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Woolworths to divest from pokies and pubs

Anti-gambling groups are celebrating after supermarket giant Woolworths announced plans to divest from pubs and poker machines.

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Woolworths Group Limited said yesterday it would be combining its drinks and hospitality businesses, Endeavour Drinks and ALH (Woolworth’s hotels division) into a single entity, expected to be referred to as Endeavour Group Limited. It then “intends to pursue a separation of the business through a demerger or other value-accretive alternative.”

By retreating from its investment in ALH (in which Woolworths has 75 per cent ownership) the company appears to have accepted that involvement with poker machines is damaging to its brand.

“This is a globally significant moment for the gambling divestment movement, not unlike Rio Tinto getting out of coal,” said Tim Costello, director and spokesperson for The Alliance for Gambling Reform.

Woolworth’s ALH has been Australia’s third largest owners of poker machines, after Crown Casino and Star, with 286 of their pubs and clubs operating a whopping 12,000 poker machines.

ALH has also been revealed as an aggressive promoter of poker machine expansion. For example, last year staff in ALH pubs were revealed to be secretly recording and sharing detailed personal information about high-turnover gamblers and offered incentives to encourage them to stay in the venues playing poker machines longer, increasing their losses. Screenshots of the system were shared with Andrew Wilkie and were published by Fairfax media.

In one screenshot published, instructions at the top of the page in red, capital letters read: “WE HAVE A MASSIVE WEEKLY TARGET – 1.36 TO BEAT. WE NEED TO BEAT, WE NEED TO BE OUT ON THE FLOOR REALLY PUSHING DRINKS – IT’S TAX TIME SO PEOPLE WILL HAVE MORE MONEY TO SPEND. DO HAND OUT DRINK CARDS, BE OUT THERE AS MUCH AS POSSIBLE, DO WHATEVER YOU HAVE TO DO TO KEEP PEOPLE IN THE ROOM.”

Campaigners will no doubt be hoping that without Woolworths as majority owner, ALH being held to greater account by state regulators.

“Christians have always believed that the sovereignty of God, not the punt of a gamble, is how the world is organised. It’s organised by love, not by chaos and chance.” — Tim Costello

Tim Costello said “ALH has long been Australia’s biggest, most aggressive and most irresponsible pokies operator, pushing hard on loyalty schemes, offering up free liquor to gamblers and operating for the maximum amount of hours the law allows. It was also overly focused on running pokies pubs, rather than conventional bars. Only one in five Victorian pubs have poker machines, but ALH has pokies in 78 of its 81 Victorian pubs, proving that it is primarily a gambling-focused pubs business rather than a liquor business which reluctantly operates a gaming division.”

Woolworth’s joint venture partner in ALH, with 25 per cent ownership, is billionaire businessman Bruce Mathieson Senior of the Bruce Mathieson Group (‘BMG’). Mathieson has made his fortune from pokie profits and hotel trading.

Costello noted that Woolworth’s announcement will see the Mathieson family’s influence significantly reduced, saying: “It is good to see Woolworths regularise the corporate structure of its pokies empire, diluting the power currently held by billionaire joint venture partner Bruce Mathieson, who owns 25 per cent of the current ALH joint venture but has management control through his son, ALH CEO Bruce Mathieson Junior. The Mathieson family will own 14.6 per cent of Endeavour Group and have one board seat, so the days of aggressively running it like a private company will soon be over.”

Given that Woolworths will maintain a minority stake of around 15 per cent in the new Endeavour Group, Costello encouraged concerned customers to write to the supermarket, congratulating them on their decision to divest from poker machines, and urging them to finish the task by divesting completely.

It’s not just Woolies in Costello’s line of fire, but also political parties.

“If Coles and Woolworths no longer wish to be associated with such a toxic industry, why does the ALP continue to operate six pokie dens in Canberra and Sydney?” he asked. “I call on Anthony Albanese to start a debate inside Labor about getting out of the pokies.”

This backs up calls made by MP Andrew Willkie in February this year when he wrote in the Sydney Morning Herald, that “ACT Labor clubs operate almost 500 poker machines and pocketed a staggering $24 million in the losses of pokie players last financial year. And the Randwick Labor club, in Sydney, operates another 90 machines. All up, the various Labor clubs donated $2.5 million directly to the federal Labor Party. So it is directly funded with $2.5 million worth of poker machine pain. That’s a thumping share of the $35 million the Labor Party spent on its last federal election campaign.”

Whilst the fight against gambling clearly isn’t over yet, campaigners like Costello are seeing the fruit of their labour. In another ‘win’ this week, the Macquarie Group became the first major Australian bank to ban the use of its branded credits cards for gambling, with new regulations stating, “From 1 July 2019, we’ll be blocking the authorisation of transactions that are classified under the gambling merchant category code. This applies to transactions made on an EFTPOS terminal and online. That means from this date, you’ll no longer be able to use your credit card to make most transactions relating to gambling or lotteries.”

For Costello, both developments are welcome breakthroughs in this battle of good versus evil. He told Eternity,“Christians have always believed that the sovereignty of God, not the punt of a gamble, is how the world is organised. It’s organised by love, not by chaos and chance. Having 20 per cent of the world’s pokies here in Australia not only deceives and addicts people, but also attacks the idea of the sovereignty of God.”

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