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How the gambling lobby makes a strong case for political reform

Introduction by Croakey: To make the case for reforming political donation and disclosure laws and establishing a federal Independent Commission Against Corruption, we need only look to the recent history of the gambling lobby, according to Associate Professor Charles Livingstone.

His article below, first published at Pearls and Irritations, provides plenty of fodder for conversations at a forthcoming virtual #CroakeyGO that will put a spotlight on #GamblingHarms (read more about the event here).

It also makes timely reading given a current push for pokies reform in NSW.


Charles Livingstone writes:

In 2010, when independent MP Andrew Wilkie was negotiating with Labor leader Julia Gillard on potential support to allow the ALP to govern after the hung election, one of his requirements was meaningful reform of poker machine regulation.

Wilkie asked for two reforms in this policy area, both of them recommended in the Productivity Commission report on Gambling published that year: the reduction of maximum bets on poker machines in clubs and pubs to $1 per ‘spin’, and the institution of a jurisdiction wide, universal pre-commitment system.

The logic of these initiatives was (and remains) clear, and evidence-based. Reducing maximum bets was likely to reduce the spending of high risk (or, as the industry calls them, ‘problem’) gamblers; and the pre-commitment system would allow people to make decisions in advance about how much they were prepared to spend in pursuit of their poker machine use.

Both are technically straightforward, and both have become increasingly viable with advances in technology. That’s not to say they were not viable at the time. Their feasibility was never in doubt.

Wilkie’s requests were considered by Gillard’s office, and one was immediately rejected – the reduction in maximum bet. It seems likely that some sections of the gambling lobby – ClubsNSW, perhaps – had input into this decision. However, the pre-commitment request was agreed.

Fight was on

Almost immediately, the lobby swung into action. Rallying behind ClubsNSW, thought to have more credibility because of its much vaunted community contributions (spoiler: such contributions were, and are, a miniscule proportion of losses), it was made clear that money was no object, and that the reforms would be fought tooth and nail.

All sectors of the pokie gambling business were involved in the operation, including the casinos and the Australian Hotels Association, but the spearhead was Anthony Ball, CEO of ClubsNSW, and a skilled lobbyist who had the advantage of training from no less formidable an organisation than the National Rifle Association, that bastion of Second Amendment rights in the US.

Marginal seats held by ALP members were targeted, notably in NSW and Queensland. Already on a razor thin Parliamentary base, this caused consternation amongst Labor backbenchers. High profile activities targeting some such seat-holders were enough to convince others that pursuing this ‘fringe’ reform was not politically viable, and eventually Gillard persuaded LNP member Peter Slipper to abandon his party in order to become Speaker. The agreement with Wilkie lapsed, and the Gillard Government passed anodyne legislation instead of any real reform.

One of the first acts of the incoming Abbott Government after the 2013 election was to repeal the legislation the Gillard Government had adopted. The Minister responsible for this was Kevin Andrews, a suburban Victorian MP who had, somehow, become the recipient of significant largesse from both ClubsNSW and the Victorian branch of the AHA.

Of course, Andrews denies any connection between his government’s gambling policies and the donations his campaign received from these organisations. Andrews was also very actively campaigning during the election period with support from ClubsNSW, including their publication on the internet of video outlining their policy (in which ‘responsible gambling’ and individual responsibility were key themes). One might think that such a policy had been prepared by the industry, so favourable was it to their perspective.

Throughout this period, ClubsNSW continued to provide regular, if relatively modest donations to their friends in the ALP (and somewhat more generous donations to the LNP). Such a steady stream of funds are conducive to regular access, and in turn to intelligence about, and input into, policy ideas.

It’s not just politicians, either. Having research support is a critical field of influence, and ClubsNSW has, for example, used its 2017 Annual Report to explain its ‘investment’ in such resources with prominent gambling researchers at Sydney University.

Revolving doors

Since that period, ClubsNSW, the AHA, and Crown Resorts Ltd have been regular and prolific donors to politicians from both major parties, although in recent times the LNP has been more in favour (perhaps because more in government). Despite this tendency to favour the conservatives, the gambling lobby has also been very keen to snap up former politicians and apparatchiks from the ALP. Presumably access is not as partisan as we might think.

Crown Resorts Ltd has the services of two Labor notables in Karl Bitar and Mark Arbib, former party secretary and Senator, respectively. Former Liberal Minister Helen Coonan is now Chair of the Board, and Tony Abbott’s former adviser Peta Credlin took a role with James Packer (major Crown shareholder), but left after six months to ramp up her gig at SkyNews.

There is no shortage of post-political appointments to engage the talents of former politicians, happily. Former Victorian Minister in the Cain-Kirner government, David White, left politics to become a lobbyist for Hawker Britton, with his principal client being Tattersall’s, who until 2012 enjoyed the duopoly of poker machine operations in Victoria with TabCorp, with which company they merged in 2017.

Former national Party Minister Peter McGuaran went from politics to the horse racing industry. After working with Thoroughbred Breeders Australia he was CEO of Racing Australia from 2012-16, leaving to work with TabCorp in 2017. He took up a position as Consul-General for Australia in Houston in 2018.

Racing Australia appointed former NSW Premier Barry O’Farrell as its CEO in 2018. In 2020 he was appointed as Australia’s High Commissioner to India.

Josh Landis, former staff member for quondam NSW Treasurer Eric Rosendaal, and long-time ‘public affairs’ manager to ClubsNSW, succeeded Anthony Ball as ClubsNSW CEO in May this year. He wasted no time in trumpeting his political influence, boasting that ClubsNSW had ‘heavily influenced’ the NSW Government’s decision to allow clubs to reopen to up to 500 patrons, as the COVID-19 restrictions were relaxed.

Of course, NSW LNP governments have been very close to the clubs for some time. After Barry O’Farrell’s election as NSW Premier, he signed a Memorandum of Understanding with ClubsNSW. His successor, Mike Baird, did the same before the 2014 election. Current Premier Gladys Berejiklian did the same in 2019.

In essence, the memoranda provide significant guarantees to clubland NSW. The quid pro quo appears to be political protection for NSW’s massive poker machine business, which reaps in losses of over $6.5 billion per year, 70 percent of it going to clubs. Pokies in the casino are not counted in that total. NSW clubs and pubs are responsible for over 50 percent of Australia’s pokie losses in clubs and pubs. That is a revenue stream well worth a bit of protection.

Victorian politics is not immune to this level of influence, although it has not been reduced to a formal memorandum. The AHA gave $761,000 to the ALP ahead of the last Victorian election, reportedly to head off the Green Party’s push for better regulation. In Victoria, hotels make twice as much from pokies as clubs, reversing the power balance (and perhaps the lobbying prowess) of the two big gambling sectors.

Crown power

Crown Resorts Limited, operators of the Victorian and WA casinos, have led a charmed life for many years. Although not major donors to politicians (in the scheme of things), the Packers clearly had a strong grip on politicians over many years. The rapid approval of the Barangaroo development, which was not without controversy, is a case in point.

Both sides of politics have fallen over themselves to give Crown significant benefits, In Victoria’s case, this includes indemnifying the casino for up to $200 million in the event that harm minimisation measures have adverse impacts on the casino’s profitability. Although this was Liberal legislation, the ALP happily supported it.

Only now, as a NSW Inquiry examines the suitability of Crown to be a licensee, is the whole operation beginning to look a little shaky. Recent revelations that full page advertisements denying allegations by the Nine papers and 60 minutes misled the stock exchange are perhaps the least of their difficulties.

The mass arrest of Crown operatives in China, money laundering and other serious allegations against Crown’s gambling operations (including a record $300,000 fine levied by the Victorian regulator for machine tampering), the failed attempt by Lawrence Ho to acquire a significant stake in Crown, and recent revelations about information being exclusively funnelled to Mr Packer, suggest that political cover can only be effective for so long.

Nonetheless, Crown’s board is stacked with powerful figures from the big end of town. Helen Coonan, now chair, is a former LNP government Minister. Jane Halton, former Secretary of the Federal Department of Health and ‘kid’s overboard’ veteran, is a board member, as is former CEO of the Australian Football League, Andrew Demetriou. Joining these luminaries is former Federal Chief Medical Officer John Horvath, and media-buyer extraordinaire and prominent Melbournian Harold Mitchell, amongst others. Given recent developments, whether the board remains intact is an interesting question.

Critics, including this writer, have long believed that the cover provided to Crown by this powerful and well-connected board, and by slick and effective operators like Arbib and Bitar, has neutered the regulatory oversight of the Victorian regulator, the Victorian Commission for Gambling and Liquor Regulation. Only after whistleblower revelations, supported by independent MP Andrew Wilkie, did the VCGLR act on the machine tampering allegations. The money laundering matters being investigated in NSW were similarly a product of whistle blower revelations.

In NSW, the long political protection of clubs is also beginning to show signs of erosion. Dee Why RSL has been penalised in relation to the suicide of Garry Van Duinen, a gambler who was rewarded by the club for the massive amounts of money he lost on its poker machines. The RSL is appealing the penalties and the conditions imposed on their licence, but such a development has not been previously encountered in clubland NSW. Australian Liquor and Hospitality, the pokie operating arm of Woolworths, was also penalised earlier this year for breaching ‘responsible gambling’ guidelines and encouraging people to continue gambling, despite knowing that they were vulnerable.

Lobbying and access to politicians has helped to shroud such activities (and many others) from scrutiny. Political donations are an important tool to allow vested interests and rent seekers to get the ear of politicians. So are invitations to private boxes at football or other sporting events; tickets to the Opera, or to the latest musical; opportunities to use local venues for politicking; or to be seen as a man of the people.

Under the cover of these, politicians are groomed, recruited, and enrolled. The gambling lobby are experts at this.

Until we fundamentally reform donation and disclosure laws, open up political diaries, curtail largesse, institute a federal Independent Commission Against Corruption, and shut the revolving door of post-political jobs for the girls and boys, we can expect the gambling (and every other) lobby to continue inflicting endless harm on vulnerable communities.

Charles Livingstone is an Associate Professor in the School of Public Health & Preventive Medicine at Monash University, specialising in gambling research. This article was first published at Pearls and Irritations and is republished here with permission.

Read more about the #CroakeyGO on #GamblingHarms

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