Pokie backflip?

The extension of pokie machine into community pubs and clubs was initially bitterly opposed by the Federal Group. Until it got a better deal. 

In the interim it submitted an alternative  to a LegCo inquiry in 1993 proposing increased numbers of pokies at the two casinos.

What Ms White is now proposing and what Federal Group now ferociously opposes, is virtually the same as the policy it fully supported in 1993. 

The following are snapshots from the 1993 submission:

Liberals' pokie policy

It’s easy to summarise the Libs’ pokie policy. They have simply adopted THA and Federal Group’s position. Without amendment.

When Rebecca White moved the goalposts the Libs were left flatfooted with a urgent need to find a plausible alternative.

Yet despite the mountain of evidence presented to the parliamentary inquiry plus its 72 findings and 23 recommendations, despite its own post 2023 framework  that specified allocation of venue licenses by a market based mechanism, the Libs opted instead to adopt the THA/ Federal proposal in its entirety, a proposal lodged so late in the life of the parliamentary committee it didn’t have enough time to consider it in detail.

Federal Group: What will the New Year bring?

As the clock ticks over to start what is bound to be a watershed year for the Federal Group, few will take as much interest as the Group’s bankers. Rebecca White’s undertaking to remove pokies from community pubs and clubs after 2023 should she be successful at the March 2018 election will precipitate a major overhaul.

Back in 2016 Federal Group was treading water. The most recent financials reveal there was no improvement in the 2017 year. Specifically:

·       Turnover was the same at $512 million.

·       Expenses increased slightly causing net operating cash to continue its downward slide from $51 million to $46 million. That’s the lowest figure since 2001, sixteen years ago.

·       Net profit before tax fell from $28 million to $20 million.

·       Net profit after tax fell to $14 million.

·       As per usual shareholders drew out most of the after tax profits. Dividends of $11 million were paid in 2017. Since pokies in pubs started in 1997 shareholders have withdrawn $250 million in dividends.

·       Capital hungry tourism businesses can’t keep up that level of dividend payments without borrowings. Another $4.5 million was needed. Capex spending was $31 million, about $20 million more than the inadequate annual spend of the last few years. The fit out of MACg01was probably the reason for this increase.