Anti-gaming groups and politicians have unsurprisingly welcomed Tasmanian Labor’s announcement that, should they form government next year, the party would phase out all 2375 pokies in pubs and clubs over the next five year.

Ahead of the March 2018 state election, Labor opposition leader Rebecca White last week announced that she would not renew Federal Group’s historic deed to poker machines in Tasmanian venues in 2023 other than casinos.

Labor have also promised a $55 million package to transition bars away from pokies, stating that the decision would boost both long-term social health and the state’s economy (the latter of which state Liberals have taken issue with).

But where did the push for a pokie ban come from? And why has Labor adopted the policy when, for example, their Victoria counterparts decide to extend contracts? Let’s take a look at the context.

Pokies in Australia

Compared to the rest of the world, Australia has an enormous amount of gaming machines. According to an Australia Institute report, which landed on the same day as Labor’s announcement, we have roughly 2.5% of the world’s gaming machines, in stark contrast to our measly 0.3% of the global population. Remove Japan’s pachinko parlours, and we jump to 6%.

Of those a whopping 183,000 out of the 241,000 pokies are in non-gambling venues, or 76% of the world’s pub and club poker machines. Poker machines cost the country a record $12 billion in 2015-16, or more than half the total $42 billion spent on gambling.

And while a pub ban in Tasmania move would follow Liberal policy in Western Australia, Labor’s policy flies in the face of their counterparts in NSW and Victoria, where the practice has bipartisan support.

Why Tasmania?

First off, this was a politically controversial but seemingly popular decision on Labor’s part.

A recent ReachTEL poll showed 81% of people in Premier Will Hodgman’s seat want to see poker machines either reduced in number or removed entirely, a finding supported by a 2010 Productivity Commission report.

Community groups say removing the machines in clubs and pubs is a vital step in improving mental and physical health across the state. Tasmania’s “Community Voice on Pokies Reform” coalition of over 60 organisations and thousands of volunteers campaigned heavily on the transition as a public health issue.

The move has been welcomed by Alliance for Gambling Reform’s Tim Costello and the Greens.  Independent Federal MP Andrew Wilkie, who was was elected in 2010 on the back of anti-gambling policies, congratulated White on a policy he says has “dramatically increased” her chances of election.

However the state’s peak hospitality body has rejected the move, with Tasmanian Hospitality Association arguing Labor’s policy risks hundreds of jobs and is unnecessary in the face of Tasmania’s existing harm-minimisation practises and problem gambling rates. Venue owners have said the loss of pokie revenue would close doors, and the Tasmanian Tourism Council doubted the $55 million package, which translates to a couple hundred thousand in loans to a regional pub, could help.

The Tasmanian Chamber of Commerce and Industry has flagged the potential for a massive shift to online gaming. Other critics have unsurprisingly included Federal Group and the existing Liberal government, which has bizarrely tried to reframe the debate around Labor’s purported hypocrisy for not going after pokies on ferries.

What about the powerful Federal Group’s stranglehold?

The elephant the room here is Federal Group’s free monopoly in Tasmania; the Sydney-based Farrell family’s exclusive licence, worth around $30 million per year but inexplicably gifted freely in 1993, has lasted rotating governments and helped bring the family fortune to over $463 million.

The Farrell’s foothold in the state was recently chronicled by historian James Boyce in his book Losing Streak, where Boyce traced the family’s still largely unexplained free licence, allegations of bribery in the face of competition, and secret negotiations all the way back to the 1967 proposal for Australia’s first casino, the now rundown “pokies barn” Wrest Point in Hobart. Other experts have found Federal’s practices have seen them become a “private taxman in Tasmania” and their introduction of pokies see employment in the pubs and clubs sector fall 14%.

Because despite the economic criticism, $113 million a year is lost to Federal’s pokies in non-gaming venues. Gambling as a whole accounting for less than 1% of the Tasmanian government’s revenue, Anglicare argues that removing the machines would actually improve Tasmania’s total economic output and employment figures.

Anglicare’s most generous modelling found that a total diversion of gambling losses from clubs and pubs would create 670 full time jobs, add $91 million to Tasmania’s annual gross output, and $45 million in wages, profits and dividends; their most conservative estimate, that only half of gambling losses would be diverted, still saw a bump in each category.

But Labor’s 2023 new deadline is the result of one of Tasmania’s great unexplained gambling deals, a 20 year renewal of Federal’s monopoly negotiated with then-Labor government in 2002.

So despite those polls, the policy reversal is still politically risky; it will require absolute commitment and strong messaging in the face of genuine hospitality concerns, as well as whatever it is the Liberals are trying to prove with ferry pokies.

Peter Fray

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