With more gaming reform announcements expected to be made in the coming weeks, Victorian publicans discuss the concerns they have around a lack of transparency and collaborations from the State Government.
In mid-2023, the Victorian Government, then led by Dan Andrews, announced major gaming reforms would be introduced to combat gambling harm. The major changes would include mandatory pre-commitment limits and carded play, and load up limits capped at $100 down from $1000. A few months later, it enacted the first step of the plan, mandating a break in play for all gaming machines between 4am-10am– excluding casinos.
With only a fortnight left of the state parliament’s sitting for the year, the next major component of the gaming reform around carded play is expected to drop in the next few weeks. When announcing the reforms, the Government said that industry consultation would take place via a working group, but publicans feel that this has been a box-ticking exercise.
“It just feels a little bit like the department will come speak to you but it’s just to make you happy, and so you walk away with a pat on the back. That’s my concern,” said Tom Francis, managing director of Francis Venues.
There are multiple concerns from publicans surrounding mandatory carded play – which is already in effect at Crown Casino – as opposed to cashless gaming or the preferred facial recognition technology (FRT) model, around feasibility, ease of use, economic pressures, and the changing of goal posts.
Francis said the industry has been advocating for an FRT model for some time, as the most effective problem gambling deterrent, and the easiest to implement.
“As hoteliers and club operators, we always felt South Australia and their model around harm minimisation measures was more what we were proposing, even prior to those reforms being announced. Because, you know, you always want to be on the front foot. We’re not here to watch the world burn, definitely not.”
Longevity and practicality
With other industries moving away from cards as a form of payment, Francis suggests that carded play would be a short-term fix that would then have to make way for other digital avenues of transaction, as the industry evolves globally.
“Carded play is being phased out in the rest of the world, where we’re going down a path of cashless, which will organically come to our industry. So that’s the other concern I have for myself. Trying to find a commercial system that will transition from carded to cashless isn’t there. That’s probably our biggest problem in Victoria, because we’re held back by our monitor, which really determines the way carded play would be implemented.”
Intralot Gaming Services holds the monitor license for all gaming machines in Victoria until 2027.
“That’s a big part of the horizon, making sure that the incoming monitor can deal with a cashless society.”
Francis also argued that FRT would make it easier to implement self-exclusion measures across the board, rather than relying on a carded system.
Player usage of cards is also another area of concern. Dylan Clark, managing director of Inverloch Esplanade Hotel in the Gippsland region, said there is no appetite among patrons for cards.
“It’s going to be challenging. The punters don’t want it, especially our older punters. They don’t like technology. Even trying to get them to sign up to the optional pre-commitment services available now, they’re just not interested because it’s an extra step, and it’s too hard.
“But also people are worried about getting tracked by government for everything. Having their spends tracked by government is certainly something that they’re not interested in, and it’s definitely going to have a downward effect on gaming turnover for venues,” Clark stated.
Compounding economic pressure
Francis commissioned a study by Wohlsen Consulting on the impact of mandatory carded play on the industry in Victoria. The study found that nearly a quarter (24 per cent) of all pubs in the state were currently in some form of financial distress off the back of covid, now compounded by other economic pressures, with electricity and gas prices up between 30-40 per cent since 2020, as well as increases in wages and produce.
The modelling showed that mandatory carded play would reduce gaming revenues somewhere between 14 to 27 per cent across the industry, which accounts for a significant chunk of revenue for venues.
“A good outcome would be around 10 per cent, which is similar to the smoking ban. But the 20 per cent mark would probably take out a quarter of the industry of hotels and clubs, just from the standpoint of trying to stay afloat,” said Francis.
Clark say it has big ramifications for the industry.
“It’s making it challenging, because a lot of people have budgeted their businesses and their venues based on what they thought was going to happen with their gaming venues and what revenue they could turn with gaming. So now we’re having to shuffle things around in our business: whether it’s reducing labor, which means less people getting work or not being able to upkeep venues, not being able to contribute to local sports clubs as much as we’d like to – particularly in the regional areas where we’re the biggest contributor to most community groups and sports groups.
“It just makes it hard to continue to run a business.”
Moving goalposts and a lack of confidence
Francis says the announcement of the gaming reforms, announced a year after the new gaming entitlement contracts came into play, changed the goalpost for pubs and clubs, and have shaken confidence in the industry within the state. He points to the last two pubs acquisitions Francis Venues have made as an example: one in Victoria at the end of 2022, and very recently the group’s first foray into the NSW market with the Kings Head Tavern in suburban Sydney.
“I wouldn’t have made my last acquisition in Victoria, to be honest, because I bought that like at the end of 2022 and settled mid 2023 before the reforms were announced.
“Once that was announced, if I went back in a time machine, even though the pub’s doing extremely well trading wise, I wouldn’t have bought it, from a risk point of view.
“I wouldn’t buy a pub here, and I probably wouldn’t be able to sell a pub here. That’s the reality of it at the moment. Who would want to invest when you’re under a cloud of uncertainty? Which is a big problem.”
Clark put the industry sentiment around mandatory carded play even more starkly.
“We’re very scared about what the future of the industry looks like. We’re for some of the measures that they’re bringing in to make sure that people are operating their gaming rooms correctly and safely, and giving people, the safest way to gamble responsibly.
“But this is definitely frightening for the industry.”