Wrap of 2023 Aristocrat board tilt

March 10, 2023

Here is a wrap of the action at the Aristocrat Leisure board tilt which completed at the AGM held in Sydney on February 24, 2023.

In 2022, Aristocrat lodged this 16 page notice of meeting for its virtual AGM on January 24, precisely one month before the February 24 AGM and I lodged these 16 questions during the meeting. The company refused repeated requests to publish a transcript or webcast archive of the 2022 AGM or even provide a private transcript so I still don't know what precise answers were given.

This sparked the 2023 board tilt which I wasn't expecting to go through with, assuming that the board would agree to publish past AGM exchanges. Alas, they refused, so the tilt was on.

The company funded a trip to Sydney to meet chairman Neil Chatfield and company secretary Kristy Jo on January 10 and then produced this notice of meeting which they didn't snail mail to any shareholders but at least included the full platform. The ballot paper (see p18 of NoM) was ridiculously biased.

The AGM lasted 2 hours and 20 minutes and the chair announced at the start of the meeting that this full webcast archive would be published after the meeting, which it was.

In terms of watching some of the key exchanges on the webcast, this is when they occurred:

47 minutes: pre-debate skirmishing where the ban on mobile phones was softened, the chair relented on requesting that I leave the room when my proxy Nick Xenophon was speaking and the 2 question limit per resolution was also softened, reluctantly.

50 minutes: why did we hire the NSW Police Minister's son when the chair told The Australian that morning: "We don't get involved in politics. We leave politics to the politicians."

53 minutes: our much-vaunted cashless pokies trial in Newcastle was actually delivered 13 months late and what does Aristocrat think of the Perrettot proposal and the Tasmanian cashless policy? Chair admitted they didn't know what the impact would be.

64 minutes: Nick Xenophon challenges the chair over the so-called "kill text" that he received from then Clubs NSW CEO Anthony Ball who is now head of government and stakeholder relations. This lead The SMH coverage of the meeting and the chair did admit that such a text would breach Aristocrat's code of conduct but wouldn't commit to asking him to apologise.

68 minutes: Nick Xenophon nails the ALP for being the only political party in the world to fund its operations from poker machines which drained $40 million from gamblers last year. The chair and CEO professed to not know the details of Aristocrat's commercial dealings with Labor, which currently regulates pokies in 6 jurisdictions with NSW likely to follow on March 25.

71 minutes: Troy Stolz asks about ethics in the industry with some pokies operators offering free trips or State of Origin tickets to venues which buy their machines.

73 minutes: Troy Stolz asked how much of the $7-$8 billion lost on Aristocrat's 100,000 Australian machines was cash and why do we still have thousands of machines in the NSW market where you can load up to $10,000 in cash. They wouldn't be drawn on cash breakdowns.

75 minutes: we've given $3 million to the Cerebral Palsy Alliance over 15 years but over that same 15 years more than $100 billion has been lost on our Australian pokies and hundreds of addicted gamblers have committed suicide. Why haven't we donated anything to the surviving relatives? The chair declared this "rather emotive" but didn't actually engage on the gambling harm or suicide issue.

81 minutes: Nick Xenophon asked board candidate Philippe Etienne about money laundering why there hasn't been a product recall on NSW machines which can still take $10,000 in cash load-ups at a time. Chair botched it and had to ask for the question to be repeated.

88 minutes: if we are the best on responsible gambling, then shouldn't we resign from the pokies lobby group, the Gaming Technologies Association, where all the pokies manufacturers sit on the board and lobby together. Chair objected to the use of the word "colluding".

95 minutes: time to stop blaming gamblers and get the language right. It is addiction and gambling harm, not "problem gambling" and "Responsible Gameplay", as Aristocrat frames it.

100 minutes: Nick Xenophon quotes from Productivity Commission report suggesting that 40% of pokies revenue comes from "problem gamblers" and US-based board candidate Pat Ramsey counters saying he has seen reports putting it at only 1, 2 and 5%.

103 minutes: challenged director Kathleen Conlon about Aristocrat running an unfair election when she is chair of the AICD's Corporate Governance Committee.

107 minutes: Nick Xenophon challenged Kathleen Conlon on gambling harm and she stressed how the board is increasingly focused on this issue.

112 minutes: newest director and US-based Tribal Leader Bill Lance was challenged to get Aristocrat out of the bunker given the company never meets with its critics. He failed to explain

117 minutes: Troy Stolz asked for the impact if the whole industry went cashless and chair Chatfield said: "Frankly, we don't know".

120 minutes: Nick Xenophon asked Bill Lance about cashless trials in the US and he said that his tribe pioneered the first trial in the US, but it wasn't Aristocrat which provided the machines.

121 minutes: delivered campaign speech for almost 5 minutes which was a bit cheeky given the chair tried to impose a 3 minute limit. A miked up tattooed heavy in jeans and t-shirt gave me the stare throughout as you can see on the webcast. Gave Dan Andrews a solid spray for Victorian Labor's $761,000 AHA donation ahead of the 2019 campaign as a thank you for new 20 year pokies licences.

The voting result was the lowest of all 55 tilts, coming in at just 0.33% with a voting turnout of 487.3 million shares which was a healthy turnout of 74.3%. If trying to find a positive spin, the value of the 1.574 million votes in favour was worth $58 million based on the closing price of $36.88 on the day of the meeting, which was a 3 month high.

Media Coverage

There was a lot of media coverage of the meeting including reports on the Seven and Ten main TV bulletins on the evening of February 24, plus coverage in The AFR and The SMH. The Australian ran this story on the morning of the AGM based on an interview with the chair and CEO but failed to actually cover what happened at the meeting. The AAP coverage ran on Yahoo News.