Wresting control of the state’s poker machines from Federal Group and giving it to separate venue operators will make small venues and clubs more viable, a parliamentary inquiry into gaming has heard.
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Developers Australian Leisure and Hospitality Group and Dixon Hotel Group supported new approach to taxation, a new multiple-operator model, and perpetual licences for machines to boost business confidence and encourage further venue investment on day two of the inquiry.
Meanwhile, Clubs Australia believed that giving more control direct to sporting and non-profit clubs would ensure their financial viability.
Here is what companies, organisations and individuals who submitted to the Joint Select Committee on Future Gaming Markets in Tasmania had to say on Wednesday.
AUSTRALIAN LEISURE AND HOSPITALITY GROUP:
ALH disputes Federal Group’s assertion on Tuesday that moving from a single-operator model in Tasmania to a venue-operator model would increase regulation costs.
David Curry, from ALH, said Victoria’s move a decade ago to break the duopoly over the state of Tatts and Tabcorp had not resulted in more costs and had delivered more government tax revenue.
“The government should reap the benefit of increased tax revenue rather than someone else collecting the ticket on the way through,” he said.
Mr Curry said ALH supported the tax rate on pokies of 25.88 per cent but argued that licences should be issued in perpetuity to encourage investment confidence.
He said with investment confidence in Tasmania, the company was more likely to perform capital works and employ more people.
ALH operates operates five hotels in the North and North-West, employing 200 people.
The company has voluntary pre-commitment technology installed on all gaming machines in all states except Tasmania.
Mr Curry said they were denied from doing so by Federal Group who owns the gaming machines.
Pre-commitment technology on gaming machines, which allows a user to set a time or spending limit, is mandatory in Victoria.
He said electronic gaming machine participation rates had fallen from 39 per cent in 1999 to 19 per cent 2011.
Mr Curry agreed with Federal Group chief executive Greg Farrell’s comment on Tuesday that people play poker machines for enjoyment and not with the expectation of winning.
JOHN LAWRENCE:
Businessman John Lawrence spoke mainly on the prospect of tax reviews in the hearings.
He said fixed costs for Federal operating gaming machines were low, other than the 25.88 per cent pokies tax.
Mr Lawrence, a shareholder of North-West business Tall Timbers, said venue operators pay a little more – a 10 per cent rental fee, a 29.88 per cent tax rate (including the Community Support Levy), and 9 per cent GST.
Mr Lawrence said venues still picked up 51 cents from every dollar lost in a machine which should be considered when the government reviews the tax rate applied to EGMs.
He said keno was taxed at an “awfully low rate”, and that if it was taxed at the rate of poker machines, the government could yield $10 million in tax revenue, rather than $2 million.
Mr Lawrence said clubs, like RSL clubs, received special treatment from the Australian Tax Office though not having to pay income tax; giving them an advantage over other venues.
DIXON HOTEL GROUP:
Dixon Hotel Group director Peter Dixon said that most of the business’ venues would be broke if it wasn’t for poker machine revenue.
He argued strongly that a venue-operator model be adopted in Tasmania, as it had been in all other states.
Mr Dixon said rather than having a tender system, there should be an opportunity for Treasury to charge an upfront licence fee that took into account revenue from machines and associated costs.
He said he wanted to see a progressive tax implemented which charged the bigger venues, that generated more revenue, more.
“What that would do is make it much easier for the smaller venues to survive,” Mr Dixon said.
He said a progressive tax would not affect the government’s take.
The Dixon Hotel Group operates 13 venues in Launceston region.
Mr Dixon said the company bought many businesses that were either close to failing or in receivership.
“A vast majority of our venues would be broke without poker machines,” he said.
Mr Dixon said “EGMs were doomed” in the future through the rapid growth of online gambling.
Fellow director Carlton Dixon expressed his favour of perpetual licences for poker machines so banks and investors had confidence in a particular business.
He said the community interest test should not be applied for existing licence holders who would like to change the locations of machines within the same local government area.
Clubs Australia manager of policy and government, Anthony Trimarchi, and executive manager of public affairs, Josh Landis.
CLUBS AUSTRALIA:
Clubs Australia executive manager of public affairs, Josh Landis, said there were 1000 people employed by clubs in Tasmania, supported by 6500 volunteers.
He said food and beverage sales made up 65 per cent of overall income while gaming contributed 8 per cent.
Mr Landis said clubs should not be taxed the same as casinos and hotels, pointing out that other states had a progressive tax scale and tax-free thresholds.
“Clubs are struggling to keep their doors open,” he said.
TASMANIAN HOSPITALITY ASSOCIATION:
Tasmanian Hospitality Association general manager Steve Old said there were opportunities leading up to changes to state gambling legislation to increase the four-per-cent Community Support Levy.
He said the levy had supported many sporting and community clubs, as well as harm-minimisation programs.
Mr Old said gaming had brought employment and capital upgrades to regional venues, leading to a greater standard of food and accommodation for visitors.
He said that the group favoured a venue-operator model for gaming machines, though if the government opted to continue with a single-operator model, the THA would fight for a greater share of gaming revenue for operators.
“They are the ones taking the risk, training the staff, and in this day and age, it’s not fair,” Mr Old said.
“We just want a bigger part of the pie (and) the haircut should be taken by the middle-player (Network Gaming).”
At present, Federal Group has exclusive rights over poker machines in Tasmania until 2023 and distributes them to hotels and clubs through company arm Network Gaming.
Mr Old warned the committee over giving all the written submissions provided to the inquiry the same notice.
He said 95 of the submissions were submitted through a campaign website and 87 of those were less than one page long.
Each of those submissions were anti-pokies.
JAMES BOYCE:
Author James Boyce, who has written a book on the pokies industry, said since the Federal Group was granted a licence in 1994 to operate electronic gaming machines at Wrest Point and the Country Club, table gaming had been reduced.
He said both venues had become what he called “pokie barns”.
Mr Boyce said employment fell by 14 per cent in hotels, pubs and clubs over three years after the introduction of poker machines in those venues.
He said the removal of poker machines from the state would give a boost to keno and racing gambling, as well as employment.
Mr Boyce pointed to a Social and Economic Impact Study of Gambling in Tasmania which said that 76 per cent of all money lost from gambling in Tasmania came from poker machine use.
