The focus on Labor’s policy to remove poker machines from pubs and clubs means it is widely assumed that the Liberal policy is a defence of the status quo.
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In fact, the government plan to directly licence venues represents an equally radical policy change.
Two inquiries in 1992-3 recommended the best gaming market model for Tasmania was a single licence because it would reduce regulatory costs, lower social harm through minimising competition, ensure a more level playing field for pubs and clubs without pokies, and maximise government revenue by allowing the licence to be put to tender.
Even though the financial and competition benefits were forfeited by successive governments giving away the public licence to the Federal Group for free, the opinion of the regulators has not changed since.
The Tasmanian Gaming Commissioners told the parliamentary inquiry last year that directly licencing hotels and clubs was ‘highly problematic’ because of the difficulties associated with regulating 100 different venues.
They also pointed out that in 2016, the government itself had stated that the right to operate poker machines from 2023 “will be allocated and priced by a market-based mechanism such as tender”.
But in August last year, the big hotel chains cut a deal with the Federal Group on how to carve up the pokies pie. Not only did they want venues to be licenced directly but the tax rate on casino poker machines lowered to compensate the existing licence holder.
The fact that Federal has long focused its investment strategy on buying up the most profitable pokie venues meant that their reduction in revenue was moderate, and far less than if they had been made to pay a market price for the most valuable public licence in Tasmania.
The government denied they were a party to this deal but nevertheless soon adopted the industry plan. It is true that the Liberals have not yet committed to lower casino tax rates but nor have they ruled this out.
Analysts have estimated that a 15-year licence would fetch well over $100 million on the market under current tax rates. Instead of being available for health and education, this money will be transferred to the owners of existing pokie pubs through increased profits and a massive capital gain.
In their submission to the inquiry, even the hoteliers admitted that each venue would be worth over $1.5 million more under their direct licencing proposal.
People who are worried that the government policy reversal might have been influenced by the undisclosed donations to the Liberal Party made by the pokies industry have good reasons for their concern.
To date there has been no other explanation for this radical policy change. Even those who support pokies staying in their local community, should be asking how the government came up with a policy that went against the view of Treasury, the advice of the commission and the Liberal’s previous position.
I believe that there is overwhelming evidence that the benefits of removing poker machines far outweigh any costs. But if pokies are to stay, the Tasmanian people at least have the right to expect that no political party will transfer public monies to private operators or make the harm caused by these highly addictive machines even worse than it is today.
- Dr James Boyce is the author of Losing Streak: How Tasmania was Gamed by the Gambling Industry.