Wesfarmers’ subsidiary Coles has found itself the meat in a $1 sandwich, between anti-gaming advocates pushing consideration of poker machine reform and the realities of a complex industry.
The Australian Financial Review (AFR) opened a hornet’s nest with news that Coles’ Spirit Hotels had thoughts on a trial of $1 maximum bets at its 89 pubs, holding 3069 EGMs. The publication suggested if Coles didn’t get its way it would “split with the industry”.
The revelations stem from a private dinner over two years ago, involving Wesfarmers boss Richard Goyder and executives from anti-gaming campaigners Alliance for Gambling Reform (AGR).
Controversially, Goyder is said to have made a promise to tackle problem gambling – possibly arising from the gathering of investment players sensitive to the less than desirable nature of gaming in corporate operations.
More recently, AGR played centre stage at an anti-gambling event hosted by European bank Credit Suisse, which prides itself on social responsibility. The bank followed up the event with correspondence to clients suggesting either Coles or Woolworths must “break from the pack” and implement a $1 bet limit “under the guise of being socially responsible”.
Goyder has fuelled this fire with suggestions such a move by Coles would impact the rest of the industry, and that this was the reason manufacturers have declined to make the required changes to its machines. “We just have to find a way,” he said.
Interestingly, brief mention was also made of the “antiquated” laws that require bottleshops to be tethered to a hotel licence. In Queensland, where most of Coles pubs are located, several ‘satellite’ retail liquor outlets can be applied to each hotel.
The AGR is a backer in the case before the Federal Court accusing poker machine manufacturer Aristocrat and Crown Casino of deceptive behaviour. The AGR also suggest 60 per cent of poker machine players become problem gamblers.
The Coles $1 bet furore has stirred up the usual critics of gaming machines; outspoken Senator Nick Xenophon described the uncooperative EGM manufacturers as a “malevolent pack of bastards”.
Monash University professor Charles Livingstone is similarly dogmatic about gaming in licensed venues, and maintains deliberate strategies and the use of “well-established psychological principles” by the industry to bleed players.
Livingstone lauded Coles’ plan, while condemning Australia’s largest operator of poker machines, the predominantly Woolworths-owned ALH, for not being “concerned about these machines’ potential for harm”.
But the Gaming Technologies Association (GTA) was quick to defend its constituents, outlining ongoing harm minimisation measures including machine-based options, system measures such as voluntary pre-commitment and alarms, and venue-based programs.
The GTA also offered clarity on the logistics of a $1 bet trial, citing an estimated cost to the broader industry of around $3bn.
“A trial as proposed by Coles is not a simple thing,” stressed GTA CEO Ross Ferrar.
“Depending on its scope, it could require complex regulatory, technical and manufacturing input. It would likely entail significant time, cost and resources to build, test and deploy new equipment to the standards of integrity and performance required.”
ALH has also dismissed revisiting the $1 bet debate, which it already entertained and decided against back in 2012 during the industry-shaking ‘Wilkie’ era.
“And we don’t think it’s evidence-based. The prevalence of problem gambling has more than halved over the last decade to around 0.7 per cent nationally,” ALH spokesman David Curry told the AFR.
Despite comments by critics, ALH has in fact initiated an expensive rollout of a self-exclusion program on every EGM it operates, throughout its 300+ venues.
Like a number of solutions previously proposed, bet limits show no evidentiary success in preventing what addicts do when faced with prohibition – find another source. The elephant in the gaming room is undoubtedly the rapidly increasing prevalence of online betting, allowing consumers to easily gamble in web-based casinos with little or no harm minimisation or responsible gaming regulations.
Coles has since clarified with the AFR that the $1 bets are not a deal-breaker on its continuation in Australian hotels, and pertinently their ability to foster bottleshops servicing the lucrative take-away liquor market.
“If we didn’t have the Queensland legislation requiring us to own hotels we’d probably get out of hotels,” said Goyder. “But if we sell them, we lose the right to retail liquor.”
The corporate conscience embroiled in listed entities such as Woolworths and Wesfarmers that seemed to spawn the controversy may shy away from gaming, at least in pubs and clubs, but it stops short of caring about the other nanny-state collateral – booze.
At the same time, the gaming industry continues to work on realistic solutions without unintended consequences. Ferrar says it is “indisputable” that Australia has amongst the lowest maximum pokies bets and slowest speed of play in the world.
“Our industry remains committed to progressing harm minimization initiatives where they are shown to be effective.”
Poetically, Credit Suisse has just been fined over $5bn by the US Department of Justice for its role in causing the 2008 Global Financial Crisis (GFC), for selling toxic mortgage securities to hapless investors. The bank has declined to pay.