Billionaire pokies mogul Bruce Mathieson (Image: AAP/Tracey Nearmy)

In the great tradition of taking a dump when no-one is looking, the NSW government released this scathing 113-page report about Woolworths and its pokies division late on Friday afternoon.

News Corp, as you would expect given its big interest in the gambling industry and history of kowtowing to major advertisers, didn’t report a word of it, but The Age and SMH managed to produce this story on Friday night, which ran as the page two lead in Saturday’s SMH. Nothing appeared in print in The Age.

The NSW Independent Liquor and Gaming Authority (ILGA) report is the most tangible regulatory attack on Woolworths that we’ve seen since 2004, when it decided to become the biggest Australian pokies operator through a $1.4 billion joint venture takeover bid with billionaire Bruce Mathieson for the former Foster’s pub division ALH.

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Ever since then Bruce Mathieson and his son Bruce Jr have been left to run the ALH division out of their South Yarra office in Melbourne, despite only owning a minority 25% stake in the joint venture.

As for the Woolworths board and management team, they’ve all been sitting in Sydney largely oblivious to what has been going on inside the pubs they supposedly control.

Yet when asked at various AGMs over the years, the seven Woolworths chairs and CEOs since 2004 (Roger Corbett, Gordon Cairns, Brad Banducci, the late Michael Luscombe, the late James Strong, Ralph Waters and Grant O’Brien) have all sworn black and blue that Woolworths is a responsible company and there is no better operator of poker machines than Australia’s biggest food and liquor retailer.

Here is a sample, drawn from this 89-page transcript, of what the current Woolworths chairman Gordon Cairns said at the 2019 AGM in Sydney just eight months ago:

We are not the most irresponsible [operator]. In fact, the opposite is the case … irrespective of whether Woolworths owned 100% of ALH or whether Woolworths ultimately divests its drinks and hotel business, we are committed to the highest standards of responsible gaming in Australia.

Contrast that with what is in the ILGA’s report, showing how Woolworths wantonly broke NSW law by demanding their staff deliver free alcohol to big gamblers in their pokies rooms.

As the Nine papers explained, ILGA chairman Phillip Crawford attacked the company for displaying “absolutely no contrition” about its behaviour, which has led to fines, costs and suspensions of poker machine trading in two pubs which in total will cost shareholders close to $400,000.

ILGA has also banned ALH’s Queensland operations manager Morgan Bensley from the NSW hotel industry for the next five years, but based on his LinkedIn profile he still appears to be on the ALH books across the Tweed in Queensland. Where is the accountability?

Bruce Mathieson became a billionaire by being Australia’s most aggressive operator of poker machines, whether it be maximising trading hours, donating heavily to pro-pokies politicians and parties, pushing hard on loyalty schemes, marketing to children with free birthday parties, poorly designed venues, publicly attacking critics, litigating councils, buying venues in the poorest areas or plying gamblers with free drinks.

However, after 15 years of this, Woolworths got sick of all the bad publicity and proposed a two-stage demerger that first saw Mathieson parlay his 25% stake in ALH into a smaller 14.6% stake in the bigger Endeavour Group, which included the entire Woolworths retail liquor business.

Mathieson was only promised one seat on the Endeavour Group board after the demerger, but once COVID-19 hit it was postponed until 2021 at the earliest. As of today, Mathieson has three of the seven seats on the Endeavour board and his son retains operational control of the pubs as ALH CEO.

In light of the comments by ILGA chairman that Woolworths showed no contrition for its blatant breaches, it really is time the Mathiesons were relieved of their operational influence so that less combative and more responsible Woolworths people can take charge of Australia’s biggest pokies empire.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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