The Tasmanian premier, Peter Gutwein, has refused to provide key details about poker machine policy which critics say could result in a financial windfall for the state’s casino operator, Federal Group, declaring Saturday’s state election “is not about gaming reform”.
It comes at the end of a campaign in which both major parties have avoided talking about what was a central issue at the last election in 2018: the future of poker machines, and what that showed about where political power lay in the state.
Then, the Labor opposition promised to remove poker machines from pubs and clubs if elected, and gaming interests responded with what analysts believe was the most expensive privately funded campaign against a major party in the state’s history.
Three years on, poker machines continue to have a significant impact on the community, with new data revealing nearly $500m has been lost on them in the state since the last election, including $180m since Gutwein became premier in January last year.
The future of the industry remains unresolved after Gutwein called an early election before introducing gaming reform legislation to parliament. It is now promised later this year, but the political landscape has shifted.
A bruised Labor party, under the leader Rebecca White, dropped its opposition to pokies in pubs and clubs following the 2018 election. It was revealed this month it had recently signed a secret memorandum of understanding with the Tasmanian Hospitality Association promising to back the rights of pub and club owners to own and run the machines.
The Liberal government remains where it was in 2018 under then premier Will Hodgman, which analysts say largely mirrored a model proposed by the industry and Federal Group, the Sydney hotel company owned by the Farrell family that has held an exclusive pokies licence in the state for 50 years.
The government’s proposal would end Federal Group’s monopoly over Tasmania’s nearly 3,500 machines, which had long been criticised as anti-competitive. Instead, licences would be given to the pubs and clubs that currently host pokies in exchange for an annual fee. Federal Group would retain control over machines in its 12 hotels and its casinos in Launceston and Hobart.
The missing element is the tax rate to be paid by Federal Group on revenue from its casino machines. A range of critics, including former government officials and crossbench political candidates, have argued this decision could lead to a massive windfall for the Farrells to compensate the loss of their monopoly, and voters should know the government’s plan before voting.
The industry’s position is the proposed tax rate on casino pokies should be cut from the current 25% to 10% plus GST. In 2018, the government committed to making the casino rate different from the proposed new 45% rate in pubs and clubs, and endorsed Federal Group’s argument it should pay a similar amount to “comparable casino operations interstate”. The company named Townsville and Cairns, where casinos pay some of the lowest rates of tax.
The government said more details on its position would follow after the 2018 election. Three years later, that position is yet to be updated.
Anti-pokies campaigners, including the independent federal MP Andrew Wilkie, have estimated the government’s proposed tax regime and small annual licence fees could be worth $350m a year to the gaming industry if its proposal was adopted in full.
At the start of this campaign, Gutwein was asked repeatedly in an ABC radio interview what tax rate Federal Group would pay. His response each time was that “this election is not about gaming reform”.
Asked again at a press conference on Thursday, he said: “I’ve made it perfectly clear the poker machine gaming legislation reform was dealt with at the last election.
“What we would see as a result of that legislation and that reform is pubs and clubs would do better, the state government would do better. Importantly, we would have more money to spend on harm minimisation as well – and Federal [Group] would be the loser.”
Gutwein said the legislation would be released for public consultation later this year before going to parliament.
Federal Group has argued its casinos, Wrest Point in Hobart and Country Club in Launceston, are “the two most marginally profitable casinos in Australia” and that the proposed model would reduce its earnings by $10m a year.
Peter Hoult, a former head of government regulatory body the Tasmanian Liquor and Gaming Commission, said the premier’s refusal to release the new casino tax rate before the election was “just nonsense”.
“There’s just no way Treasury officials have not been working on and provided tax rates [for Federal Group] to the government,” he told Guardian Australia. “They will be trying to find a way to make a workable model out of what the government has proposed, but the reality is you can’t.”
Hoult was just as critical of Labor’s election pledge that it would do more to address harm minimisation from pokies, but not affect the industry’s viability. “That’s really the worst thing you can say,” he said. “If the industry doesn’t lose money, harm minimisation isn’t working. It’s a terrible outcome, and I think the ALP should be ashamed of themselves.”
White told the ABC on Thursday that Labor had listened to voters after losing the 2018 election, but would never walk away from protecting the most vulnerable in the community, and the hospitality industry would not have a veto over its harm strategy if it was elected.
Hoult said he believed politicians had learned there was “only pain” if they took on the industry. “It has just made it politically toxic to touch them again,” he said.
He said the ultimate losers would be Tasmanians, with about 40% of losses recorded by people with a gambling problem. “It is Tasmanian money being spent by Tasmanians, and if it wasn’t spent on pokies it would be spent on other things in Tasmania,” he said.
The Greens’ leader, Cassy O’Connor, said the casino tax rate would have a huge economic impact on the state.
“It is potentially hundreds of millions of dollars that won’t be going into hospitals, schools, new homes and community services,” O’Connor said.
Two high-profile independent candidates vying for seats in the multi-member Hobart electorate of Clark – parliamentary Speaker Sue Hickey, who was a Liberal MP until the eve of the election being called, and Kristie Johnston, the mayor of the heavily pokies affected Glenorchy municipality – have also been sharply critical.
At a joint press conference with Wilkie and Hickey on Thursday, Johnston said the harm poker machines caused in the community was “enormous” and accused the major parties of doing “dodgy deals behind closed doors with big business”.