ALH INVESTIGATES GAMING PRACTISES AS SHAREHOLDERS PONDER INVESTMENTS

In Anti Liquor & Gaming by Clyde Mooney

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The controversy over ALH’s gaming room practises continues, but at least one stakeholder has voted with financial results over purported ethical obstacles.

Earlier this year anti-pokies campaigner Andrew Wilkie MP unveiled allegations that Australian Leisure & Hospitality (ALH), majority owned by the Fresh Food People, Woolworths, was systematically targeting big players of its EGMs in an attempt to keep them in the room and increase revenue.

The allegations stemmed from interviews by Wilkie’s staff with two staff members of ALH pubs, in mid-2017.

Reports of one player in particular brought particular outrage. Dubbed ‘Queen Bee’, she was believed to be on workers compensation, and mourning the recent passing of her two parents. The allegations quoted one staffer as saying “she will get this, that, free drinks, free food,” as part of tactics to keep her in the chair.

The other whistleblower reportedly confirmed staff deliberately gave free alcohol to gamblers to get them to lose more money in the machines.

Since releasing the damning news, Wilkie says his office has received contact by further ALH staff, said to have confirmed the allegations were standard practise across ALH venues. Staff describe “hourly reports” on performance of the pokies rooms, comparing them with other pubs in the group to encourage greater results.

ALH and Woolworths (ASX: WOW) has been in damage control since the news erupted, making a statement citing the group is “currently reviewing our responsible gambling practises across the country”.

Regulations do vary from state to state, but the NSW legislation on the responsible service of gaming stipulates that a hotelier must not:

  • Offer or supply (or cause or permit) free or discounted liquor as an inducement to play
  • Offer or supply (or cause or permit) credits to players as an inducement to play

In late April it emerged that Vision Super – the $9.2bn superannuation fund of the Municipal Association of Victoria’s (MAV) 79 Local Councils, with 100,000 members – would vote on whether to divest the fund’s $150 million holding of WOW shares, in direct response to the alleged misconduct.

Vision Super already has a policy of not investing in companies that deal in weapons and armaments, and is considering extending this to tobacco products.

A state-wide meeting of the Councils took place on Friday, with two motions relating to the issue:

  • Motion #25, pushing for stronger regulations and to reduce harms caused by EGMs, including reducing the maximum withdrawal in a 24-hour period to $200
  • Motion #50, condemning Woolworths for operating Australia’s biggest poker machine business “in a reckless and unsustainable fashion, deluging harm and misery on the community” by operating over 12,000 “predatory and addictive gambling machines” at its hotels across Australia, including 80 in Victoria

The latter advocates for full divestment of the Woolworths investment by the end the year if the Woolworths board has not publicly announced intention to cease its poker machine division.

The meeting saw Motion #25 carried, which could result in some tightening of regulations around gaming venues in Victoria over time.

But despite the rhetoric of the proponents and anti-gaming commentators, the MAV did not pass the Motion to vilify Woolworths over the unproven allegations on ALH, and will continue to benefit from the company’s strong role in the profits of Woolworths.

WOW share value has risen 8.56 per cent since late February.