18 August, 2017
The Federal Group wants a tax cut for its Tasmanian casinos if it gives up ownership of poker machines to pubs and clubs.
- Federal Hotels has a monopoly on gaming machines in Tasmania
- There is a new proposal for pubs, clubs to own and operate their own poker machines
- State Government is reviewing gaming laws
- Joint Parliamentary Committee to make recommendations by September
Federal Group runs Tasmania’s two casinos and has owned the gambling licence monopoly since 1973, including every poker machine in the state — some of which are leased to other venues.
But that is under review and Federal Group’s managing director Greg Farrell told a parliamentary committee in Hobart today the company had negotiated a new system with the Tasmanian Hospitality Association.
From 2023, it would see gaming machines owned and operated by individual hotels and clubs, but Mr Farrell said Federal Group would lose $15 million a year in income if the plan went ahead.
Mr Farrell said the tax rate of 35 per cent on casino income would have to be cut.
“At the moment we’re looking at — for want of a different word — a single licence operator who’s able then to spread the tax burden over casino premises, and licenced hotels and the clubs, the game of Keno and table gaming,” he said.
“If you then fast forward to a future model where the casinos are separate from the network, then the casinos would require to have a taxation arrangement, a system that’s more fit for purpose for them being competitive against other like-sized regional casinos.”
Tax rates competitive, Hanna says
Federal’s corporate affairs director Daniel Hanna said the company was not looking to change the tax rate for electronic gaming machines (EGMs) in pubs.
“I guess it’s fair to say that under this proposal the tax rates in casinos on EGMs would be consistent with other regional casinos around Australia,” he said.
“In Cairns and Townsville and I think in the Northern Territory as well they are around the 20 per cent mark.”
The parliamentary inquiry is considering the future of Tasmania’s poker machine industry, along with their economic and social impact.
There are about 2,400 electronic gaming machines in hotels in Tasmania, and last financial year they took in $100 million.
Federal’s 30-year licence was extended for 20 years in 2003 following secret negotiations with the then Labor state government.
The current Liberal Government has said it wants to break the monopoly, opening the way for a “high rollers” casino at Hobart’s Museum of Old and New Art (MONA)
In a previous submission to the inquiry, Federal Group argued that if exclusive casino rights were removed, its licences for existing casinos should be longer-term, in line with other casinos interstate.
Pokie opponents reject proposal
Anglicare Tasmania said there was unequivocal proof poker machines caused harm in the community and they should be removed from pubs and clubs.
“Its hardly surprising to see the two sides industry who make the most money out of poker machines come together and stitch up a deal,” researcher Meg Webb said.
“However what we have in front of us is an opportunity to make good public policy in the best interests of Tasmania and that’s not the best interests of the industry.
“We’ve had industry focused policy, this is another proposal that presents us with industry focused policy.
“What we need is people focused policy.
“The best way to reduce the harm is to take them out of the community and only have them in casino environments.
“Right now our state budget relies on poker taxes for less than 1 per cent of its revenue, if we go down this path we’re going to become more reliant on it and government is going to become more compromised in the kind of good public policy can make in the interest of Tasmanian people.”
Tasmanian independent MP Andrew Wilkie has urged the State Government to rule against pubs and clubs owning their own pokies.
Mr Wilkie said the pressure was on the Government to make a decision in line with public interest.
“This grubby scheme that’s been dreamt up by the casino and hospitality sector, it’s not in the public interest and it must be dismissed by the State Government.”
“The community is sick and tired of poker machines in the pubs and in the clubs, the community is demanding that those machines be removed,” he said.
Premier Will Hodgman welcomed the submission and called on all other groups and individuals interested in the future of gaming to also make submissions.
“We welcome all submissions, I want to state very clearly that any agreement struck by any organisations are a matter for them and the government has no part in that,” he said.