No Pokies At Essendon

A common argument we hear is that poker machines are legal, so why shouldn’t Essendon profit from them?

Victoria’s gambling regulator, the VGCCC, lays out the response against this in their position on gambling harm. They state: Gambling providers’ obligations extend beyond merely complying with the law because: – they alone choose to provide gambling services which cause harm, and– harm occurs despite education and regulation.

That is to say, the decision to continue operating pokies venues is an active decision to continue contributing to gambling harm. While a pub chain may decide they’re fine with that, it is a decision that has consequences for a football club.

While answering a question on the club’s response to environmental issues at the 2023 AGM, Dave Barham commented:

‘organisations now are being judged – in a couple of years’ time we’ll all be judged on our ESG, how we present our club, what we do about the environment, (social) and governance, so big sponsors will now only deal with clubs and sporting organisations that have that in hand..’

So regardless of the legal status, it is clear that trying to be both a football club and a gambling company is an increasingly impossible balance. The money gained from pokies may just be money lost from potential sponsorships. While a strengthened regulatory body means the club must spend more time focusing on ensuring that their venues are compliant, or risk massive fines.

This leaves less time to focus on the core business of footy – of which every minute lost puts us further away from returning to our status as a leading club, both on and off the field.

Poker machines are designed to be addictive. Through lights, sounds, and symbols modern poker machines manipulate the brain into delivering a dopamine hit to the user, even on spins that deliver a loss. People who experience gambling harm from poker machines do so as a result of the predatory nature of the machines, not through any character flaw of their own. This has been recognised in the shift towards treating addiction as a public health issue and away from the idea that ‘responsible gambling’ is a choice.

A Victorian parliament inquiry heard that at least 40% of money lost on pokies is by people with an addiction. Some studies put this number nearer to 60%. Given that we know the affects of gambling addiction extend well beyond the person playing the machine, and that over $235million has been lost at Essendon’s two venues since 2006, it’s an awful lot of harm that is being caused by Essendon’s decision to remain a gambling provider.

While private owners of pokies venues normally operate under a hotel licence, R.S.Ls, sporting, and social clubs such as Essendon operate their poker machines under a club licence. Regulations prevent a transfer of machines between licence types, meaning Essendon’s pokies could only be sold to another group eligible for a club licence and not to a private pub operator.

Club licencees are entitled to a lower tax rate than hotel licencees if at least 8.33% of the money lost on poker machines in their venue is reported in community benefit statements as being put back into the community. These benefits are vastly overstated. We have analysed the community benefit statements for the Melton Country Club and Windy Hill Venue, going back to the 2010 financial year, to understand how the community benefits from Essendon’s poker machine ownership.

Read more detail on the data here…

Footy clubs need money to run, we’re not oblivious to that. According to Essendon’s 2023 Annual Report the club’s two venues made a combined profit of $2.9m. This amount was down 12.5% on the previous year, despite player losses rising by 45% – a reflection of recent struggles within the hospitality sector.

Since then, the Victorian Government has introduced uniform closing hours and slower spin rates to minimise gambling harm, while also committing to mandatory carded play and loss limits – something which one report claims could reduce gaming revenue by 14 – 27 percent. It’s clear the profitability of pokies is on the decline.

Essendon have acknowledged the need to develop alternative revenue streams, and we have confidence that they have people with the right business and football experience to achieve this. However, they have refused to commit these future income streams to facilitate a transition away from pokies.

North Melbourne, Collingwood, Western Bulldogs, Geelong, Melbourne and Hawthorn have all successfully done it.

It’s time for Essendon to do the same.