worth $357 million, giving new investors a $57
million transfer in value from the original beneficiaries. However,
don’t feel too sorry for those lucky enough to inherit a slice
of the George Adams estate as they own 600 million shares worth $2.14
billion based on the midday price of $3.57.

Two individual shareholders, including old man William Adams in Sydney,
own more than $100 million worth of shares after today’s bumper debut.
They would be wise to sell down as the Bracks government could cruel
the company’s future if it decided to play hardball when the pokies
licence expires in 2012.

Any Tatt’s beneficiary who wishes to send Joan Kirner a case of
French champagne, can find her courtesy of the Victorian ALP at 360
King St in West Melbourne. No doubt the party would be happy to just
receive cash donations.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey