Victoria’s Gaming Industry - House of Cards or Ethical Investment?

Tabcorp’s $400 million dollar one day loss could be just the beginning of a downfall which will have unforgettable implications for Australian investors. Victoria’s gaming industry is built on a house of cards which could collapse at any moment – if investors are told the truth.

It’s not the petrol crisis or smoking bans that have warned investors to pull out of this perceived “solid” industry. It’s the growing number of people having more regard to sustainable corporates and ethical investment.

In countries such as Canada, casinos have been refused insurance due to rising risks of liability suits. Gaming is becoming ‘risky business’. It could just be that investors and players now realise the misrepresentation of

Victoria’s gaming industry’s claims of being safe and that investors will shy away from investing in an industry fraught with problems, growing consumer concerns and risk of liability suits. Even our most seemingly indestructible corporates including Woolworths and Coles Myer have taken a bite of the gaming machine pie, with confidence from a duped mixture of industry deceit, government overprotection, media manipulation and a chameleon appearance from the industry.

Importantly though, Woolworths show they are aware of how gaming could harm investment by separating off gaming from their main grocery and liquor operations.

This massive loss has been trivialised. Especially as it could have been avoided with Tabcorp’s full knowledge of recent events. We are seeing a rising tide of scepticism:

At the International Pokies Impact Conference held in Adelaide earlier this month, Canadian Roger Horbay, President, Game Planit showed how the integrity of gaming machines themselves is being questioned;

Australia’s first class action against the gaming industry which commenced in Federal Court in early 2005;

The outcome of an ICRP hearing against Tabcorp resulting in evidence that harm was experienced by consumers in late night gaming venues;

The orders made by Consumer Affairs Victoria for Tabcorp to comply with fair trading laws and provide receipts to consumers for gaming machine purchases over $50.00;

The Independent Gambling Authority (IGA) recommendations to introduce smartcards in all gaming venues as the result of an inquiry into the gaming machine industry in mid 2005 (which was commissioned by state government);

The first successful state-wide self exclusion from gaming venues in South Australia ordered by the Gambling Minister, the Hon Michael Wright;

The success of community groups in South Carolina resulting in the total withdrawal of gaming in that state; and

Mounting criticism of the Victorian government for deliberately withholding research comparing WA and Victoria on the community impact of gambling. This report was delivered to government in April and was commissioned by the Independent Gambling Research Panel which

government abolished last December.

For a single investor such as Perpetual Trustees to lose $30 million of retirement funds in one day, Tabcorp and the rest of the gaming industry must now take some form of responsibility and tell Australians the truth. Otherwise, an upcoming financial crisis will devastate Australians without

warning. Will the industry take responsibility then? James Hardie asbestos victims don’t think so, our health system treating patients for smoking related diseases don’t think so, and treatment providers for problem gamblers don’t think so.

It’s not a horse race or an ambiguous gaming machine for investors, it’s Russian Roulette.

Contact Information:

Lana O’Shanassy
President
Duty of Care Inc
Ph: (02) 4872 3911

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