spring street, you have a problem

Ok, that’s it; enough is enough. I’ve always been willing to have a go at those who profit from problem gambling while pointing the finger of blame at everyone else but themselves, and while the Clubs associations have borne the brunt of this (because, let’s face it, they deserve it), state governments have also come under the spotlight from time to time.

But the events of the past couple of days have left me gobsmacked. Victoria’s Coalition government has crossed the line and exposed a level of hypocrisy that I can’t ignore. And as usual, it has nothing to do with actually helping problem gamblers, or instigating meaningful gambling reform.

No. It’s all about the money.

Let’s take a step back. Last year saw a fundamental shift in the gambling landscape in Victoria. Tattersalls and Tabcorp had formed a pokies duopoly that dated back to the early 1990’s, when poker machines were first introduced in this state. But in May last year, after months of planning and debate, the Victorian Labor government held their first poker machine auction. The intention was simple: to take ownership of poker machine entitlements away from the Tatts/Tabaret duopoly and, instead, put them in the hands of the pubs and clubs that operate them.

In theory, the intention was a noble one: cutting out the big gambling corporations and giving control to the venue owners. It would also mean a greater share of the poker machine dollar would go to the pubs and clubs… and, coincidentally, to the government as well.

But things are never quite that simple. Many of Victoria’s 27,500 poker machine entitlements were pre-sold before the auction at rock bottom prices, including almost two-thirds of the entitlements bought by clubs. The overall auction process ending up raising $981 million, a long way short of the estimated $1.5 to $3 billion that had been anticipated by many. And once the dust settled, it was clear that ALH, the Bruce Mathieson / Woolworths partnership, had emerged as the new poker machine power in the state.

Yes, there were problems with the process and yes, these problems hurt the bottom line significantly. I gave Labor a whack back then and I’d do it again in a heartbeat. There is no doubt that the auction fell hundreds of millions of dollars short of what could been achieved, and that’s money that the state could have used in so many ways.

However: yesterday, Victoria’s Auditor-General released his report into the process, and the glee with which the Coalition, now in government, jumped on it was frightening. The report details the failings of the auction process and speaks of the market value of Victoria’s poker machine entitlements as somewhere around $4 billion. Well, the howls of outrage have been long and strident. Premier Ted Bailleau called it one of the biggest financial disasters in Victoria’s history. Gambling Minister Michael O’Brien went one further and called it “Victoria’s greatest ever financial disaster… all due to Labor party incompetence.” Member for Prahran Clem Newton-Brown hopped onto Twitter and, several times, referred to Labor’s $3B gift to “pokies czars”.

Someone should have told them about the danger of taking the moral high ground… inevitably, the blowtorch of attention swings back your way.

For starters, that $4 billion figure? That’s what Victoria’s poker machine entitlements would be worth today, if they hadn’t been sold. If they were still owned by Tattersalls and Tabcorp. To compare that figure against the actual sale price of $981 million is absurd… apples and oranges, people. Financial stupidity. Yet the Coalition government has jumped on those figures and they’re riding them as hard as they can.

Then there’s the process itself. It now appears that the Nationals were involved in blocking Labor’s auction proposal, and forced them to include a fixed-price pre-sale component that would benefit regional clubs. That’s the same fixed-price pre-sale that the Coalition are now screaming about… yet at the time O’Brien called it a “magnificent achievement.”

But it doesn’t end there; not at all. If the Coalition are going to scream about financial mismanagement with regards to Victoria’s poker machines, then consider this. Their key gambling policy going in to the last election was the promise of $150 million, over four years, to fight problem gambling. The bulk of this is to be used to set up an independent body to research and promote responsible gambling.

Gee, I wonder if Michael O’Brien had heard of the Responsible Gambling Advocacy Centre when he made that promise? I hope so, seeing as once the Coalition were elected, he became their boss. The RGAC (who you can follow on Twitter as @Resgam, if you like) is funded by the Victorian government, and works tirelessly to promote responsible gambling, share information and reduce the harm caused by problem gambling.

Last I heard, O’Brien was still intending to proceed with his new organisation. Millions of dollars will be spent setting up something that not only already exists, but is working pretty well.

But the icing on the cake is, of course, the current proposed poker machine reforms. Victoria’s Coalition government have rejected the proposals outright, in favour of their own voluntary pre-commitment scheme which, they say, is better. They have promised to take the Federal government to the supreme court if necessary to fight the introduction of the low-intensity/high-intensity mandatory pre-commitment scheme.

Again, I say: consider this. The Victorian government’s voluntary pre-commitment scheme will not only be less effective at tackling problem gambling, but it will also cost MORE than the Federal proposal. Under the Coalition scheme, EVERY poker machine in Victoria will be modified to accept a pre-commitment card that may or may not be used. Every single pokie in the state. Yet under the Federal proposal, most poker machines will be converted to low-intensity machines, requiring little more than software updates. Only the remaining high-intensity machines will need the pre-commitment card modifications. The price tag for these changes is significantly lower than what the Victorian government are proposing, yet so adamant are they to pursue this course, so determined are they to oppose anything the Federal Labor government says, that they’ll spend what they must to make it happen.

But it gets worse. How much do you think it will cost Victorian tax-payers if the state government takes the Federal government to the supreme court over this? I shudder to think. But again, they don’t care about the money, or how much it’s going to cost their voters. They don’t even care about the impact on problem gamblers across the state. They’re opposed to the Federal government’s proposals on principle, and they’ll spend what they have to in order to fight them.

Gee, the last person who said that was ClubsAustralia CEO Anthony Ball, on Four Corners the other night.

And don’t forget that the Federal poker machine reforms will receive some level of Federal funding… funding that won’t be available if the Victorian government goes it alone.

For the Victorian government to look at the state of the poker machine industry and scream about the financial mismanagement of previous administrations is sheer, unadulterated hypocrisy of the highest order. If they really cared about helping problem gamblers, they would step away from the issue of pre-commitment and let the reform process roll on. They could then turn their attention to their own back yard, where they would see that Victorian poker machine venues open earlier and stay open longer than any other venues in the country. They would see that Victorian poker machines have the fastest legal spin rate in the country. They would see that there are other changes that are crying out to be made… changes that don’t require massive spending or supreme court challenges.

But they don’t see any of this. They’re too busy playing politics.


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