Where the future lies

Does anyone see a pattern here?

Local supply of Gambling Addicts are destroyed, financially hosed.

Profits from Gambling Addicts disappear.

Solution?


EXPANSION!   The Universal Solution that knows no boundaries.

Eliminate any pretense of consumer protection. Buy off a few more politicians. 

The ultimate result?    Implosion!   Give it time....keep up the pretense in the meantime.  

Echo says the future lies in VIP dollar

Date August 16, 2012

Colin Kruger

WITH rival casino operators, James Packer's Crown and Asian giant Genting, hovering over its share register, investors were happy to shrug off Echo Entertainment's 80 per cent drop in net profit to $42.2 million yesterday.

Echo chief executive Larry Mullen said the company gained a share of Australia's VIP market during the year but would still consider a joint venture with Crown if it made sense for shareholders.

''I believe the biggest opportunity for us is the VIP segment, and I say that for us both domestically and internationally,'' he said.

Speaking on Crown's proposed joint venture - which would use Echo's licence to add VIP gaming to the luxury hotel Crown is planning for Barangaroo - Mr Mullen said: ''We're open to anything that would relate to shareholder value.''


Echo's chips are down. Photo: Bloomberg

Crown and Genting each have about 10 per cent of Echo and have applied to the gaming regulator to lift their stakes. Echo said it was hard to compare its results, considering it was still part of Tabcorp for most of the previous period, but the biggest difference was one-off costs, such as the $38 million in expenses at its revamped Sydney casino, The Star, and $30 million in write-offs related to VIP gamblers.

A lower win rate on the VIP business led to a slight decrease in gross revenue to $275 million, compared with the 57 per cent normalised growth expected. Soft consumer spending also had an impact, especially in Queensland.

Deutsche Bank analyst Mark Wilson said the result was in line with guidance, but the performance of The Star ''continued to disappoint''.

The shares fell 11¢ to $4.07, but Mr Wilson said corporate activity would support the price. The stock has risen more than 30 per cent since February when Crown said it had doubled its stake to about 10 per cent. It has since applied to the casino regulators to lift its stake to 25 per cent. VIP may be the future for Echo, but the good news out of the results yesterday came from the contribution of less well-heeled clientele who were spending up on Echo's poker machines.

Echo said it lifted its share of poker machine revenue in New South Wales to 8.2 per cent, up from 7.4 per cent. ''Our largest margin contribution would come from that part of the business,'' Mr Mullen said. Revenue and margins at The Star are expected to improve, with most of the $860 million refurbishment completed.


http://www.brisbanetimes.com.au/business/echo-says-the-future-lies-in-vip-dollar-20120815-2490i.html

Safe to punt on some reform

Safe to punt on some reform
Colin Kruger

He may abhor poker machines, but the Tasmanian MP Andrew Wilkie sure knows how to gamble.

Whatever is happening behind closed doors in Canberra, it is hard to imagine that the Prime Minister, Julia Gillard, will be able to just tear up the Wilkie agreement on gambling reform that allowed Labor to form government.

All indications to date suggest that reforms may be postponed, while trials are held to firm up the case for mandatory pre-commitment systems on poker machines, rather than legislation being hastily rushed through Parliament before May 8.


Wilkie set this artificial deadline to ensure reform was enacted while his support for the government was still critical to its survival, but his luck ran out last year when the government effectively increased its majority in the lower house.

Wilkie is now going to have to play a longer-term game, and this could go either way. On the one hand, a delay could draw some political heat out of the issue and let the government have a better run at gambling reform down the track. On the other, it could allow the poker machine industry, or the government, to white-ant the proposal.

Pokie industry interests do not appear to be counting on the latter scenario. Clubs Australia stayed in attack mode this week, criticising an Australia Institute report that suggests the cost of reforms could be between $171 million and $342 million, a fraction of its estimate of $5 billion.

Clubs' high figure may be considered a joke, but there is no doubting the fears of reform held by the recipients of poker machines' annual income of about $12 billion.

Mandatory pre-commitment, which essentially forces gamblers to determine how much they are prepared to lose, has its flaws.

While the pokie industry's estimates of the cost of reform border on the farcical, the smartcard system being proposed undoubtedly would cost a substantial amount of money.

The pre-commitment registration process would almost certainly put off some casual punters without a gambling problem.

No one knows for sure what the financial impact of pre-commitment laws would be, but some analysts appear to back Clubs Australia's forecast that mandatory pre-commitment could cut pokie revenue by as much as 40 per cent.

Pubs and clubs won't be the only ones affected. Deutsche Bank analysts forecast that the potential loss of earnings per share (EPS) in the listed gambling sector could range between 5 per cent and 36 per cent.

The biggest impact would be on Tabcorp's casino spin-off, Echo Entertainment Group, whose EPS could fall by as much as 36 per cent because of its reliance on income from poker machines, Deutsche says. By comparison, the fall in EPS for James Packer's Crown is expected to be as little as 12 per cent. Tabcorp and Tattersalls are almost completely removed from the picture because their monopoly on pokies in Victoria expires this year. However, this is all guesswork and ignores one of the most surprising criticisms that independent gambling experts have of mandatory pre-commitment : the paucity of research showing that pre-commitment actually curbs problem gambling.

In fact, some expert testimony to the joint Senate select committee on gambling reform, chaired by Wilkie, indicated that problem gamblers may gain little from pre-commitment legislation because these hopelessly addicted individuals get to set their own limits.

It appears that the promise of mandatory pre-commitment, if it works, is that it will help those in danger of addiction by setting limits when they are not in the thrall of their addiction.

If the Productivity Commission was correct in estimating that 40 per cent of the pokie industry's earnings are from problem gamblers, mandatory pre-commitment doesn't sound like such a bad deal for the industry after all.

If you want to consider a worse outcome, how about a long-term plan to phase out high-impact pokies for their low-impact counterparts over a time frame that reflects the normal replacement cycle for machines?

By low-impact we are talking maximum bets of $1 and maximum payouts of $500, exactly the kind of machines that would be exempt from mandatory pre-commitment under Wilkie's proposal.

While not foolproof in preventing gambling addiction, there is much empirical evidence to suggest this could be far more effective and far easier to implement.

If successful reform does slash earnings from poker machines, it won't be only the clubs, pubs and casinos that will feel the pain. NSW and Victoria rely on pokie revenues for more than 10 per cent of each states' income.

For Ted Baillieu's recently installed government in Victoria, the potential heartburn from pokie reform is compounded by a poisoned chalice inherited from the Labor government it deposed last year. When poker machine licences run out for Tatts and Tabcorp in August, the two companies are meant to receive a combined compensation bill of about $1 billion.

When the former premier John Brumby decided, in 2008, that, despite all evidence to the contrary, the government did not have to pay compensation for the loss of licences, all he did was ensure there would be a day of reckoning with two listed companies that are obliged to protect their shareholders' interests. Neither company has said much but their carefully worded statements make it clear legal action will be taken if Baillieu doesn't pay his predecessor's bill.



Read more: http://www.smh.com.au/business/safe-to-punt-on-some-reform-20120120-1qa3o.html#ixzz1k66qCFwh

Cost of Gambling Addiction: around $4.7 billion annually

Gillard's gambling problem
Michael Mullins

Tara Moriarty, secretary of the NSW branch of the Liquor and Hospitality Union, has made perhaps the most useful contribution to the current debate on poker machine reform.

She distanced her union from clubs industry claims, insisting the union was 'certainly not buying into' the 'probably over-stated' campaign. But she stressed that 'it doesn't mean that the workers shouldn't have a seat at the table during this process to make sure that their jobs are protected'.

Her comments reflect an appreciation that care for problem gamblers needs to be balanced against care for workers whose jobs are threatened.

The Federal Government, on the other hand, is open to the accusation that it regards the jobs as expendable because its survival depends upon the successful passage through parliament of the mandatory pre-commitment legislation. Moreover the Prime Minister's ostensibly empathetic assertion that 'too many people would know a family torn apart by problem gambling' could be disingenuous.

Many people also know families torn apart by unemployment, and there is an onus on Julia Gillard to demonstrate that she is primarily motivated by an ethic of care for the wellbeing of her citizens, and not her own political survival. If this is the case, it follows that she will look after workers affected by the pre-commitment technology.

Assistance provided for workers to make the transition to alternative employment is not the same as the compensation packages that will be sought by the clubs industry and affected gambling entrepreneurs such as James Packer, whose business models rely on profiting from the misery of problem gamblers and their families. 40 per cent of the clubs' profits come from people addicted to poker machines. These profits should be regarded as ill-gotten, and therefore not deserving compensation.

That figure is quoted by Rev. Tim Costello, who chairs the Australian Churches Gambling Taskforce. He suggests that clubs dependent upon problem gambling revenue are 'operating [on] an unsustainable business model and should seek advice from Western Australia, where there are no poker machines outside the casino, yet communities and clubs thrive'.

There will be ambit claims for compensation if the ethic of care is obscured by the greed of the clubs and gambling entrepreneurs.

There are arguments that pre-commitment technology is a sign of the 'nanny state' at work and therefore a threat to civil liberties. Nanny state rhetoric is a ruse that gives licence to those who are greedy, or psychologically robust, to prey on the weak and vulnerable.

The so-called nanny state is actually a euphemism for a state that cares for its citizens. Certain powerful interests perceive that as a threat.


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Michael Mullins is editor of Eureka Street.


Poker machine reform debate needs cold facts not hot air: churches

ACGT Media Release

Rev Tim Costello, Chair of the Australian Churches Gambling Taskforce Chair said too many people have been caught by the poker machine lobby’s propaganda and it’s disappointing to see the Opposition supporting their campaign.

Rev Costello made the comments today following Clubs Australia’s rally in Sydney last night which was addressed by Leader of the Opposition, Tony Abbott and Member for Werriwa, Laurie Ferguson.

“The fact is that 40 per cent of clubs’ profits come from people addicted to poker machines.

“And because not all clubs profit equally, only those that rely on profits from problem gamblers will feel the pinch”, Rev Costello said.

“It’s these clubs that are operating an unsustainable business model and they should seek advice from Western Australia, where there are no poker machines outside the casino, yet communities and clubs thrive.

“Australians spend twelve billion dollars a year on pokies.

“Only 600,000 Australians play poker machines at least weekly, and of those 95,000 are poker machine addicts.

“This group of people loses on average up to $21,000 a year. Some lose a lot more. Another 95,000 are at risk of becoming problem gamblers. This second group loses on average up to $8,000 a year.

“So poker machines are a problem for around a third of regular players. It’s a very unsafe product for some.

“Church agencies help individuals, families, friends and colleagues deal with the impact of poker machine addiction. Problems include relationship breakdown, mental health problems, unemployment, debt, financial hardship, theft and other crime, social isolation and all too often, suicide.

“The social cost to the country is around $4.7 billion annually.

“Mandatory pre commitment will require all poker machine players to determine ahead of time how much they are prepared to lose in any sitting. This, as part of a range of measures, will help problem gamblers who are ready to help themselves and help protect a significant number of at risk players from becoming problem gamblers.

“It’s mandatory to wear a seatbelt, to wear a helmet on a bike. It’s illegal to serve alcohol to someone who is already drunk and there are limits on where people can smoke, to prevent the impact of passive smoking.

“This is not the nanny state in action. It’s good public policy that has lead to healthier communities. Australia’s churches call on all people of goodwill to support the reforms,” Rev Costello said.

Members of the Australian Churches Gambling Taskforce include the heads of Australian Christian Churches and the heads of their social services agencies nationally, united by a commitment to make poker machine gambling safer.