“Every cent that is spent by a club member is recycled back to the members in the form of better facilities, affordable meals, sporting and recreation infrastructure.”

So said incoming Clubs NSW CEO Anthony Bell on Monday night’s pokies story put together by Greg Hoy for The 7.30 Report.

If Bell was telling the full story, he would have finished his sentence with “… and a business for Dutch banks and Australia’s largest retailer that exploits the federal and state tax breaks we get.”

Invest in the journalism that makes a difference.

EOFY Sale. A year for just $99.

ENDS MIDNIGHT

You see, the Penrith Panthers are the biggest club of all in NSW and they’ve sold 49.9% of the land and buildings at their 14 pokies venues to the listed ING Real Estate Entertainment Fund.

While the Panthers still nominally own 100% of the pokies licences, 49.9% of the profits flow back to IEF through the lease payments, which justify the fund manager valuing the stake in its most recent accounts at $89.5 million.

ING’s involvement aside, the NSW government insists registered clubs be not-for-profit ventures, but the same can’t be said in Victoria.

I dropped into the Manningham Club in Bulleen last night for a beer among the pokies players and managed to pour some money into the Woolworths bank account seeing as they control this particular “club” and enjoy the tax breaks at a facility that used to be called The Sentimental Bloke Hotel.

Woolworths has teamed with various AFL clubs such as Collingwood and Hawthorn to avoid the higher tax rates paid by hotels at venues that look and sound like hotels but are technically clubs. ( Check out the website for Collingwood’s Coach & Horses venue in Ringwood with its signature Woolworths “kids eat free” advertising. )

Indeed, the scale of the tax benefits flowing to pokies “clubs” have recently been chronicled by the Productivity Commission in its report on the contribution of the not-for-profit sector released in February.

The report noted that Australian taxpayers claimed $1.8 billion for deductible gifts to NFPs in 2006-07, fringe benefit tax concessions amounted to about $1 billion in 2008-09, state payroll tax concessions for NFPs exceeded $800 million and concessional benefits on gaming machines in clubs are worth more than $700 million a year.

How on earth can that be justified?

It is clear that Woolies is becoming increasingly uncomfortable about the pokies. After Monday’s 7.30 Report story, the fresh-food people copped another prime-time mention for its gambling habits on ABC1’s Hungry Beast last night.

While the likes of Anthony Bell and his headstrong predecessor at Clubs NSW, David Costello, are not taking a backward step, others in the industry can sense what’s coming.

Sydney Swans chairman Richard Colless also chairs the ING pokies fund, which has half of the Penrith Panthers business and when asked at last month’s shareholder meeting about the risks associated with social concern about gambling, had this to say:

“I have just observed in the last couple of years a different tone in the community. I think there is a greater concern about poker machines … and I think it is gathering momentum.”

(Listen to the full debate here.)

Too right it is. With the federal government now considering the Productivity Commission’s final report, the pokies industry won’t just be able to heavy individual state governments that are so addicted to the tax revenue.

The draft report recommended a $1 maximum bet rule, which would significantly reduce the losses of problem gamblers. Remarkably, the Tasmanian Liberals and Greens have pledged to introduce this if elected on March 20.

And if federal Labor doesn’t finally do something about the pokies, which Kevin Rudd professes to “hate”, then Lindsay Tanner can expect the anti-gambling lobby to take a keen interest in his marginal seat of Melbourne at this year’s election. Greens candidate Adam Bandt only needs a 3% swing to knock over Tanner, which is food for thought as the finance minister considers how much spare capacity the Budget has to pay for some of the serious pokies reforms recommended by the Productivity Commission.

SALE ENDS MIDNIGHT

Australia has spoken. We want more from the people in power and deserve a media that keeps them on their toes. And thank you, because it’s been made abundantly clear that at Crikey we’re on the right track.

We’ve pushed our journalism as far as we could go. And that’s only been possible with reader support. Thank you. And if you haven’t yet subscribed, this is your time to join tens of thousands of Crikey members to take the plunge.

Peter Fray
Peter Fray
Editor-in-chief
SAVE 50%