Woolies only commits 250k to "$40m campaign" and Anthony Ball complaint

October 14, 2011

Dear all 9 members of the Clubs NSW board and all 15 members of the Clubs NSW state council, plus a few other interested parties,

I'd like to draw your attention to today's front page feature story in The Australian Financial Review - "Pokies industry precommits $40m to see MPs lose" - and raise some concerns with you.

Once again, it appears that Clubs NSW CEO Anthony Ball is grossly exaggerating the scale and impact of this campaign opposing reforms to the $12 billion a year pokies industry.

The claim made to The AFR's Pam Williams that $40 million has actually been committed to bring down the Gillard government appears unsupported by any third party verification. Indeed, earlier today I had the following exchange with Australia's largest pokies operator, Woolworths:

From: Stephen Mayne <stephen@maynereport.com>
To: Berger Simon (sberger@woolworths.com.au)
Sent: Fri Oct 14 09:51:31 2011
Subject: pokies query

Hi Simon, I note the P1 story in The AFR today headlined "Pokies industry pre-commits $40m to see MPs lose".

I am doing a story on Crikey for today about this. As the largest pokies operator with more than 12,000 machines in Australia and the biggest member of the AHA, could you let me know how much of that $40 million the Woolies board has signed off for shareholders to invest in trying to defeat Federal Labor MPs, or whether the story is actually an exaggerated threat by the industry.

Regards, Stephen Mayne

Subject: FW: pokies query
Date: Fri, 14 Oct 2011 14:24:08 +1100
From: Buchanan Clare <CBuchanan@woolworths.com.au>
To: <stephen@maynereport.com>
CC: Berger Simon SBerger@woolworths.com.au

Hi Stephen

Simon passed on your message to me. I can confirm that as an AHA member, ALH paid state based levies which were equitably applied by the AHA to all member hotels (NSW/VIC). The total of ALH's contribution was $250k. This was signed off by the ALH board.

Please feel free to contact me if you have any further questions.

Kind regards
Clare Buchanan
Group Manager - Corporate Communications
Woolworths Limited

Wesfarmers and Woolworths take oppositing positions on pokies campaign

With Australia's biggest pokies operator only committing $250,000, your industry needs to find another $39.75 million to deliver what would be the biggest political campaign in Australian history.

As the following story in Crikey today notes, Australia's second biggest operator of hotels with pokies, Wesfarmers, has taken a completely different approach to Woolworths and is refusing to fund any sort of campaign.

20. Packer comes to lunch, AFR delivers the pokies threats

Stephen Mayne writes:

We all know that James Packer doesn't get out much in public, so The Australian Financial Review was clearly chuffed that he agreed to give yesterday's star-studded "Chanticleer Chairman's Lunch" in Sydney some extra gravitas.

But surely the world's most expensive financial daily didn't have to simultaneously unleash Pamela Williams with a front-page story that, yet again, grossly exaggerated the size and impact of the pokies industry campaign against the Gillard government's reform proposals.

The pokies industry, especially Clubs NSW, has repeatedly been shown by Media Watch and others to be over-reaching in its claims.

By now, we all know that the purported $20 million "licence to punt" advertising campaign – which the AFL has absolutely nothing to do with – has actually been closer to $2 million.

So how on earth does the AFR splash a story across the front, headlined: "Pokies industry precommits $40m to see MPs lose".

Think carefully about what these paragraphs on page one of the AFR actually mean:

A coalition of powerful opponents, ranging from the giant Crown casino business headed by James Packer, through to thousands of clubs and hotels under the leadership of Clubs Australia and the Australian Hotels Association, have the government in its sights.

Their campaign, relatively low-key so far, now has commitments from the gaming industry of close to $40 million to deploy against Labor MPs. One industry player privately predicted this week that the pokies campaign would attempt to eviscerate the government's ranks of ministers and parliamentary secretaries at the next election if no compromise was reached.

Between the gaming industry players, high-level agreement has been reached that the ratio to fund their campaign will be struck at one-third from the clubs lobby, one-third from the casino operators and one-third from the hotels association.

Jeepers, our normally sober national financial daily has revealed that a staggering $40 million will be spent just to campaign against some democratically elected politicians over a reform proposal supported by more than 60% of the population in a country with the biggest problem gambling issue in the world.

That's almost double the $23 million spent by the $1 trillion-plus mining industry stopping the resources super profits tax. Could it possibly be true?

Seeing as Woolworths is the largest member of the Australian Hotels' Association and Fairfax Media chairman Roger Corbett was the Woolies CEO who took it into the pokies business, you'd think the AFR would have at least disclosed this association.

Then again, maybe this is just another example of Clubs NSW CEO Anthony Ball grossly exaggerating the bullying threats and dragging other parties into it, as we saw with the AFL.

Channel Nine certainly got sucked into this vortex with its prime time political commentary during the NRL finals and now it has got an ACMA inquiry into potential licence breaches to deal with.

I emailed the following question to Woolworths spin doctor Simon Berger this morning:

"As the largest pokies operator in Australia with more than 12,000 machines and the biggest member of the AHA, could you let me know how much of that $40 million the Woolies board has signed off for shareholders to invest in trying to defeat Federal Labor MPs, or whether the story is actually an exaggerated threat by the industry?"

There was no reply before deadline.

A similar query was sent to Wesfarmers, which operates almost 2000 pokies through its Coles hotels division, and spokesman Robert Hadler replied as follows: "As previously discussed, Coles has not contributed any money to the AHA campaign. It remains our understanding that the clubs in NSW are funding that campaign."

Woolworths has a star-studded board, which, in January included the addition of Jillian Broadbent, the woman who was this week appointed chairman of the expert panel advising the federal government on its $10 billion Clean Energy Finance Company.

This front-page association with the feral Clubs NSW campaign must also be an interesting ride for Ian Macfarlane, the former Reserve Bank governor who joined the Woolworths board in 2007.

Ironically, Broadbent is also one of those directors as Wayne Swan re-appointed her in 2008 to a third five-year term on the RBA board.

The likes of Broadbent and Macfarlane are presumably relieved that these Labor MPs who are going to be destroyed by this pokies campaign are also working so hard to protect the current and former RBA directors and governors from any parliamentary scrutiny over the Securency bribery scandal.

As this list of all current and past RBA directors, Broadbent is the longest serving of the existing independent directors who was first appointed by Peter Costello in 1998.

Why shouldn't she be grilled by a parliamentary committee about what RBA directors knew of these alleged bribes, which led to the arrest of six former Securency executives in July?

Corbett would be another option for some parliamentary scrutiny over the Securency governance breaches as he was appointed to the RBA board in 2005 and has the gig through until 2015.

It's a strange juxtaposition to watch RBA board member Corbett, as Fairfax chairman, preside over the publication of the award-winning coverage on Securency by The Age's Nick McKenzie and Richard Baker, which has been picked up in global coverage, such as this story in The Wall Street Journal last week.


Not for profit clubs are surely not this reckless

With respect, can I politely suggest it is time you bring Mr Ball to heel. His hectoring campaign and constant exaggerations are doing damage to the industry.

After the embarrassment of AFL CEO Andrew Demetriou publicly slamming his misrepresentations in the media, I'm amazed the Clubs NSW board and state council hasn't counselled him to stop making such outlandish claims and to stop speaking on behalf of others without authority.

As an elected councillor in the City of Manningham in Melbourne's eastern suburbs, I am astonished that the 1400 members of Clubs NSW are allowing their good names to be abused in this way with such a reckless campaign.

For instance, have all those clubs listed in the flyer printed on page 61 of The AFR today really consented to their names being attached to such an over-the-top and blatantly political attack on David Bradbury, the Federal ALP member for Lindsay.

Have you actually asked the boards and members of these clubs whether they want their club to so openly campaign to install Tony Abbott as Prime Minister on the grounds that it was unacceptable for a Labor Government to address the problem of Australians being the world's biggest gamblers in per capita term.

The vast majority of the problem gamblers losing the shocking $5 billion a year playing the pokies are traditional Labor battlers who need support from the party which has long traded on its reputation for having a social conscience.

Licence to punt was yesterday's proposal

Can I also suggest Clubs NSW pull its head out of the sand and actually start dealing with the proposal from the Wilkie Parliamentary committee, which was to move to $1 maximum bets.

The Australian Greens have today even more decisively moved to this position as you can see from this press release by Senator Richard di Natale. The text was as follows:

Greens announce pokies circuit breaker

Australian Greens Leader, Senator Bob Brown, and Greens spokesperson for gambling, Senator Richard Di Natale, today announced an alternative policy for pokie reform that removes the need for mandatory pre-commitment.

“The Greens' policy is a simple, targeted and cheap alternative to mandatory pre-commitment,” said Senator Di Natale. “Rather than fitting mandatory pre-commitment technology to all ‘high-intensity' machines, the Greens policy would result in ‘low-intensity' machines only.”

‘Low-intensity' machines would have a $1 limit on bets, a $20 limit on the amount of cash that can be loaded in at any one time and a $500 limit on jackpots.

These limits would rein in potential losses from $1200 an hour to an average of around $100. Poker machines would be more in line with other forms of entertainment.

“88% of recreational gamblers don't bet more than $1 per spin so most punters won't even notice the change.”

“Industry should be pleased because they claim that mandatory pre-commitment would cost up to $5 billion and require a 'license to punt'.

Under this policy those criticisms no longer apply.

“The Greens' policy would hurt less and help so much more.”

This whole "won't work will hurt" campaign is based on mandatory pre-commitment.

Victoria moved effortlessly from a $10 maximum bet to $5 a couple of years ago, so it would be very easy for NSW Clubs to do likewise, albeit to the lower level of $1 maximum bets.

Please start focusing on the proposition of $1 maximum bets. I've heard Anthony Ball frequently talk about mandatory pre-commitment hurting casual punters like himself. This $1 maximum bet would cater for Mr Ball's needs and 88% of all players, without the needs for a "licence to punt".

Support for the Gillard government on the rise

It should also be pointed out that your campaign appears to be having little impact. Crikey carried the following report earlier this week after some polling by Essential Research:

Questions on poker machine reform suggest that while Clubs Australia's grand finals advertising blitz may have had some impact, the public remains strongly in favour of mandatory pre-commitment. The level of support is down to 61% from 67% four weeks ago, with opposition up five points to 30%.

As it does from time to time, Essential Research has also gauged how well informed the public is on the issue, and the extent to which misapprehensions might be influencing opinion. Respondents were asked to nominate a figure which "reflects the social cost of problem gamblers in Australia", and opponents seemed reluctant to do so: 42% opted for "don't know" compared with 25% for supporters. Those that did name a figure tended to come in at well below the $4.7 billion indicated by the Productivity Commission, with options of $1 billion or lower chosen by 44% ($100 million being the most favoured), compared with 9% for $5 billion and 5% for $10 billion.

Once appraised of the Productivity Commission result, support for pokies reform returned roughly to the level it was at four weeks ago. Respondents were also advised that 2.7% of poker machine revenue was invested into the community, and it seems that for some this was enough: support for reform then came down to 57%, with opposition at 31%. The news that the reforms were the result of an arrangement between the prime minister and an apparently unpopular independent had little impact.

And the latest Morgan poll released this afternoon also shows a strong lift in support for the Gillard government. Gary Morgan's press release explains it as follows:

The first face-to-face Morgan Poll taken after the Gillard Government Tax Forum shows a sharp rise in support for the ALP 47.5% (up 4.5%) compared to the L-NP 52.5% (down 4.5%) on a Two-Party preferred basis. The L-NP primary vote is 43.5% (down 3%), still ahead of the ALP 38.5% (up 3%) — this is the highest ALP primary support since March.

Victorian councils getting behind serious pokies reform

As you can see from this package of motions passed by a range of Victorian councils, there is strong support for a Federal Government action on the pokies.

For instance, at the Manningham council meeting held on June 28, 2011, this motion was passed 8-1 with support from Green, Labor, Liberal and independent councillors:

That Council:

A. Endorses the Productivity Commission recommendation for a maximum bet limit on poker machines of $1 per ‘button push'.

B. Notes the Productivity Commission recommendation for a full pre-commitment scheme for electronic gaming machines in all States and
Territories as a "strong, practicable and ultimately cost-effective option for harm minimisation".

C. Endorses the preferred option of the Joint Select Committee on Gambling Reform to impose a maximum $1 bet per button push, $120 hourly loss limit and maximum prize of $500.

D. For electronic gaming machines regarded as "high intensity" and not subjected to the limits described in C, Council supports the imposition of a full pre-commitment system so gamblers can set maximum loss limits.

E. Communicate Council's position to pokies venues in Manningham, the Prime Minister, the Premier of Victoria, relevant Federal and State
Ministers, local members of parliament, ALGA, MAV and VLGA.

See minutes.

Also see this story in The Manningham Leader pointing out how Liberal pokies spokesman Kevin Andrews is out of line with this strongly supported motion by his local council.

Finally, here are some other recent stories about the pokies in Crikey.com and from Cyenne.com

$40 million: the glove are off
Cyenne, Friday, October 14, 2011

Conflicts of interest everywhere in pokies debate
Crikey, Tuesday, September 27, 2011

How Clubs Australia, the NRL and News Ltd beat up an AFL anti-pokies campaign that wasn't
Crikey, Monday, September 26, 2011

Bolt fails to disclose Singo pokies connection - again
Crikey, Wednesday, September 21, 2011

Andrew Bolt fails to disclose association with anti-pokies campaign
Crikey, Tuesday, September 6, 2011

I would be happy to engage with any of you on these issues so fee free to reply to this email at your earliest convenience.

Yours Sincerely

Stephen Mayne