(Image: Adobe Stock)

After more than 30 years on the board, embattled RSL Victoria President Rob Webster, 72, is believed to be considering resigning, citing health reasons.

The move comes just days before nominations close for upcoming board elections which is seeing the first internal challenge for leadership of the organisation in more than 100 years. Webster himself has been president since 2017.

Youngest incumbent member of the RSL Victoria board Glen Ferrarotto has been nominated for the presidency by the reformist Hawthorn RSL sub-branch and is expected to win.

However, with seven of the 10 other board positions up for grabs, there is still expected to be a contested vote for board control, with the outcome to be revealed at the July 9 AGM.

Much is at stake, including just how deeply enmeshed RSL Victoria remains in the gambling industry, given it is currently Victoria’s third biggest pokies operator after Woolworths and Crown Melbourne.

Many veteran reformers, young and old, are turned off by the pokies, believing they have distracted the RSL from its core mission of advocating for veterans.

They also think it has been bad business, as 18 RSL Victoria pokies clubs have shut down over the past decade.

Victoria’s veteran community has been up in arms ever since chairman of Vasey RSL Care Michael O’Meara went public shortly before ANZAC Day, calling for board changes at RSL Victoria to overturn the written directive from Webster that the $200 million aged care business be sold.

With more than 500 veterans worried about losing their homes, Nine’s A Current Affair gave the story the full treatment on Saturday night as numerous Vasey residents rounded on the board for proposing to sell them out.

Given the backlash, the obvious pivot would be to pass a board resolution to withdraw the Vasey RSL Care sale directive. But Webster ploughed on and is now expected to quit altogether ahead of what was considered almost certain electoral defeat.

The global gambling industry is going through some tumultuous times at the moment and, like with so many other sectors, the COVID-19 shutdown is accelerating the switch to online alternatives.

Despite having a property portfolio worth around $1 billion, RSL Victoria is bleeding cash and there are serious questions over just how many of its 50 Victorian pokies venues will reopen once COVID-19 operating restrictions have been lifted.

Complicating matters is the fact that RSL sub-branches are collectively due to pay the Andrews Government $68 million for new, 10–year pokies licences in August 2022.

Many of them will have to mortgage their properties and borrow millions to make this payment. Victoria and Tasmania are the only two states which require pokies licence holders to make periodic payments as most jurisdictions have handed out perpetual licences.

Critics believe the timing of the Vasey sale is designed to help RSL Victoria pay for its new pokies licences, but new CEO Jamie Twidale insists the two issues are unrelated.

There are now competing “fact sheets” explaining the situation, with Vasey RSL Care telling stake holders they need to change the RSL Victoria board to overturn the sale, and the RSL itself claiming that any decision to sell is ultimately up to the “governing members”.

In one of many governance quirks at RSL Victoria, these “governing members” are not the directors of RSL Victoria or the directors of Vasey RSL Care.

Instead their numbers include paid executives from RSL Victoria, some of whom have a big history in the gaming industry.

Ultimately, the RSL Victoria board can hire and fire these executives appointed as Vasey RSL Care “governing members”, but as things stand they technically have the power to call an EGM and change the constitution of Vasey RSL Care, forcing a wind-up.

And the RSL brass are indeed talking about the need for an EGM to be called once meeting restrictions are lifted.

Another governance quirk is the role of the War Widows’ Guild of Australia (Victoria), which owns 50% of Vasey RSL Care in what is supposed to be an equal joint venture with RSL Victoria.

RSL Victoria is believed to have exerted considerable influence over the group to push the proposed sale through, but since this controversy has blown up, no one has actually stood up to speak on their behalf.

They are the silent 50% shareholder and it isn’t clear who is in charge.

Perhaps rather than ordering a fire sale of a joint venture business which it only 50% owns, it would make more sense for RSL Victoria to first move to 100% control of Vasey RSL Care through buying out the Victorian War Widows’ Guild.

Given their common mission, some diplomatic RSL directors could probably have persuaded whoever is in charge of the War Widows’ Guild to just hand over the stake for a peppercorn.

However, once the A Current Affair story exploded onto screens nationally on Saturday night, such an outcome could now presumably only be achieved if RSL Victoria promised to be a long-term owner.

Accommodation is precisely the sort of business a veterans organisation should be in, rather than being captured by the gambling industry.

An an example of this capture, Tabcorp is even assisting with RSL Victoria’s governance training during the COVID-19 shut-down.

Tabcorp is paid about $30 million a year to manage RSL Victoria’s pokies business, but it too is looking to sell its pokies division as the business gets increasingly toxic.

Any buyer of the division should not assume that the Victorian RSL will remain its biggest client beyond the expiry of the contract when the licences expire in August 2022.

Peter Fray

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