Tuesday, 2 February 2010

Is it a club or a pub? More Manningham Mayhem.

The status of the Manningham Club was subject to review in 2004. The matter under review was whether this venue was operating as a club or was really a pub. It's a question of nearly $3 million in lost Victorian state revenue.

Remember that as a pokie club, instead of a pokie pub, the Manningham Club is relieved from paying the Community Benefit tax of 8.33%. This amounts to $2,296,659.81 since the 2005/2006 fiscal year. Here's the breakdown:
2005/06 pokie losses were $6,923,561 at $576,732.63
2006/07 pokie losses were $7,278,951 at $606,336.62
2007/08 pokie losses were $6,578,314 at $547,973.56
2008/09 pokie losses were $6,790,120 at $565,617.00
Click here to read the decision of the Victorian Casino and Gaming Authority in June 2004 where the matter of whether it was a club or a pub. was determined. Click here to read a later letter from that club.

In that matter it was found that a lease entered into by a company now associated with Woolworths Limited had what could be described as a profit sharing arrangement with that club. From later correspondence it would seem that this same arrangement continues and club status is enjoyed notwithstanding. As we have seen, the Woolworths’ associate’s web site characterises this and other club facilities as its own.

The Authority found stated in paragraph 32 of that decision as follows:
“Overall there does not seem to be a great deal as would distinguish the Club and its activities from those offered by many hotels. Also, in this case the Club is managed in the same interests as the adjoining hotel licensed premises and freehold owner. While it is not unusual for club gaming venues to be on land where the freehold is not vested in the venue operator, we see paragraph (a) as identifying the possibility that where the premises are owned by outside interests, the preferential tax rate on gaming revenue, intended for clubs because of their community contribution will actually benefit the freehold owner. We are fortified in this view by the increasing trend of clubs with gaming licenses being seen as attractive investment vehicles for private investors.”
It would seem that arrangements such as these impede the objectives of the community benefit fund. I wonder if this arrangement still exists?

If they do, such arrangements cost all Victorians a lot of money. The difference in pub or club status for a single venue such as Vegas at Waverley Gardens (Jeff Kennett's Hawthorn FC is the venue operator - Woolworths again an associate) potentially cost the tax payer over $3.3 million a year!

And Woolworths makes the profit.

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