Does Woolworths Own Poker Machines

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Woolworths and pokies

Following the speech by Senator Nick Xenophon about the pokies crisis, it is timely to consider whether corporate responsibility to the community or to shareholders can be achieved simultaneously by Woolworths Limited.
The first article below is by Stephen Mayne, Crikey founder
Stephen highlights in his article that Woolworths Limited is Australia's biggest poker machine operator. The article does not itself clearly explain how Woolworths can directly benefit from the level of player addiction in the community, so to help the community to understand this phenomenon better, the following links and explanations are provided directly to Woolworths Limited own disclosures (which as the Crikey article points out, are quite scarce)
The first link is to the disclosure of the number of Hotels and clubs owned via ALH Group. In 2007, it was 263.
The next link is to the disclosure of Earnings. The Hotels division is a billion dollar business with earnings to sales ratio of 17.79%
The next link is to the homepage of the Australian Leisure & Hospitality Group (ALH Group) which provides more details of the 270 venues operated. They claim to be a market leader in electronic gaming ... and wagering.
The ALH site discusses responsible gambling and introduces David Schwartz, the companies Responsible Gambling Ambassador, and provides details of the Responsible Gambling Awareness Week in Victoria.
On the page below that provides the background of David Schwartz, the company makes the following statement (bold and underline added by daviidv)

The ALH Group is committed to providing responsible gambling in our venues. Whilst gambling is enjoyed by the majority of people responsibly, ALH acknowledges that problem gambling is a serious community issue and that a small proportion of customers are harmed by their gambling activities.

The ALH Group has engaged David Schwarz, a well known ex AFL footballer and media identity as its Responsible Gambling Ambassador to provide employee education and customer awareness about the importance of “being honest with yourself about your gambling.”

ALH will continue to develop balanced businesses, offering patrons an overall entertainment experience including where appropriate, dining, drinking and gaming activities. Our goal is to ensure our hotels provide a safe and supportive environment where our customers make informed decisions about gambling and timely appropriate assistance and information is provided.

With Woolworths apparent altruistic view of responsible gambling, the community may well ask how to benchmark this in practice. The following link is to Pokie Watch with self explantory comment and references to Woolworths statements on their approaches.
Within a few minutes on the pokies watch site, you will be able to judge for yourself, by venue, how this responsible gambling benchmark is observed in practice. The pokies watch website shows that the community is well positioned to use the power of the internet to share information that will ultimately force the pokies industry to make their product less addictive and less harmful.
The community deserves to be protected from unsafe and harmful addictive products. Corporate statements, reviews and surveys and ambassadors serve no purpose at the 'stool level' .. addicted players would not generally be aware that 'being honest with yourself about your gambling' is the answer to the addiction ... clearly, this education is not reaching the growing number of problem pokie players ..
Daviidv says 'Senator Nick Xenophon and Senator Steve Fielding .. the time has come to transform the industry via new legislation that will make the design of the machines, jackpots and location of ATMs to pokies a less addictive and more community safe gambling product'.
And does Coles Myer share this 'side bet' on where easy pokies profits can be made .. yes, they do. See the news item below
PokieAct is run by the PokieWatch people. There are several stories, but this one seems a good place to start your further reading
One of the main themes of PokieAct is that children should not be groomed to become the next round of victims every time they go with parents for dinner at a venue with pokies. I absolutely agree. Although I have had conversations with the public when I speak at Sydney's Domain Speakers Corner that pokies rooms are now separated and more discreet, this is not the case at all. For example, and I do not know when, or why, but Blacktown RSL permanently closed the entry doors to 'Best Choice Buffett Restaurant' at the top of the entrance stairs, which on my last visit forced me to take my children past a room full of pokies and drinking areas to get access to the restaurant. This makes me sick that any business would deliberately choose to expose children to the lights and sounds of pokies. As with Woolworths, thankfully, when a business chooses to act in a manner which is so offensive, as a consumer, we have the freedom to choose where to spend money. Fair to say, I have personally chosen to shop with Woolworths competitors whenever possible, and not to expose my children to the pokies, which means we can no longer choose the buffett restaurant for dinner. When did a RSL lose its way to be able to justify making families take children through the pokies playing area. Disgusting !

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. Woolworths own poker machines None-the-less the Big Player strategy is still in use today and has been applied by almost all of the most successful Blackjack teams to have operated since.These fonts are not FFG-approved, and are provided as a service to the community.You can find a huge selection of video poker games at Palace of Chance, but the easiest one to start with is Jacks or Better.To.

By business reporter Stephen Letts

Updated July 03, 2019 16:29:51

Woolworths is punting pubs and pokies out of its business, announcing plans to spin off its drinks and hotel interests next year.

Key points:

  • Woolworths is spinning off its $11b alcohol, gaming and hotel business
  • Woolworths is currently the third biggest gaming business in Australia, behind the Crown and Star
  • Gaming has always been contentious for Woolworths, but it says it is getting out of it to let various businesses reach their full potential

In a release to the ASX, the supermarket chain said it would package together its drinks, hospitality and gaming interests in the Endeavour Drinks and ALH Group businesses ahead of either a de-merger, or 'other value accretive alternatives', such as a trade sale, in 2020.

Does Woolworths Own Poker Machines

Woolworths said the separation would deliver benefits from a simplified organisational structure and greater focus on its core food and retail businesses.

Woolworths entered the gaming industry in 2004 with the ALH joint venture, co-owned by the big hotel owner Bruce Mathieson.

The partnership owns 12,000 gaming machine licences, making it the third biggest Australian pokies operator behind the casino businesses, Crown and Star.

The tactics used to keep people gambling


A whistleblower told the ABC that staff at Woolworths pubs were instructed how to to cover up the practice of plying pokie players with free drinks to keep them on the machines.

The soon-to-be spun out group represented about 30 per cent of Woolworths' total profit last year.

'As a separate entity ... [we're] about two and a half times smaller than Crown and about half the size of Star. So it is an important part of the business but it does need to be kept very much in context,' Woolworths chief executive Brad Banducci said.

The merger of Endeavour Drinks and ALH will create Australia's largest standalone integrated alcohol and hospitality business, with sales of around $10 billion and pre-tax earnings of $1 billion.

The new Endeavour group will house more than 1,500 BWS and Dan Murphy's outlets and 327 ALH hotels.

Reputational damage

Machines

Woolworths' involvement in gaming has been a reputational thorn in its side for some time.

Last month Liquor and Gaming New South Wales lodged a complaint about practices dating back to 2017 at the Westower Tavern in West Ballina and the South Tweed Tavern on the NSW north coast.

The allegations centre on the two hotels supplying patrons with free alcohol in order to keep them playing poker machines.

However, Mr Banducci said the demerger was more about letting various businesses reach their full potential than exiting gaming.

He said dealing with the allegations of breached responsibility obligations had slowed down the demerger plans.

'We've worked incredibly hard to address those and we're only doing this on the back of all the hard work that's been done and we need to lead in responsibility in all of our businesses,' he said.

'We've always believed that it's no different to whether we're responsible in our sale of service of alcohol or responsible in how we operate our gaming machines, and certainly in the context of a publicly listed company we work on the assumption that that pressure or questioning would not abate going into the future.'

Globally significant move

The Alliance for Gambling Reform spokesman Stephen Mayne said it appears Australia's biggest retailer has buckled to the public pressure and decided it can no longer risk the reputational damage of running the world's biggest chain of gaming rooms.

'This is a globally significant development for the gambling divestment movement, not unlike Rio Tinto getting out of coal,' Mr Mayne said.

'Australians are the world's biggest gamblers with $24 billion a year in losses and Woolworths is responsible for about $1.5 billion of this through its 12,000 gaming machines in 286 hotels across Australia.'

Aussies world's biggest gambling losers


It is said Australians love a punt, but you'd wonder why given we appear to be the worst at it in the world — and by a fair margin at that.

Mr Mayne, who is also a renowned shareholder activist, said Woolworths's move was also a positive from a corporate governance point of view.

Machines

'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 structure but has management control,' Mr Mayne said.

'Bruce Mathieson will own 14.6 per cent of Endeavour Group and have one board seat, so his days of running it like a private company are over.'

Diversity eroded, social licence improved: analysts

Woolworths Own Poker Machines

The demerger is part of an on-going retreat back to Woolworths' core business that started with the closure of its disastrous foray into 'big box' hardware, Masters.

By the time Woolworths had scuttled Masters in 2016, it had cost shareholders around $2 billion.

The global rating agency Standard and Poor's said while the demerger would reduce the Woolworths' scale and diversity, it would not affect its creditworthiness.

'In our view, the group's Australian and New Zealand food business remains strong, although the separation will reduce the group's scale and diversity,' Standard and Poor's analysts Sam Playfair and Craig Parker wrote in a note to clients.

'In addition, the reduced exposure to hotels and gaming removes significant regulatory risks and improves the group's perceived social licence to operate.'

Investors backed the demerger move, with Woolworths shares jumping 3.3 per cent to $34 in early trade (11am AEDT).

Do Woolworths Own Poker Machines

Topics:company-news, hospitality, retail, gambling, australia

How Many Poker Machines Does Woolworths Own

First posted July 03, 2019 10:46:24