Woolworths Pokie Machines

Woolworths index is pokie on a nationally representative woolworths run quarterly. It tracks consumer perceptions about whether organisations show leadership for the greater good. At the aggregate level, perceptions of big companies gambling Woolworths are consistently machines. Woolworths is the biggest operator of pokies in the country, the most damaging type of gambling to Australians. It's been estimated that Woolworths' annual net pokie revenue is at least $1.2 billion. Woolies generates 11.7% of its annual profit from its pokie business. They have more than 12,000 pokies across 330 venues all around Australia: far more than Star City or Crown Casino. Mr Xenophon said Woolworths was Australia's biggest owner of pokie machines, which was at odds with their statements about doing the right thing in the community.

Wesfarmers, operator of Coles and other retail brands, reportedly wants to pursue harm-prevention modifications to its poker machines. It has asked five pokie manufacturers, including Aristocrat Leisure, for help in trying out games with a maximum bet of A$1.

All have refused, apparently citing costs.

Woolworths Pokie Machines Play

Like Woolworths, Coles – which operates the pokies through its hotels – is a major player in this space. It operates more than 3,000 machines in Queensland and South Australia. But, seemingly unlike Woolworths, Coles is concerned about these machines’ potential for harm.

A true money-spinner

Woolworths, through its subsidiary ALH Limited, operates more than 12,000 pokies across Australia. Net revenue from these is around $1.1 billion per year; the business is a 75:25 partnership with the Mathieson family’s businesses.

Coles’ revenue from its machines is much lower – around $185 million.

Pokies are great money-spinners for hotels, clubs and casinos in Australia, and increasingly internationally. But the technology behind them is not particularly novel. Contemporary pokies are quite straightforward computers, albeit housed in a novel case and with a customised display.

What makes them different is their software, which uses well-established psychological principles to make them “attractive” to punters.

But the features that make pokies “attractive” also make them addictive. The Productivity Commission has estimated that 42% of pokie revenue comes from people with a serious pokie addiction – and another 20% comes from those with a developing habit.

Manufacturers have acted in the past

Given pokies’ computerised basis, the manufacturers’ refusal to work with Coles is remarkable.

Like all companies in the business, Aristocrat Leisure prides itself on its innovative capacity. Through its then-European subsidiary Aristocrat Lotteries, Aristocrat developed and provided the Multix game terminal to Norsk Tipping, the Norwegian gambling operator, from 2008 onwards. Aristocrat sold the business in 2014.

The interesting aspect of the Multix terminal is that it was intended to provide a much safer and less harmful slot-machine-like product. These replaced the existing slots, which the Norwegian government nationalised and withdrew from operation in July 2007.

The machine provides a platform for multiple games, imposes a statutory limit on how much people can spend, and operates on an account-only basis. Users can track spending and reduce their daily limits if they want to be careful. Thus, it incorporates a host of consumer safety and harm minimisation/prevention measures.

Closer to home, the Victorian government introduced a reduced maximum bet limit and reduced load-up limits in 2009. Aristocrat, along with other manufacturers, had to find a solution for these new requirements. That wasn’t very difficult.

The game software required some alteration, and cabinet artwork had to be reconfigured in some cases. It cost somewhere in the tens of millions, but there were no publicly aired complaints and it was implemented smoothly. For a business that makes around $2.6 billion a year, that was small change.

The Tasmanian pokie industry has recently undergone a similar transformation, again without too much fuss.

Perhaps the reduction from $10 bets to $5 bets didn’t threaten the industry too much. And reducing the load-up limit from $9,949 to $1,000 in Victoria was a no-brainer.

Why won’t the manufacturers play ball?

There may be many reasons for the manufacturers’ refusal to agree to Coles’ request, but it is clear the vanguard for the Australian pokie industry lies in New South Wales – particularly with lobby group ClubsNSW. Club businesses operate 70% of NSW’s 95,000 pokies. These made their operators $5.8 billion in 2014-15, of which the clubs made around $4 billion.

Pokie games are upgraded regularly, and the machines themselves tend to be turned over every five years or so. Even putting aside maintenance and upgrades, selling around 20,000 machines every year to clubs and pubs in NSW would earn the manufacturers around $500 million. So, losing a share of that business would be something to avoid.

A successful trial of $1 bets could demonstrate that pokie harm could be reduced. If that occurred, the revenue model for NSW club businesses that rely heavily on pokie revenue would be rattled.

When the Productivity Commission recommended $1 maximum bets and pre-commitment as likely good responses to pokie addiction and harm, the gambling industry, led by ClubsNSW, railed against them as unproven and experimental.

That wasn’t true, even then, as the industry well knows – it funded the original research. But why not seize the opportunity to acquire some more useful evidence through a trial?

The harm pokies cause is widespread and tends to affect those already under significant stress. Moving to $1 bets is a good first step toward reducing this harm, and Coles acknowledges it can’t continue in this business unless it finds a way to reduce avoidable harm.

Woolworths Pokie Machines Games

There are many other ways to limit harm, however, as the manufacturers know full well. They’ve been innovating to make their products as “attractive” as possible for the last 100 years or so.

If they wanted to, they could also lead the way in making machines safe, and fun. Perhaps the super profits might be wound back. The operators would be able to claim they really do care about their customers’ wellbeing.

Clearly, that’s a claim Coles is keen to make. The manufacturers? Maybe not so much.

WOOLWORTHS has emerged as a potential big winner after the Victorian Government smashed the pokie machine duopoly between Tabcorp and Tatts.

Shares in Tabcorp and Tattersalls were placed in a trading halt yesterday after the announcement that they will lose their control over the state's 27,500 poker machines in 2012.
Experts say that since Woolworths owns so many pubs and bars in Victoria, it is perfectly placed to benefit and bid for its own licences.
Angus Geddes, of stock market newsletter Fat Profits, said: 'There will be blood on the market tomorrow. This is bad news for the two companies and Woolworths will probably be rubbing its hands together and opening the champagne.'
From 2012, owners of venues will own and run their own poker machines - and keep the revenue.
Craig Shepherd, an analyst at Commsec, said the announcement was a blow for both gaming companies.
'It was a shock decision and the value that the market thought was in the stocks from 2012 onwards has been wiped out. People thought they would retain the licences for poker machines but they haven't. Even though a change was always on the cards, nobody expected it to be this dramatic,' he said.
Tabcorp and Tattersalls had enjoyed a duopoly where the two companies were in charge of sourcing, buying and collecting the revenue from poker machines in Victoria.
From 2012, however, venues of any size will be able to bid for pokie machine licences for up to 10 years.
'Currently in Victoria, revenue from pokie machines is shared between Tattersalls or Tabcorp, the venue, and the government. But the changes move to a more NSW-style system where the venue owns and runs everything,' Mr Shepherd said.
He said Tatts and Tabcorp derived about 30 per cent of their earnings from the gaming machines, but still own significant assets such as their wagering licences.
Tabcorp chairman John Story said the company was disappointed by the decision and would review all available options to gain a refund on its $597 million licence fee.
The Victorian Government said yesterday neither Tatts nor Tabcorp were entitled to compensation as a result of the restructure.
'We are both surprised and deeply disappointed by the Government's statement that it disputes its obligation to refund the licence fee,' Mr Story said.
'Tabcorp's 216,000 shareholders, including 60,000 in Victoria, are relying on the Government to honour its commitment.'
Tabcorp said the gaming business was an important contributor to earnings, adding $118.7 million before interest and tax in the first half of 2008.
The Government said it would maintain total poker machine numbers at 27,500 and enforce a cap on ownership so that no one venue operator could own more than 35 per cent of machines available to hotels.
- news.com.au

Woolworths Pokie Machines

Originally published asWoolies to win on pokies