Licenses to
allow pubs and clubs to own and operate electronic gaming machines (EGMs)
passed through Parliament in October/November of 2021 after the Labor party
abandoned its brief flirtation with a principles based policy approach.
It was a
watershed moment for the gambling industry. Years of funding and lobbying the
government were finally about to yield a jumbo jackpot with net profits from
EGMs estimated to rise by an average of 50 per cent for EGM pubs.
Federal
Hotels lost its monopoly ownership of EGMs but was compensated by the slashing
of taxes on EGMs at its two casinos and the knowledge that its twelve Vantage
pubs with EGMs were about to be become even more lucrative. Federal was also considered
as the front runner in the process to select a Licensed Monitoring Operator
(LMO) to replace its own Network Gaming which has been running the monopoly
network.
However
subsequent events have put a dampener on the industry’s euphoria. Federal
failed to win the LMO tender. Maxgaming a wholly owned subsidiary of the listed
gambling behemoth Tabcorp was awarded the job in August 2022.
Shortly thereafter the government announced
the introduction of mandatory pre commitment cards as a way to limit player
losses as part of a revised harm reduction strategy.
The outrage
from pub owners was predictable. For years they have been telling us that
problem gamblers were only 0.4 per cent of the population and the bleeding
hearts in the welfare lobby just wanted to rob the overwhelming majority of a
bit of harmless fun.
Private
mutterings are now telling a different tale. Without obsessives playing the
machines, bottom lines will be severely impacted. Federal Hotels in its 2022
Annual Report issued late October 2022 confessed it was unable to assess the
impact “at this point in time”.
This is a far cry from a year earlier when Federal Hotels was able to independently value eleven of its twelve Vantage pubs as part of a sale and leaseback arrangement with various associated parties. This was disclosed in it 2022 Annual Report.
