Thursday, 28 January 2010

Manningham Money Madness

The purpose of the Community Benefit Statement is to provide the public with a comprehensive view of how pokie money is spent by clubs to benefit the community. Remember that clubs enjoy a reduced pokie tax rate so that all Victorians have an interest in the boost-up given to pokie clubs. The law also requires that if they don't spend the money on the community then pokie club has to pay any shortfall in tax to the Victorian government. Unfortunately, "inconsistent" and "inexplicable" are the words I would use to describe the story set out in the Community Benefit Statements lodged for The Manningham Club.

The intent of this blog and the next PokieAct blog is to have a detailed look at the public records as well as posting relevant extracts.

To begin with, let's look at how much money has been lost on the pokies at the Manningham Club:
2005/06 pokie losses were $6,923,561 at $69,236 per pokie
2006/07 pokie losses were $7,278,951 at $72,790 per pokie
2007/08 pokie losses were $6,578,314 at $65,783 per pokie
2008/09 pokie losses were $6,790,120 at $67,901 per pokie
For the first 6 months of this fiscal year, the pokie losses at the Manningham were $3,284,907. That's a lot of money taken out of the local Manningham community. What did we get for it?

It is important to bear in mind that the Victorian government considers that the existence of the club itself to be a public benefit. Betty Con Walker in her book called Casino Clubs NSW expresses the concept well:
"...money spent on wages and salaries is a 'community contribution'. Ordinary businesses would regard that spending as an 'expense'"
So let's look at the wages item. Given our statewide subsidy, clubs employing people is a community benefit we all somehow share in.
2004 - 1,094,388
2005 - 1,034,021
2006 - 1,030,702
2007 - 1,031,477
2008 - 873,667
2009 - 396,949
It seems that wages have dramatically dropped without correlation to pokie revenue. It is only a guess but I would have thought that the management fee for running these pokies was included in this number. It could be that Woolies associate has taken over the staffing and that the remaining number represents their management fee.

Whatever it is, the public benefit of the Manningham Club employing Victorians is not significant.

Wednesday, 27 January 2010

Who runs the Manningham Club?

If you read recent blogs about The Rex and Vic Inn Williamstown, you are about to get a renewed sense of that you have been here somewhere before.

Let's start at the ground floor. Who owns the land? Here's a reproduction of a recent title search:The land is owned by a company called ALH Group Properties Holdings Limited. This company is noted on page 139 of the Woolworths annual report as being part of the ALH Group. ALH is reported as the name of the venture 75% owned by Woolworths and 25% owned by Bruce Mathieson's associated interests.

There is a mortgage on the land granted in favour of Woolworths Limited.

It is pure speculation whether the Manningham Club has a lease for the whole or part of the building. I wonder if it includes the TAB, motel units, the Brisbane Lions office or the BWS outlet? It may be limited to the pokie area. It may be that the club has no reason for its existence other than to operate these pokies.

The Manningham Club is a club license. This means that the venue operator does not have to pay 8 1/3% Community Benefit Fund tax. There is also favourable terms relating to pokie entitlements under the new Gambling Regulations. The Manningham Club Ltd is the venue operator. Had Woolworths, ALH or some other 'for profit' company been the venue operator, the Community Benefit Fund tax would have been payable. As a result, the pokie cash flow is improved. This improved cash flow could be available to the club, lease payments for the land or management fees for running the pokie operations.

To see all the parties associated with Manningham Club Ltd, you need to search the Victorian Gambling Commission records. Here's the screen capture of the search taken today: Click on the image and you see a list of Woolworths' directors including chairman James Strong and CEO, Michael Luscombe. Remember Mr Luscombe wants to transform their venues into "centres of family entertainment". But the venue operator is Manningham Club Ltd!

This is where it gets confusing. Click here to have a look at ALH's own published list of their Victorian venues. The screen shot is below. You'll have to click on the image to read it.Please be assured that Manningham Hotel and Club is on the list of ALH's venues. Is the Manningham Club a 75% run Woolworths operation?

The Community Benefit tax concession provided to the Manningham Club is intended to recognise that clubs operate for the benefit of the community. It seems to be the reverse in this instance as the club is utilising other local clubs to build its membership and presumably its pokie take. Have a look at this screen capture taken from the Bulleen Templestowe Basketball Club Inc.Small clubs soliciting their members to join a pokie club? Note this critical sentance:
"Every dollar spent at the Manningham Club earns points that entitles our Club to financial benefits."
What exactly are the financial benefits to the Bulleen Templestowe Basketball Club that is being promoted? Do they get some portion of the pokie take?

Does Woolworths need to use small local clubs to build their pokie take? Is this the building of "centres of family entertainment" that is Michael Luscombe's goal?

This is pokie management madness.

Friday, 15 January 2010

Woolies Exploits Pokie Subsidies

Woolworths, "The Pokies People", seem to be relentless in their pursuit of converting gambling losses into earnings. By their business of leasing and operating state subsidised pokie clubs, search of gambling commission records disclose that their ALH joint venture receives more from the operations than the associated club itself. And even though public money is at stake, the Victorian government does not want the public to know the particulars.

Here's the way I believe they do it. Click here to see how the ownership of The Rex pokie club is put together. So it seems that you have a Woolworths (The Pokies People) associate owning the land and maybe another Woolworths (The Pokies People) associate managing the pokies. In Victoria, pokie clubs are required to lodge a document setting out what they spent to benefit the community. Unsurprisingly, its called a Community Benefit Statement. Click here to read the latest Community Benefit Statement for The Rex. The graphic below is a screen shot of the latest relevant numbers:4 figures are noteworthy:
  • $10 was given to charity
  • $171,305 went to the Port Melbourne Football Club
  • $89,657 was paid in management fees.
  • $129,504 went to rental
My guess is that the $89,657 management fees and the $129,504 was paid to an associate of Woolworths (The Pokies People). That's more than the footy club got and a lot more than the $10 that went to charity.

That's straightforward. The Vic Inn is something different. This is boring dry stuff but it does disclose a confusing picture. From the latest return it seems that the Doggies are not charged any rent nor any mangement fee. Or maybe its just not being disclosed. There are inconsistencies even though the signatory on all statements is Ross Blair-Holt as Chief Operating Officer. Yes, the form changed in 2009 but that did not prevent Mr Blair-Holt disclosing management fees or rent for The Rex.

Examination of the past Community Benefit Statements lodged for the Vic Inn show the following payments:
  • 2005 - Sporting - $105,538 / Rental $121,043
  • 2006 - Sporting - $149,990 / Rental $108,864
  • 2007 - Sporting - $0 / Rental $111,417
  • 2008 - No rental or sporting dividend disclosed. Expenditure of $42,727 on culture, $13,051 on player appearances, $25,540 on rental of Whitten Oval, Leeds Street and Barkly Street, $64,745 Football - direct costs and $12,427 on Spirit West.
Remember the statements recorded by the VCGR in the Club Edgewater decision about the Vic Inn providing "between $150,000 to $200,000 in profit annually" to the Footscray FC (click here to have a look at the extract)? It does not seem that these payments are fully disclosed in the Community Benefit Statements filed on behalf of the Vic Inn.

The 2009 CBS may tell the story of a massive catch up. The item for wages dropped from $552,308 to $407,849. Even if $45,864 is added back for workcover and superannuation, this is a decline in wages of nearly $100,000 or 18%. Perhaps 18% of the staff was fired.

In the 2009 CBS there is no record of payment of rental. There's no disclosure of management fees like the The Rex. The surprise is $423,164 now being expended on sporting facilities for club members, subsidising food and voluntary services. It's only a guess but perhaps this new money came from the rise in pokie losses from gamblers at the Vic Inn between 2008 and 2009. The increase was $441,725 (Total pokie losses at the Vic Inn were $3,931,693 at $65,528 per pokie).

The point is not the minutiae of whether there is a discrepancy or not. The point is that these pokie gambling operations get a government subsidy for a business that derives profit from a harmful business. If the public are subsidising, then the public should know everything. From these two venues what the public gets is either a picture of inconsistency (the Vic Inn) or a picture of Woolworths (The Pokies People) grossing more money than the venue operator itself.

In August 2008, I asked the Minister for Gaming, Hon Tony Robinson to disclose the nature of these management relationships that prey upon the tax relief given to pokie losses at these clubs. He would not even disclose who the parties were let alone the nature of the responsibilities set out in these agreement. Here's his letter (I have deleted my home address):By virtue of the harmful nature of pokie gambling, there can be no good reason for confidentiality. Remember also that the Victorian government censored my submission to the review of the gambling legislation when I wrote about Woolworths (The Pokies People) and mentioned the pokie club management agreements.

What are they hiding?

Wednesday, 13 January 2010

Who runs the Vic Inn?

If you read yesterday's blog about The Rex, you are about to get a sense of that you have been here somewhere before.

Let's start at the ground floor. Who owns the land? Here's a reproduction of a title search from 2 March 2009:The land is owned by a company called ALH Group Properties Holdings Limited. This company is noted on page 139 of the Woolworths annual report as being part of the ALH Group. ALH is reported as the name of the venture 75% owned by Woolworths and 25% owned by Bruce Mathieson's associated interests.

There is a mortgage on the land granted in favour of Woolworths Limited.

It is pure speculation whether the footy club has a lease for the whole or part of the building. I wonder if it includes the TAB or is the income from this part of Vic Inn reserved for the Woolworths / Mathieson joint venture?

The Vic Inn is a club license. This means that the venue operator does not have to pay 8 1/3% Community Benefit Fund tax. There is also favourable terms relating to pokie entitlements under the new Gambling Regulations. Footscray Football Club Ltd is the venue operator. Had Woolworths, ALH or some other 'for profit' company been the venue operator, the Community Benefit Fund tax would have been payable. As a result, the pokie cash flow is improved. This improved cash flow could be available to the club, lease payments for the land or management fees for running the pokie operations.

To see all the parties associated with Vic Inn, you need to search the Victorian Gambling Commission records. Here's the screen capture of the search taken today:Click on the image and you see a list of Woolworths' directors including chairman James Strong and CEO, Michael Luscombe. Remember Mr Luscombe wants to transform their venues into "centres of family entertainment". But the venue operator is Footscray Football Club Ltd!

This is where it gets confusing. Click here to have a look at ALH's own published list of their Victorian venues. The screen shot is below. You'll have to click on the image to read it.Please be assured that Victoria Inn Williamstown is on the list of ALH's venues.

But there's more. Recorded in the Victorian Gambling Commission's report of the Footscray Football Club's application for pokies at Club Edgewater is this paragraph:
This finding states that the Footscray FC has a lease over the Vic Inn. The guess is that the landlord is Woolworths.
"At present it provides between $150,000 and $200,000 in profit annually."
Woolworths are the pokie people.

The next blog has a look at these two Woolworths associated pokie clubs and their corresponding community benefit statements to see if we can figure out where at least some of the money is going.

Tuesday, 12 January 2010

Who runs The Rex?

Cr Janet Bolitho of the City of Port Phillip asked me to explain who actually owns The Rex pokie club. It's complicated. It involves Woolworths Limited. While legal, my view is that it inappropriately exploits Victorian pokie laws.

Let's start at the ground floor. Who owns the land? Here's a reproduction of a title search from 6 January 2010:
The land is owned by a company called ALH Group Properties. Holdings Limited. This company is noted on page 139 of the Woolworths annual report as being part of the ALH Group. ALH is reported as the name of the venture 75% owned by Woolworths and 25% owned by Bruce Mathieson's associated interests.

There is a mortgage on the land granted in favour of Woolworths Limited.

It is pure speculation whether the footy club has a lease for the whole or part of the building. I wonder if it includes the TAB or is the income from this part of The Rex reserved for the Woolworths / Mathieson joint venture?

The Rex is a club license. This means that the venue operator does not have to pay 8 1/3% Community Benefit Fund tax. There is also favourable terms relating to pokie entitlements under the new Gambling Regulations. Port Melbourne Football Club Ltd is the venue operator. Had Woolworths, ALH or some other 'for profit' company been the venue operator, the Community Benefit Fund tax would have been payable. As a result, the pokie cash flow is improved. This improved cash flow could be available to the club, lease payments for the land or management fees for running the pokie operations.

To see all the parties associated with The Rex, you need to search the Victorian Gambling Commission records. Here's the screen capture of the search taken today:

Click on the image and you see a list of Woolworths' directors including chairman James Strong and CEO, Michael Luscombe. Remember Mr Luscombe wants to transform their venues into "centres of family entertainment". But the venue operator is Port Melbourne Football Club Ltd!

This is where it gets confusing. Click here to have a look at ALH's own published list of their Victorian venues. The screen shot is below. You'll have to click on the image to read it.Please be assured that Rex - Port Melbourne is on the list of ALH's venues. Inside the venue the business cards reflects that list:It is reasonable to draw the conclusion that The Rex is run by Woolworths/Mathieson and that by virtue of their 75% control Woolworths is responsible for the day to day running of this pokie club.

Woolworths is also responsible for allowing unaccompanied children inside this gambling venue.

So is Mr Luscombe.

So is Mr Strong.

Friday, 8 January 2010

Opening the new campaign at Thomas Dux

Yesterday marked the first PokieAct appearance at a Woolworths grocery outlet. I am hoping that this will be the first of many. The purpose is two fold:
  1. Inform Woolworths staff and customers about Woolworths' pokie empire
  2. Urge Woolworths to ban children from their pokie pubs and clubs or, at least observe the National Principle that requires children to be removed from exposure to pokie gambling inside their pokie pubs and clubs.
Here's a picture of the PokieAct presence at Thomas Dux.If you think it looks small time and pathetic, then you would be correct. But you need to start somewhere.

Our self-imposed rules were to set up well out of the way of pedestrian traffic and ensure that our sign does not block vision of any Thomas Dux sign. I was ably assisted by volunteer Judy Latta who delivered a great question / statement at the Woolworths Annual General Meeting. We also did not approach people with our flyer but would respond to any question if asked. We were able to sign up a few great people with a real interest in the issue of children in pokie pubs and clubs.

I emailed local City of Port Phillip councillor Janet Bolitho who noted that the children inside The Rex pokie club as wearing the school uniform of the Port Melbourne primary school. She asked for further details on the ownership of The Rex. Those details were provided and will be reproduced in the next blog.

State ALP member for Parliament Martin Foley responding to a detailed email to take action on the matter gave no substantive response, instead lamely wishing "good luck with the protest".

Wednesday, 6 January 2010

Thomas Dux & The Rex Pokie Club

Woolworths is set to open their latest Thomas Dux store in Port Melbourne on Thursday, 7 January 2009. Described as a posh grocer, Thomas Dux drawcards include (according to a report in The Age 22/7/09) quality smallgoods, cheeses, fruit and vegetables. The Woolworths' associate leased almost 1000 square metres to become the second major supermarket on busy Bay Street after Coles. Another Woolworths associate also operates nearby, on Bay Street, the Rex pokie club.

In 2008 / 2009 gamblers at The Rex lost $6,500,124 at the rate of $114,037 per pokie... about $125,000 every week.

You may recall the PokieAct blog of 17 November where photographs of unaccompanied children inside The Rex were published.

Tomorrow, it's my intention to set up my banner on the public footpath outside of Thomas Dux on Bay Street and ask shoppers to sign a petition to stop Woolworths allowing children in The Rex pokie club by logging on to PokieAct.org.

Here's what the flyer will probably look like:
All are most welcome to drop by. It would be great to meet you. The Thomas Dux is located at 120 Bay Street Port Melbourne near the intersection of Bay and Graham Streets. I'll be there between 10AM and noon.

The Rex is located at the intersection of Bay and Graham Streets.

Tuesday, 5 January 2010

More Mathieson Mayhem

The Westend Market pokie pub is interesting as it represents Bruce Mathieson's own pokie practices undiluted by his association with Woolworths. Two days ago I wrote about his nonsense responsible practices. Another example is how he positions the ATM machine at the Westend.

Now bear in mind that Mr Mathieson signed the ALH letter representing that:
"ATMs are already away from and out of sight of gaming rooms as part of current guidelines.”
During my first inspection of the Westend in March 2008, I noted that the ATM was placed in the pokie room entrance so that gamblers at pokies #9-15 can see it. There was also a sign in the gaming room pointing to its location. There was another sign informing gamblers that there is another ATM in the entrance to the TAB and bar.

During my next inspection in August 2008, I noted that the ATM was still placed so that gamblers at pokies #9-15 could see it. I did not note the signs.

I took this photo during my last inspection on 10 November 2009Yes. That's right. The operator (i.e. Bruce Mathieson) wants you to perceive that the ATM is in the gaming room itself. Certainly not "already away from and out of sight of the gaming room". In fact, Mr Mathieson's people put up a sign promoting that fact in the space formerly occupied by the ATM in the pokie room entrance.

You make the judgement whether Mr Mathieson truly follows the policy he represented to the Productivity Commission on behalf of his joint venture company with Woolworths. Is this an indication that the ATM is "already away from and out of sight of the gaming room"?

Clearly it is not.

The truth however is more confusing. The ATM is located in a hallway between the pokie room and the TAB room. It's just that contrary to what he represents, Mr Mathieson believes that's it's OK for the ATM to be in the pokie room - and - OK to promote that location too.

And just to pour some salt on the wound of Mr Mathieson's care less practices, contrary to his own self exclusion policy, I did not see any promotion of a self exclusion facility during my November 2009 visit.

Monday, 4 January 2010

Woolworths Mislead Commission

It seems not enough for Woolworths to mislead their shareholders at the Annual General Meeting with bad information about their pokie practices. In their second submission, Woolworths' pokie associate ALH and ALH's CEO Bruce Mathieson now are trying to mislead the Productivity Commission. From these actions it seems like putting out misleading information is becoming their practice.

Click here to have a look at the ALH 2nd submission to the Productivity Commission.

Page 4 of at submission it states as follows:
"ATMs are already away from and out of sight of gaming rooms as part of current guidelines.”
At the annual general meeting of Woolworths Limited, held on 26 November 2009, Chairman James Strong made the following statement;
“In terms of the gaming room there are very strict rules about keeping ATMs out of sight.”
Both statements are untrue.

At the Woolworths’ AGM I addressed both shareholders and the board of directors and stated that Mr Strong’s statement was untrue. Yet Woolworths 75% controlled pokie associate persists to make these untrue statements of fact by the ALH submission to the Productivity Commission signed by Mr Mathieson.

While it has not been possible to review each associated Woolworths venue since the closure of the Commission’s public sessions in mid-December, I did instigate an inspection of the Woolworths’ associated Rose & Crown pokie pub located in Elizabeth, South Australia. This inspection was carried out on 30 December 2009. Here's a photo of what we saw.
At this venue, the ATM is located in the same room as the pokies, divided only by a glass partition. The ATM is visible to gamblers. Please note the lighted sign over the ATM attracts further attention to its location. Also note the large poker gambling poster next to the ATM.

If you click on this photo and have a close look, the child play area of green yellow and red is visible. Exterior advertising at this venue, located near a shopping mall, promotes the play area. While children may not be allowed in the pokie area itself, my opinion, from my own inspection, is that there is exposure to pokie gambling due to the open nature of the entrance to the pokie area at this venue. This practice contravenes the National Principles.

Click here to read the PokieWatch.org web page about the Rose & Crown
.

The next photograph was taken from the ATM looking back into the pokie area. Even though its blurry, it reinforces how visible the ATM really is.
In the interests of their own shareholders, Woolworths persistence with this claimed practice with respect to the visibility of their ATM machines must stop. Not only does it affect their credibility before the Productivity Commission, it reflects poorly on their claim to be "The Fresh Food People" and thereby the whole Woolworths' brand.

Sunday, 3 January 2010

Westend Market Responsible Code

The Westend Market pokie hotel is a venue associated with Bruce Mathieson and his family but not Woolworths Limited. It has 88 pokies and, last year, gamblers lost about $182,000 on each of them. I was interested in what Mr Mathieson's practices might be without Woolworths' involvement.

The VCGR web site discloses that the ALH Code of Conduct applies to the Westend Market. Bear in mind that Australian Leisure Holdings is the name of the company that apparently operates the Woolworths / Mathieson joint venture.

On Woolworths associated venue web sites there is typically a link to a web page called Responsible Service of Alcohol. Click here to read that page. There is a sub heading on that page relating to pokie gambling.

If a visitor clicks on the link to Mr Mathieson's Westend Market Responsible Service of Alcohol today, (3 January 2010) you see this graphic:If you believe that what you are reading is nonsense. You would be right.

It is nonsense. It is care less.

Welcome to 2010.