We’ve seen in the past with Telstra, media stocks and the old Crown
Casino in the 1990s how continuous disclosure obligations to the ASX
can sometimes clash with policy announcements or political decisions
contain market-sensitive information. In fact, any political statement
about uranium policies is extremely price-sensitive in the current
Election results can also cause substantial sharemarket movements as we saw with the extraordinary rally in media
stocks immediately after the 2004 federal election when the Coalition
surprised most observers by securing majority control of the Senate.
Perhaps the biggest example of politically-driven share prices from a
state government will come when the Victorian Government announces the
structure of Victoria’s poker machine industry after 2012 – when the
18-year Tabcorp and Tattersall’s duopoly licences expire. Both licences are worth about $2 billion each on a “no change” basis
but the government won’t be announcing its plans until sometime in 2007 – after the November 2006 state election.
The extraordinary 21.5% statewide primary vote for No
Pokies independent MP Nick Xenophon in the South Australian upper house last month might
just change the dynamics of all this, especially with the new
proportional representation voting system in Victoria’s upper house
giving minor parties a genuine chance at the balance of power.
Stand by for the Victorian Greens and Family First – the two best
placed minor parties in Victoria – to both come out very strongly
against the pokies, just as they did during the Tasmanian and South
Australian elections before the Xenophon anti-pokies juggernaut was fully comprehended.
The political start-up that I’m toying with running for, People Power,
is also going down a similar path, raising the prospect of a minor
party anti-pokies auction against the lucrative Victorian duopoly system supported by both
major parties because of the $1 billion-plus a year in tax
In light of all this, surely the Bracks Government will have to outline
its intentions before Victorians go to the polls to allow a fully
informed policy debate. In fact, there’s a
strong argument that shareholders in both Tattersall’s and Unitab should be
given some sort of insight into the government’s thinking before
consummating their $4.3 billion merger because the most valuable asset
in the combined group will be that Victorian pokies licence that Tatt’s
got for free from the incompetent Kirner Government.
Eli Greenblat was wrong in The AFR yesterday when he wrote
that the separate Tattersall’s lotteries licence, which expires next
year, is worth “billions of dollars” over the next ten year licence
period. With earnings of about $20 million a year it’s only worth about
$250 million, unlike the pokies licence which is worth “billions”.