Federal Group boss Greg Farrell has an anxious wait to see what the Liberal Party’s refined gaming policy might do to his business next year.
Mr Farrell is in charge of the state’s two casinos and has been a beneficiary of an exclusive licence to operate all poker machines throughout the state.
Some are contained within hotels owned by Federal while others are leased through Network Gaming to venues, with revenue raised deposited into a central account and venues then paid a commission.
Labor’s policy to see these gaming machines taken out of hotels, pubs, and clubs – and confined to the two casinos – has led Mr Farrell to proclaim of the dire consequences for his business, other businesses and state’s economy as a whole.
He said there would be substantial job losses right around the state, affecting more than 850 direct and indirect jobs in the Northern Tasmania.
Mr Farrell said a number of venues, only associated with Federal through leasing agreements, would close.
“We would believe that for a large number of venues that are financed, the loss of their gaming contribution to their businesses would put them at-risk through loan to valuation ratios,” Mr Farrell said.
“This would result in them either having to sell the venues to repay the financiers or increase finance costs on reduced revenues.”
Federal Group says it contributes $85 million to the state’s economy directly, and another $30 million indirectly.
He said Labor’s policy also provides no certainty over licences to operate the state’s casions post-2023 and the tax rates it would pay.
The Liberals too have not articulated future tax rates either and are yet to announce whether the state’s poker machine licence would be tendered under a sole-operator or venue-operator model.
“The Liberal policy points out that Federal have been a good corporate citizen in Tasmania, and against that backdrop, future licence discussions and negotiations would take place,” Mr Farrell said.
“To me, that’s extremely different from having your career obliterated by way of total non-recognition of the significant role we’ve played in the Tasmanian tourism and hospitality industry.”
Mr Farrell said if the Liberals adopted the venue-operator model, Federal would lose.
“It depends on tax rates, licence fees and distribution of machines … but the strong likelihood is that the Federal Group would be significantly worse off but by how much is difficult to determine,” he said.
Treasurer Peter Gutwein said the government would announce the make-up of the poker machine licence tender model before the election.
Two days after Labor made its pokies policy announcement, Mr Farrell said he would review donations that Federal made to both the major parties.
The Greens this year have been calling for political donation reform, accusing groups such as Federal of attempting to buy political influence.
Mr Farrell said:
“We’ve never said that we would provide money for policy objectives to be achieved, but at the same time, this is a policy objective that, if implemented, would decimate jobs of many of our employees,”
“So there is no way this is something we can stand behind Labor and say we support.”