If ever you wanted evidence that Woolworths is embarrassed about being Australia’s biggest pokies operator, look no further than the fact it is still yet to tell the ASX about spending more than $150 million buying new licences in Victoria.
The Victorian government revealed it had raised $981 million from the auction of 27,500 10-year pokies licences on Tuesday afternoon while hundreds of journalists were in the Canberra Budget lock-up.
That didn’t stop the story being the splash (You lose on the pokies again) in Wednesday’s Herald Sun, albeit inside the Budget lift-out, and the page three lead in The AFR under the headline: “Victoria pokie auction a $1bn lemon”.
In its latest half-year results released on February 26, Woolworths declared on page 31 that “the 2012 changes to Victorian gaming are well under way and will be beneficial”.
Too right they have been! Woolworths was literally able to scoop up the licenses for its 35% of the Victorian hotels market (4812 machines) for hundreds of millions of dollars less than expected and the ASX still hasn’t been informed.
Pokies billionaire Bruce Mathieson, the 30% minority shareholder in the Woolworths-led pokies joint venture which is branded ALH, popped up in Thursday’s Herald Sun revealing they won the biggest share of the spoils and declaring that taxpayers “came out pretty well”.
Yeah, right. Given that Tattersall’s and Tabcorp were entitled to compensation of more than $1 billion for losing their duopoly and are expected to sue for that legislated payout, Victorian taxpayers could be left wearing a net loss from the new venue owner model.
Even if Woolworths paid less than $171.67 million — the pro-rata share for its 17.5% of the 27,500 licences, which raised $981 million at auction — the ASX should still require the company to inform investors about what is one of its 10 largest acquisitions since floating in 1992.
Embarrassment about profiting from pokies addicts in the world’s most lucrative gaming market on per capita terms, is not an excuse when it comes to keeping investors fully informed. Nor is pressure from the Victorian government to avoid embarrassment about the ineptitude of its auction system.
The ASX is certainly having a strange run on announcements at the moment after censoring colourful pollster Gary Morgan, who doubles as chairman of listed mining wannabe Haoma Mining, in his criticisms about the resources industry tax slug at last Tuesday’s EGM.
Given that ASX chairman David Gonski has been copied into the emails arguing the toss on this one, Morgan’s latest response included this rather cheeky line:
What concerns us is your fellow ASX Executives or Directors may not be objective. For instance the ASX Chairman David Gonski is the new Chairman of Ingeus Limited, a very profitable business of which Therese Rein (Prime Minister Rudd’s wife) is founder and Managing Director. We believe this reply and your letter should be released by the ASX and available to Haoma Mining’s shareholders. If not Haoma shareholders are not fully informed.
Surely it wouldn’t hurt to let a miner’s criticisms be aired through the ASX announcements platform, just as investors would benefit from a frank disclosure about the wonderfully cheap gambling acquisition secured by Australia’s biggest retailer.
In other curious Victorian pokies developments, accounting giant Deloitte is being paid by News Ltd to investigate Melbourne Storm’s financial affairs, including details of what The Sunday Age described as $1.1 million of sponsorship payments by a Woolworths pokies venues.
Deloitte is, of course, the long-time auditor of Woolworths.
Meanwhile, The Sunday Herald Sun revealed last week that the Victorian Commission for Gaming Regulation has abandoned its own investigation into Woolworths after it ripped the pokies out of a venue it controls in Richmond, which was supposedly operated with a defunct basketball club in order to secure a lower tax rate.
Maybe Deloittes could pick up the slack and finish the investigation as part of the next Woolies audit.