After reading this Aristocrat AGM preview piece in Crikey on Tuesday, detailing a range of questions that would be asked of the $24 billion pokies giant, Aristocrat chairman Neil Chatfield thought he would try the debate-limiting tactic of restricting individual shareholders to a maximum of two questions per resolution.
Thankfully, we had a crew of three qualified speakers from the gambling reform movement and there were eight resolutions on the agenda, so it was just a case of sharing the questions around and framing them around the resolution being debated.
With the Australian Shareholders’ Association representative being the only other shareholder wishing to speak, what would have been a perfunctory 40-minute meeting at the company’s global headquarters in North Ryde turned into a lively 135-minute debate covering all manner of topics.
After 23 AGMs since the company floated in 1996, Aristocrat has never heard publicly from someone who has suffered gambling harm because of the company’s addictive poker machine products.
That all changed yesterday when two angry mothers, Sonia and Bar*, let the board know what sort of misery had been inflicted on their sons.
Sonia told the harrowing story of her son twice attempting to take his life, along with the financial harm the addiction has inflicted on her family and thousands of others.
The chairman and other directors expressed sympathy during the meeting. Aristocrat’s recently appointed responsible gaming manager Harry Ashton sat with both mothers for 15 minutes after the meeting.
However, there was also an element of denial from the top table as the chairman flatly denied that Aristocrat’s products were built for addiction.
And none of the directors put their hand up when asked if they’d read the definitive book on the subject — Addiction By Design, by US anthropologist Natasha Schull — which was published by Princeton University Press in 2014. Some promised they would take a look.
When you’re making a fortune in a sin industry, the smart PR play is to stay below the radar by downplaying your ill-gotten gains.
That’s why Australia’s biggest pokies operator Woolworths refuses to confirm that gamblers are losing about $1.5 billion a year on their 12,000 poker machines spread across their 285 gaming rooms.
Aristocrat took a similar approach at last year’s AGM, refusing to disclose its market share or how many pokies it has strewn across Australia’s 5000 pokies venue.
Fast forward 12 months and new chairman Neil Chatfield at first attempted to duck and weave when asked for an Australian pokies count at yesterday’s AGM.
However, when Aristocrat paid US$1.23 billion for US pokies outfit VGT in 2014, the announcement gloated about lifting its US installed-machine base from a modest 8200 to 28,400 with the addition of VGT’s 20,200 lease machines, mainly to tribal casinos.
When this was pointed out, Chatfield, who has tried to push his transparency and sustainability credentials, then piped up that Aristocrat has an Australian market share of about 50%.
There are just under 200,000 installed poker machines in Australian, which are draining about $14 billion a year from gamblers, including casinos such as Crown Melbourne, which is Australia’s biggest pokies den after pocketing a record $463 million from pokies gamblers in 2019.
With a 50% share, this means that Aristocrat’s 100,000 installed Australian machines are responsible for about $7 billion a year in pokies losses. Staggering!
Imagine how many lives could be saved if they were more responsible with machine design, insisting on $1 maximum bets and reducing the $7500 in cash that can be loaded up into a $10-maximum-bet machine in NSW, something that reportedly aids and abets widespread criminal money-laundering in NSW pubs and clubs.
On the regulatory front, Aristocrat’s board and management presented themselves as innocent operators who simply abide by the laws of the land and never make political donations.
What they didn’t mention is how they use the pub and club lobby groups to do all the heavy lifting with huge political donations, lobbying and hiring former politicians and staffers to ensure the world’s most permissive pokies regulatory regime is preserved.
Indeed, no other industry benefits from the regular four-year MOUs that ClubsNSW signs with the NSW Coalition before each election guaranteeing the Coalition won’t introduce reforms that would reduce harm.
When challenged by Sonia as to why Aristocrat was still refusing to offer a $1 maximum bet product, even after Coles had requested one in line with the Productivity Commission recommendations, the supermarket giant was dismissed by Chatfield yesterday as “just one customer which had now subsequently left the industry”.
When defending Aristocrat’s reputation, Chatfield talked up its $250,000 partnership with ClubsNSW on drought relief, along with the research work Aristocrat funds at Sydney University.
This university relationship has long been controversial among gambling academics as the results of the research are typically framed to blame the individual gambler rather than the machine — an important narrative for the industry.
The AGM was webcast live yesterday but the link was broken last night. Here’s hoping they maintain their commitment to transparency and make it available, given fewer than 100 of its 28,000 shareholders were in attendance yesterday, but they did get to enjoy a delicious spread once the debate was over.
*Sonia and Bar preferred not to have their surnames mentioned.
Stephen Mayne is the founder of Crikey and a shareholder activist.