Dan Andrews blazes the pokies trail… next stop NSW

After more than eight years leading Victoria with little action on the gambling reform front, Premier Daniel Andrews stepped up yesterday and unveiled the most far-reaching package of poker machine reform that we’ve seen from any jurisdiction.

Pokies reform is normally something that emerges in an election context, such as the Gillard-Wilkie-Xenophon minority government’s mandatory pre-commitment agreement in 2010, Tasmanian Labor’s election pledge from opposition to fully remove pub pokies in 2017 and Dominic Perrottet’s brave cashless pokies promise at this year’s NSW election.

This time, the package has come out of the blue, with not even a parliamentary committee inquiry or a public submissions process. 

As for the details, Victoria will no longer have the longest operating hours in Australia. At the moment, venues have the option of which four hours they choose to close for, allowing 24-hour pokies with sequenced closing times by big operators like Endeavour Group, which drains almost $700 million a year from gamblers nationally.

From next year, all Victorian pubs and clubs with pokies must close from 4am until 10am. It will be Crown or home at 4am, for those determined to gamble all night.

But wait, there’s more. Victoria is going cashless and the “spin rate” between gambles will be increased from 2.1 seconds to three seconds.

Gamblers will also only be able to load a maximum of $100 onto their mandatory card each time. At the moment, they can load up to $1000 and there is no limit on carded play. However, gamblers are currently limited to $500 in cash withdrawals from a venue over any 24-hour period. This will become redundant when cash play is fully banned.

It doesn’t stop there. Andrews even fronted the cameras (see Nine and Seven’s 6pm packages from last night) with two elderly women who suffered enormous losses from their addictions to the machines, including 71-year-old Carolyn Crawford, who went to jail after stealing $400,000 from her employer to feed her addiction. In other words, he’s actively working with Tim Costello and The Alliance for Gambling Reform.

How the worm has turned. Andrews is the former Victorian gaming minister and has long had close ties to pubs and clubs.

His government legislated for new 20-year pokies licenses in 2017, even though he promised nothing of the sort from opposition during the 2014 Victorian election and the existing 10-year licenses weren’t due to expire until August 16 2022.

After this legislation had passed, the Victorian division of the Australian Hotels Association (AHA) donated a record $761,000 to the Victorian ALP for its 2018 reelection campaign, which it won in a landslide.

The long-serving president of the Victorian AHA, Peter Burnett, passed unexpectedly in 2019 and Andrews spoke at the funeral of his “good friend”.

The departure of this friend in the pokies industry was presumably a factor in yesterday’s about-face, but there were clearly other issues at play. Victoria has effectively banned corporate donations, meaning it is no longer legal for the AHA to make or promise big donations to either side of Victorian politics.

Just like the way former NSW gambling minister Victor Dominello drove the case for pokies reform, Victoria’s latest gambling minister, Melissa Horne, has been a genuine advocate for change, unlike her predecessor Marlene Kairouz, who was more interested in factional battles with her great mate Adem Somyurek.

Then, of course, there was the royal commission into Crown Resorts which led to legislation that, amongst other things, will force them to adopt cashless pokies at Crown Melbourne next year. How can you continue to allow cash at pubs and clubs when it is going to be banned at the casino?

The Victorian government was also embarrassed by the fact that it was a NSW inquiry that uncovered widespread money laundering and dubious practices at Crown Melbourne. As a result, it commissioned its own inquiry and the regulator subsequently got reconstituted with a whole new leadership team.

Yesterday’s announcement wasn’t all one-way traffic — the industry got one key win.

The Victorian Responsible Gambling Foundation will be abolished by July next year, with its key functions transferred to the new regulator.

The foundation was a well-funded outfit and there was nothing like it any other jurisdiction. It produced and funded lots of interesting research and delivered numerous programs ranging from gambler help services to its “Love the game, not the odds” efforts which sponsored AFL clubs and kept gambling brands off their jumpers.

Its abolition is expected to save the government more than $20 million a year.

If the reforms are effective, there will also be a revenue impact. Victoria’s 2023-24 budget forecast total revenue of $89.3 billion. Gambling was forecast to bring in $2.56 billion or 2.87%, with pokies alone delivering $1.382 billion.

Then there is the delicate issue of sovereign risk. The pubs and clubs were due to pay more than $1 billion collectively for their new 20-year licences on August 16 last year. Some have opted for an instalment plan.

Less than a year later, the government has moved the goalposts — and it’s clearly a material move, as demonstrated by the 10% drop in Endeavour Group’s share price this morning, despite this attempt at reassurance by the company. As Alan Kohler argued in his recent column, the missing piece in Australia’s gambling reform debate is a national strategy for reducing industry revenue from $25 billion a year.

Victorian pokies took a record $2.8 billion from Victorian gamblers in calendar 2022 (excluding Crown) and if these reforms work, that figure should fall below $2 billion within five years.

Poker machines were a point of contention at Saturday’s RSL Victoria AGM as younger veterans push for the league to exit the industry and focus on veteran welfare.

The RSL is Victoria’s third biggest pokies operator after Endeavour and Crown Melbourne, taking about $270 million from its 50 venues in 2022, after paying (or promising to pay) more than $80 million in licensing fees for the privilege.

A clean RSL exit would require a deal with the government and the repayment of those fees, plus other transition arrangements for the 2000-plus affected staff. The missing element of yesterday’s package was some form of buyback or licence retirement scheme.

When the pubs and clubs inevitably complain about this, the government should offer them a decent exit pathway. Reducing the 30,000 Victoria licences would also increase the licence value for those who remain, softening the pain from yesterday’s changes.

There will be a national impact from yesterday’s unprecedented move. The major parties in Queensland are yet to offer any meaningful reform and surely NSW Premier Chris Minns won’t be able to sustain his go-slow approach to pokies reform now that his southern colleague has blazed the trail in such an unexpected way.

Has Daniel Andrews gone far enough with these new gambling regulations? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.