Tasmania seeks end to Federal Group Poker Machine Monopoly

For more than 40 years, the Federal Group has held an exclusive monopoly on rights to operate poker machines in Tasmania. By the time their existing contract runs up in 2023, the reign will have lasted exactly half a century. Despite Federal’s recent attempts to strong-arm an extension, the Tasmanian government has made it clear they want to put an end to the group’s pokies monopoly.

According to the latest draft policy, Federal Group would finally have to deal with competition in the casino industry, albeit from only one other eligible licensee. If passed, ABC News reports the legislation would give David Walsh’s MONA access to two licenses to open high-roller casinos in Tasmania.

In addition, Federal Group would no longer have exclusive rights to operating poker machines in Tasmania pubs and clubs once its contract expires seven years from now.

“We’re breaking the monopoly, that’s what we’re doing,” said State Treasurer Peter Gutwein, who supports the idea of assessing the genuine market value of Tasmania’s casino gaming licenses.

“There’s been one casino operator in this state since 1973,” Gutwein continued. “The most recent deal that was struck in 2002/2003 was a deal that was delivered in secret.”

Due to the excessive expanse of time between now and the contractual end to Federal Group’s monopoly, even if the policy is passed into law, there’s always the chance that Federal will re-solidify its exclusivity contract before any other licenses can be granted. The organization has already made one attempt to extend its domination beyond 2023.

Last year, in a proposal to further invest in its existing gambling properties, Federal insisted it receive an extension beyond 2023. The group used its $100 million investment proposal as leverage, saying the affluent development plan was contingent upon the approval of such an extension.

Today’s draft policy revealed the Tasmania government’s aversion to an extension, but Federal’s contract isn’t up for official review until 2018; 5 years before it expires.

Greg Farrell, CEO of Federal Group, responded to the introduction of the new pokies and casino licenses proposal this morning, saying, “We will consider over the next little while what the [Government’s] announcement means for our proposed investments, including those at Wrest Point and Country Club”.

Fewer Licenses, But Same Number of Pokies

Another section of the proposal related to reducing the cap limit on poker machines in Tasmania. Currently, state licenses allow for a maximum of 3,680 pokies to be installed throughout the island’s pubs and clubs. The new policy would reduce that cap by 150, to a max of 3,530.

However, it’s worth noting that there are exactly 3,530 poker machines installed throughout Tasmania already. Therefore, as some officials were quick to point out, Gutwein’s new plan doesn’t actually do anything to reduce the number of machines.

Greens leader Cassy O’Connor was especially peeved, calling it “a dog of a policy”, introduced by a man “who should possibly be thought of as Treasurer Peter Gutless”. O’Connor went on to described the draft legislation as “an absolute sham of a plan that will do nothing to reduce the number of poker machines in pubs and clubs.”

Gutwein disagreed, defending his proposal to maintain the current number of gambling machines already in existence by calling it “a legitimate form and lawful form of gaming in the state.” He argued that, “many people enjoy playing on the pokies. Personally, I don’t, but many people do enjoy that as a recreational activity and they gamble responsibly.”