This week the ACT Legislative Assembly will vote on whether to allow Casino Canberra to have poker machines.
The change has been introduced by former Liberal and now independent Trevor Kaine.
The casino has been trying to get poker machines for the best part of a decade. In the past it has put forward various schemes and proposals in a way to get around the poker machine ban, most recently a half-baked plan that part of its floor area be a registered club. Only now has it abandoned artifice and (pardon the pun) put its cards on the table.
The latest proposal is more straightforward. Give us some pokies, the casino argues, and we will pay more into government coffers.
The ACT has done reasonably well out of its casino — better than most other states. In 1991 when neither Sydney nor Melbourne had a casino, it extracted $19 million for a casino licence after a tender process, capitalising on the monopoly right. The fruits of that money can bee seen with the new Playhouse and other changes in Civic Square.
At the time, the casino licence forbad poker machines because they might be detrimental to the club industry. Bear in mind, Labor was in office and the Tradesman’s Club in Dickson and the Labor Club in Belconnen contributed substantially to Labor’s coffers.
Still a casino without pokies was seen to be better than no casino at all.
Since 1991, however, things have moved along. The club industry has expanded dramatically. No longer are clubs purely places where people with like-minded social, ethnic, religious and sporting interest meet. Rather they are places transformed by their monopoly on poker machines. Membership is now virtually free. The community of interest among members has disappeared with membership so diverse that being human is the only commonality.
Yet they still enjoy tax concessions more appropriate to the church street stall than hugely thriving businesses with thousands of patrons.
The biggest change in perception of the clubs has come in the past two years. The clubs are now required to state precisely how much of their net poker machine revenue goes to sport and charity.
The results in the past two years, as monitored by the ACT Commissioner for Revenue, have been pitiful.
Only 3.6 per cent of net poker machine revenue has gone to sport and charity — that is 3.6 per cent after prizes, (concessional) tax and other poker machine costs. It amounts to about $4.5 million. Most of the revenue goes back to the clubs. When you include club related sporting facilities, on the absolutely most generous view of the figures 12 per cent of net poker machine revenue, about $13 million, goes back to the public.
The vast bulk of poker-machine revenue goes into making bigger and glitzier clubs.
If the clubs had behaved themselves, their monopoly would have been justified. But it is not.
On the table before MLAs this week will be a proposal for the casino to get 200 poker machines. In return it will pay an up front licence premium of $10 million into ACT revenue. Further, it will pay a 30 per cent tax on net poker machine revenue. That will come to $2 million a year on the casinos estimates, perhaps a tad less on more realistic estimates.
The 75 or so clubs will squeal blue murder, but they only have themselves to blame because of their previous parsimony.
From a government point of view, the casino proposal should look attractive. Instead, of relying on the clubs to give a few million to sport and charity, the government will be able to get the money itself and put it precisely where it wants. One would like to think that it could use the money on deserving sport and charity.
The fact that the casino is capable of putting a proposal with such benefits for the public purse, indicates how much potential revenue is being leached by the clubs. Ultimately, the revenue foregone to the clubs in providing its members, staff and others with benefits results in more general imposts.
The casino’s offer highlights the inadequacy of the arrangements with the clubs and points to the dangers of granting monopolies — particularly a monopoly over poker machines to clubs.
The casino’s proposal will deliver on its own $2.6 million a year (assuming a 6 per cent return on the $10 million up-front premium licence fee). That compares to just $4.5 million from the 75 clubs combined.
The casino pokies revenue is likely to detract from club revenues. That would be of community concern, if the clubs were doing their job. But they are not. Indeed, the more business migrates from clubs to casino pokies, the more the Government would get for discretionary expenditure for charity and sport.
Enter Greens MLA Kerrie Tucker. Tucker is opposed to more pokies. Fair enough. She also points out that in all the talk about charity and sport being funded from poker-machine revenue, the question of problem gambling has been ignored. But she should think hard about the casino proposal. Some of the money on offer could be ear-marked by legislation for problem gambling, and there would be more money available from casino pokies than from club pokies.
The casino says it is sympathetic to the question of problem gambling and puts pamphlets on display in the casino. That, though, is lip-service only.
Labor is on the spot. It collects substantial amounts from the Canberra Labor Club ($264,000) and the Canberra Tradesman’s Union Club ($588,328) so has a conflict of interest — a conflict it does not acknowledge. Moreover a fortnight ago it kicked the unions in the guts by taking away a lot of their power over pre-selection of Assembly candidates. It will not want to kick them in the guts again so soon by hitting the Tradesman’s Club.
Independent Dave Rugendyke, like Tucker, is opposed to more gambling. He has a point. At present Australia has 0.3 per cent of the world’s population and 21 per cent of its poker machines. The machines are prolific in the ACT. The top five club groups in the ACT have 2260 machines between them.
But a serious question for the ACT, is not the absolute numbers of the machines, but what is happening to the revenue. Poker machines in the casino and hotels are likely to provide a larger income stream for sport, charity and problem gambling than the present arrangements with the clubs, under which about $1 billion goes through the machines and only $4.6 million finds its way to charity and sport and none to problem gambling.