The Victorian government has been deluged with 110 submissions
to its Gaming Licences Review, including a very strong attack from 34
different Victorian councils, many of which now face the ignominy of
seeing their residents spend more at the pokies than in local rates.

However, the most interesting aspect of the submissions is that the all-powerful Herald Sun has turned them into this very strong front page splash
today depicting greedy pokies companies such as Tattersalls, Tabcorp
and Woolworths putting their hand out for more when Victorians already
lose about $2.4 billion a year playing them.

For some reason The Age completely missed the story
today which we certainly hope wasn’t because Fairfax chairman Ron
Walker has personally made about $70 million from Victorian government
gaming policies and Woolworths CEO Roger Corbett is still considered
Ron’s heir apparent on the Fairfax board.

The Tattersalls submission is predictably upbeat
about Victoria’s “highly successful gaming industry” and called in a
raft of experts from Access Economics, accountants PKF and ACIL Tasman.
Tatts gloats that Victoria’s pokies lead the nation in terms of annual
per machine returns to taxpayers as follows:

Victoria: $34,098
NSW: $9,101
Queensland: $13,182
South Australia: $21,070

state and federal taxpayers scoop up 49% of all player losses in
Victoria but Tattersalls points out this figure is only 27% in NSW. No
wonder Bob Carr and Michael Egan tried that new pokies tax on the
all-powerful NSW Clubs, something which Morris Iemma eventually caved

Tattersalls has also revealed some very interesting charts
showing how much more profitable poker machines in pubs are when
compared with clubs, which explains why Woolworths derives such a large
percentage of its hotel profits from Victorian pokies. The following is
annual player losses per machine:

State Hotels Clubs
Victoria $114,909 $60,882
NSW $66,291 $44,193
Queensland $48,368 $37,360
South Australia $56,055 $33,104

Why is this so? Because Victoria’s abominable industry structure gives
Tattersalls and Tabcorp heavy incentives to place as many machines
as possible in the poorest suburbs where brain-dead citizens happily
gamble away their net assets. The duopolists also compel the pubs to
stay open as close to 24 hours as possible and offer loyalty programs
and cheap food or else risk losing their machines.

The system creates exactly the wrong incentives and will almost
certainly be changed, which should make Unitab shareholders extremely
wary about leaping into bed with Tattersalls when it carries all this
political risk, something The Age’s Stephen Bartholomeusz pointed out today.