Wednesday, 21 February 2018

RSL pokie porkies

The release of player loss figures for each individual pokie venue casts a huge pall of doubt over the claims by the Glenorchy RSL that removal of pokies will be the swan song for the Club and the end of life as we know it.

The Club’s haul for the 2015/16 year, the total of player losses, was $590,000. This is only a fraction of the $4.5 million lost at the Mecca of misery, the Elwick Hotel just up the road with the same number of machines.

But with losses of about $20,000 per pokie there’s no money being made by the Club. Anyone familiar with the industry knows that when player losses slip below $20,000 per pokie it’s time to summon the pokie machine undertaker.
Covering fixed costs, mainly machine hire, is the key. The Club is struggling to do so. The Elwick El Dorado on the other hand, covers the same level of machine hire costs by 11 o'clock every Monday morning.  By late afternoon the week's wages have been covered. The rest of the week is largely clear profit.

With player losses at $590,000, the net amount of commission retained by the RSL Club, after machine hire fees, is estimated to be only $43,000 . This is before any venue expenses such as wages. The rest goes to Federal Group's Network Gaming.

Wages are or should be about 7.2 per cent of losses which coincidentally amounts to $43,000.

Hence after staff wages, roughly one FTE covering pokie operations, there’s nothing left. Zilch. And that’s without any other overheads like electricity to drive the little darlings and cleaning up afterwards.

The industry usually exaggerates the number of pokie employees. Cognitive bias is widespread. If there are more then losses will be even greater.

Yet despite the figures we were treated to the appalling public spectacle choreographed by the Love Your Local group that without pokies the Club’s days are numbered, when in fact Rebecca White might be doing the Club’s bottom line a favour by removing them.

Using straw men is standard when promoting messages. David Foster was quite happy to assert his aging mother’s monthly trips to her local to happily lose $10 to the pokies were a necessary and important contributor to both our social fabric and the local pub. The notion that little old ladies adding 75 cents a week to a pub’s bottom line were representative of punters who make pokie pubs profitable is quite ridiculous. Yet David managed it with a straight face. Mrs Foster's inalienable right to put a couple of dollars into the pokies and help her local is a smokescreen for allowing the continuation of an activity that wouldn't exist without the contributions of problem gamblers. Using diggers to promote the same message not surprisingly quickly attracted public opprobrium.

Glenorchy RSL files financial statements with the Australian Charities and Not-for-profits Commission. Like most clubs it found out the hard way how difficult it can be to run a kitchen. Pricing and menu selection, buying wisely, portion control, wastage, preventing inventory from accompanying staff home each night, there’s a host of problems for novices trying to run a kitchen. The Club lost almost $200,000 over a few years trying to overcome problems before surrendering and leasing the kitchen to a third party to run. All part of the difficulties in running a club offering the range of services which it does.

The loss of pokies is unlikely to be as calamitous for the RSL as suggested, certainly less than other self inflicted damage of recent years. It could well be a blessing given the latest turnover figure show pokie losses falling below the critical $20,000 per machine.

The Club could have done its members a far better service by seeking an increase in the Keno commission from the current paltry 20 per cent up to the proposed Liberal pokie commission rate of 50 per cent rather than agreeing to participate in a shameful stunt to maintain pokies in the community when they are of little benefit to the Club and even less to the local community.

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