AUSTRALIA

Political donations under fire in latest anti-industry salvo

Australia’s gambling industry is facing mounting political pressure across many areas of the country, with campaigners targeting political donations in an attempt to reduce the lobbying power of the sector.

The Alliance for Gambling Reform has called for a complete ban on political donations from the gaming industry, after recent disclosures found that more than A$1.5 million ($1.18 million) was donated to major political parties in 2016/17, local media reports.

According to analysis by the AGR, in 2016/17, there were 20 seperate gambling industry donations to the federal Labor Party, totalling $330,650, while the Coalition received almost $1 million in donations. Crown Resorts, Tabcorp, Clubs NSW, Clubs Australia and the Australian Hotels Association were revealed as major gambling donors.

Tim Costello, director of the Alliance, said that gambling harm will continue in Australia until the “political funding tap is completely turned off.”

Costello added that there is a good chance that the reported numbers are understated, with current rules stating that only donations over $13,200 need to be disclosed. Costello also said that a large amount of the donations were focused in NSW, calling the state the most “pokies-captured jurisdiction.”

The issue of donations hit the headlines recently in Tasmania’s elections. The opposition Labor Party ran on a platform promising to ban all pokies from bars and clubs. The incumbent Liberal Party accused Labor of taking political donations from the industry “under the table,” despite its reported stand against the machines.

Meanwhile, in South Australia gambling also featured front and center in recent election campaigns. However, anti-gambling crusader Nick Xenophon appears to have moderated his stance, backing off a pledge to completely ban pokies.

He said he now wanted to reduce poker machine numbers by half in hotels which currently have 10 or more over the next five years.

His target would be to cut the numbers in hotels and clubs from about 12,100 to 8,000. His party also plans to cap each spin at $1, remove EFTPOS access near machines and ban political donations from the gambling industry.

Our policies will be a key negotiating plank to keep the next government of [South Australia] accountable on such an important issue, should we have the seats in parliament to influence that change.

“Our policies will be a key negotiating plank to keep the next government of [South Australia] accountable on such an important issue, should we have the seats in parliament to influence that change,” Xenophon was cited as saying by local media.

The increasingly hostile environment and mounting regulatory pressure is taking its toll on the industry, with British bookmaking giant William Hill becoming the latest to exist, selling its Australian business to CrownBet.

“Given the credit betting ban in Australia and the likely introduction of a point of consumption tax in a number of states, it is clear that profitability will increasingly come under pressure,” the company said.

Amendments to the Interactive Gambling Act, passed last year, create a hostile environment for online operators, effectively banning all online gambling apart from sports betting and lotteries. It further prohibits in-play betting and from February this year banned online bookmakers from offering credit betting.

Last year, ads during live sports tournaments were banned, while operators licensed in the Northern Territory were recently told to stop accepting and paying out bets in cryptocurrencies.

According to the Australian Financial Review, the Northern Territory Racing Commission sent an email to all corporate bookmakers registered in the territory recently, asking all to stop accepting bets in bitcoin and other cryptocurrency.

“The chairman of the Racing Commission ... is intending to issue a formal communique to all sports bookmakers and betting exchange operators licensed in the NT if currently transacting in cryptocurrency (for example Bitcoin, Ethereum and the like) for their wagering operations to immediately cease and desist,” the email said.

Donaco warns legal spat to hit profit

Donaco International said on Tuesday that it does not expect to post a statutory net profit for the 2018 fiscal year, due to an anticipated impairment charge of about A$144 million (US$113.3 million).

The Australia-listed company said the impairment is the direct result of the breaches of agreement by a former Thai vendor, who had been operating competing gaming activities next to its resort in Cambodia without consent.

While a preliminary injunction was granted against the defendants, the overall litigation continues - with Donaco now claiming damages of US$120 million. Donaco said that the impairment won’t have an impact on the company’s cash flows, but will impact on the company’s statutory net profit for the year.

The impact will also stretch into the company’s capital management plans for the 2018 financial year, which takes into account forecasted net profit.

Tabcorp profit plunges by half

Tabcorp Holdings’ statutory net profit fell more than 50 percent in the first half of the 2018 financial year.

Tabcorp said NPAT and EPS were adversely impacted by significant items after tax of A$57.4 million (US$44.9 million), which comprised of Tatts Group acquisition related costs; Sun Bets onerous contract provision; Sun Bets impairment; Luxbet closure costs and loss on the Odyssey divestment, all of which was partially offset by the net gain on the Tatts cash-settled equity swap. Revenues reached $1.4 billion in the interim period, up 18.7 percent year-on-year.

The company completed its landmark merger with lottery giant Tatts Group late last year.